WEBVTT - Reddit Co-Founder and CEO Steve Huffman Talks Earnings

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<v Speaker 1>Read it out with its first earnings report as a

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<v Speaker 1>public company, shares markedly higher seven percent. Let's bring in

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<v Speaker 1>Reddit CEO Steve Huffman and Steve the core to gone

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<v Speaker 1>forty eight per cent top line growth. You're doing well,

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<v Speaker 1>the ad environment seems really good. But I actually want

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<v Speaker 1>to start with the next big thing, and that seems

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<v Speaker 1>to be the user economy. That seems to be your focus.

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<v Speaker 1>Tell me about the user economy strategy.

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<v Speaker 2>So, good morning, thanks for having me.

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<v Speaker 3>So, the user economy is the family of products and

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<v Speaker 3>features that we're building to facilitate transactions between users on

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<v Speaker 3>the platform, so user to user, gifting user to use

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<v Speaker 3>their subscription, user community, subscriptions, things like that.

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<v Speaker 2>We think there's a ton of potential here.

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<v Speaker 3>One of our sayings that Reddit is the only thing

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<v Speaker 3>that scales with the users is users. And so look,

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<v Speaker 3>the ads business is great and can scale pretty much

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<v Speaker 3>infinitely from our point of view, but we'd love to

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<v Speaker 3>have another business model to sit alongside it, and that's

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<v Speaker 3>what the user economy.

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<v Speaker 4>Is, Steve alongside. Also, the ad business that you say

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<v Speaker 4>can infinitely scale has been AI and the selling of

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<v Speaker 4>data and licensing to some of those big businesses that

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<v Speaker 4>are creating large language models based upon the data that

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<v Speaker 4>you license, Google being one of them. How infinite is

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<v Speaker 4>that revenue stream? Because once the models are trained, how

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<v Speaker 4>necessary is it to keep on licensing.

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<v Speaker 2>So I think there's a couple of ways to look

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<v Speaker 2>at this.

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<v Speaker 3>First, the potential value here is I think quite large,

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<v Speaker 3>and between us and other folks in the market, we're

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<v Speaker 3>actually still developing that. You know, we're finding increasingly folks

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<v Speaker 3>coming to Reddit, and I think what we're seeing overall

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<v Speaker 3>big picture is in the AI era, where increasingly content

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<v Speaker 3>online is written by machines, there's this increasing premium on content, perspectives,

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<v Speaker 3>conversation that comes from real humans, and that's what Reddit provides.

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<v Speaker 3>So so far we've done one kind of major content

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<v Speaker 3>licensing deal with Google, but we're talking to others as well.

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<v Speaker 3>But your question about is is it a one time

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<v Speaker 3>thing or ongoing? I think what's really important here is

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<v Speaker 3>folks want real time access to up to date information,

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<v Speaker 3>conversation perspectives.

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<v Speaker 2>Right.

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<v Speaker 3>Imagine a search engine that stopped indexing in twenty twenty one,

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<v Speaker 3>it wouldn't be very helpful, and so I think that

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<v Speaker 3>real time feed is really important.

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<v Speaker 1>Steve, you took the interesting step to ask redditors and

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<v Speaker 1>particularly redditors who are investors in the IPO, to submit questions,

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<v Speaker 1>and those some of which you answered on the call

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<v Speaker 1>and some of which you'll follow up in video form.

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<v Speaker 1>We're showing one of them now, which is what is

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<v Speaker 1>the justification for having one billion dollars in working capital? Now?

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<v Speaker 1>I want to take that question and apply it to AI.

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<v Speaker 1>Data licensing is a revenue generation tool for you. But

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<v Speaker 1>on the technology side, might we see some M and

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<v Speaker 1>A that answers that question from your reddit A community,

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<v Speaker 1>but also helps us understand a bit more like what

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<v Speaker 1>are you guys going to do to increase competence to

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<v Speaker 1>increase the technology offering on AI?

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<v Speaker 2>Sure, we'll look.

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<v Speaker 3>Our first priority with the cash is to invest in

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<v Speaker 3>the business, so to continue to develop the core Reddit product,

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<v Speaker 3>the user economy, which we discussed, the developer platform, our

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<v Speaker 3>AI efforts, all of those things. Our second priority would

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<v Speaker 3>be M and A And so you know, we're always

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<v Speaker 3>I think looking in the market for teams and technology

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<v Speaker 3>that can really kind of help advance our initiatives, and

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<v Speaker 3>right as you allude to, I think there's just a

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<v Speaker 3>tremendous opportunity in AI in search, both to make our

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<v Speaker 3>core product better and potentially to expand it as well.

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<v Speaker 4>Let's talk about expansion and particularly internationally, because there's much

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<v Speaker 4>talk about how you're basically translating able to bring what

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<v Speaker 4>is all the reviews, the content, the discussion groups, not

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<v Speaker 4>just to those that are writing and speaking in the

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<v Speaker 4>English language, but in French and European countries. How is

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<v Speaker 4>this likely to be enabled by AI but also add

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<v Speaker 4>to the scale of international growth.

