Reddit is said to be looking for more acquisitions in adtech and elsewhere

Reddit is planning more M&A, the company told analysts on its fourth-quarter earnings call Thursday. Reddit CFO Andrew Vollero said the social networking site is looking for businesses that can increase Reddit’s traffic — meaning their ads are more relevant when posted to a group of Reddit users — or help grow a company’s user base.

“(We want to) buy skills, technologies, and companies,” he said at the start.

Investors, obviously, wanted to know more – especially what the company had in mind when it came to expanding opportunities.

During the Q&A session, Vollero explained, “I probably wouldn’t overestimate the opportunity for growth. I just see it as a lot of opportunity.” He reiterated that the company is looking for innovations and technologies that will increase its business, saying that it has been successful in doing this in the past.

“It has really been one of the secrets of our success,” he said.

Vollero explained that Reddit’s adtech team in particular was more adept at “stepping in” to find technologies rather than building these things themselves.

“It saves us six months to sell, it saves us twelve months to sell, and you have a guaranteed product,” the CFO said, noting that this is helping Reddit grow its monetization capabilities as an ad-supported business.

However, Vollero cautioned that while adtech acquisitions have worked in the past, the company “doesn’t control anything.” That’s why he said that Reddit can buy companies that can offer when they are added to a large company.

The company in the quarter said it was strong benefitsof $726 million in revenue, $690 million of which came from sales. Daily users worldwide rose 19% year over year to 121.4 million, and earnings per share of $1.24 beat estimates.

Reddit also said it sees an even bigger opportunity to make money from its AI search in the future, which raises the question of whether the company is also looking into this area of ​​M&A.

Reddit, which has been ramping up its AI investments in recent months, including an AI search engine, has already found its way to startups. In recent years, it has taken on adtech players with AI optimization tools, including Don’t forget AI in August 2024.

Designed to improve Reddit’s marketing tools, the findings joined a few others from 2022, including an AI platform. Wordsdesigned to improve Reddit’s machine learning capabilities; Spiketrapwhich focuses on ad tracking; suchwhich developed control tools for machine learning; and MeaningCloudanother startup was purchased to improve Reddit’s machine learning and voice analysis capabilities.