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<v Speaker 3>Well, this is really exciting, Like, not that long ago,

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<v Speaker 3>we didn't have the capability of translating our content at

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<v Speaker 3>human quality, but with today's large language models, we can

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<v Speaker 3>do that, and so we can translate our what is

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<v Speaker 3>today our mostly English corpus into just about any language.

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<v Speaker 3>And so we're doing that in French right now and

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<v Speaker 3>testing that in France, and it's going very well, and

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<v Speaker 3>so almost immediately French speakers can see the entire Reddit

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<v Speaker 3>corpus or consume their entire redit corpus in English. And

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<v Speaker 3>a lot of reddits content is universal, right, it's just

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<v Speaker 3>people talking about life. But even the content that is

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<v Speaker 3>maybe regionally specific to America, I think it's still really

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<v Speaker 3>interesting to read and vice versa, and so I'm really

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<v Speaker 3>excited at this idea that we can fulfill the promise

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<v Speaker 3>of the Internet, which has allow people around the world,

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<v Speaker 3>in different countries and different cultures to communicate in their

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<v Speaker 3>native language.

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<v Speaker 1>For our Bloomberg television and radio audience worldwide, we're speaking

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<v Speaker 1>to the Reddit CEO, Steve Huffman, and Steve things are

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<v Speaker 1>going well right now. It seems one of the technology

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<v Speaker 1>changes at the start of this year and even before that,

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<v Speaker 1>was that Google started applying its work in large language

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<v Speaker 1>models and AI to its search engine. And there is

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<v Speaker 1>a school of thoughts that Reddit was a beneficiary of

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<v Speaker 1>that that just within search, Reddit becomes more commonplace, higher

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<v Speaker 1>up the results that are given. Can you give us

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<v Speaker 1>any sort of granularity on how that's helping you with

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<v Speaker 1>growing the redditor base and keeping the redditor base.

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<v Speaker 2>Well, let's just take a step up for a second.

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<v Speaker 3>Reddit has what people want, right, People have questions.

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<v Speaker 2>They often go to Google with questions. Reddit has the

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<v Speaker 2>best answers on the internet.

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<v Speaker 3>They want advice, they want information, they want a sense

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<v Speaker 3>of community and belonging. These are the things that Reddit

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<v Speaker 3>provides and search engines like Google ten years ago, last year, today,

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<v Speaker 3>tomorrow help people find that content on Reddit. They're looking

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<v Speaker 3>for those answers, they're looking for those communities they're looking

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<v Speaker 3>for And so I think I look at this as

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<v Speaker 3>a natural evolution. Search engines are getting smarter, they're getting better,

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<v Speaker 3>they're getting more effective, which means they're getting more effective

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<v Speaker 3>at helping users find what they're looking for on Reddit,

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<v Speaker 3>which of course benefits our platform, our business, and so

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<v Speaker 3>I think these are all I think welcome evolutions. But

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<v Speaker 3>red It's been a net beneficiary of search for a

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<v Speaker 3>long time and I expect that to continue.

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<v Speaker 4>How much have you been a net beneficiary of going public, Steve?

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<v Speaker 4>How much did the IPO help draw people to the platform.

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<v Speaker 4>How much was it a pr event do you think

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<v Speaker 4>and actually boosted some of the community there.

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<v Speaker 2>Well, look, I'm sure that's an aspect to it.

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<v Speaker 3>You know, it's hard to say, and you know Reddit

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<v Speaker 3>primarily grows through word of mouth anyway.

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<v Speaker 2>You know, we don't really do consumer marketing, and.

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<v Speaker 3>So I think anytime we're in the news that helps

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<v Speaker 3>in the IPO with a lot of news. But look,

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<v Speaker 3>the reason I was most excited about the IPO is

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<v Speaker 3>that we are able to include our users as investors.

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<v Speaker 3>Our users have this deep sense of ownership over Reddit.

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<v Speaker 2>Right.

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<v Speaker 3>They create the communities, they create the culture, they create

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<v Speaker 3>all of the content, and for them to have the

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<v Speaker 3>opportunity to be actual owners.

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<v Speaker 2>That was our dream and that was one.

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<v Speaker 3>Of the main reasons we went public in the first place.

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<v Speaker 3>So that's actually what I'm most excited about.

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<v Speaker 1>Steve is a kind of returning founder CEO of readit.

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<v Speaker 1>What's your one personal goal for this year, something you

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<v Speaker 1>want to achieve.

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<v Speaker 2>Well, we mapped out two of them.

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<v Speaker 3>We got the company public and I had my second kid,

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<v Speaker 3>And so for the rest of this year, I want

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<v Speaker 3>to deliver on some of the product initiatives that I've

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<v Speaker 3>been very excited about, so developer platform, the user economy,

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<v Speaker 3>the machine translation that we've discussed, and these are all

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<v Speaker 3>things I think in the day to day building of

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<v Speaker 3>Reddit that I'm very excited about.

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<v Speaker 4>Steve, congrats, I'm the second kid. Reddit CEO Steve Hoffman,

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<v Speaker 4>joyed to have you with us. Thank you.