Reddit ramps up acquisitions to bolster ad tech and AI capabilities

Reddit Eyes More Acquisitions to Fuel Growth and Ad Technology

Reddit is signaling a push for further mergers and acquisitions as it looks to capitalize on its expanding user base and bolster its advertising technology, Chief Financial Officer Andrew Vollero told analysts Thursday.

Vollero said the social media platform is actively seeking businesses that can leverage Reddit’s massive scale or help the company accelerate user growth. He noted that past adtech acquisitions have allowed the company to bring products to market six to 12 months faster while significantly improving monetization.

While focusing on those key areas, Vollero added that the company is "not ruling anything out."

The announcement follows a strong financial quarter in which Reddit reported $726 million in total revenue, with $690 million generated from advertising. The platform’s global daily active users grew 19% year-over-year, reaching 121.4 million.

Company executives also highlighted future revenue opportunities in AI-powered search products, sparking speculation about potential acquisitions in the artificial intelligence sector. Reddit has already begun moving in this direction, having acquired the startup Memorable AI in August 2024.

Reddit is increasingly pivoting toward a classic "buy-versus-build" strategy as it seeks to close the competitive gap with digital advertising incumbents Meta and Google. Rather than relying on internal research and development, Reddit’s recent string of adtech and artificial intelligence acquisitions allows the platform to integrate proven technologies at pace, accelerating its evolution into a sophisticated advertising ecosystem.

As a publicly traded entity, Reddit remains under intense pressure to demonstrate sustained revenue growth. Strategic M&A serves as a direct lever for enhanced monetization of its niche user base. By acquiring established adtech stacks, the company is refining its audience targeting, data analytics, and performance optimization—critical components for attracting high-spend advertisers who demand measurable returns on investment.

Furthermore, Reddit’s aggressive focus on AI serves as a strategic signal to Wall Street that its ambitions extend beyond traditional display advertising. By fortifying its search capabilities and machine learning tools, the platform is positioning itself as a central player in the data economy. This strategy creates a foundation for high-margin revenue streams, such as licensing its proprietary datasets for the training of large language models (LLMs). Ultimately, this M&A-driven transformation marks Reddit’s transition from a legacy community forum into a diversified technology firm with a multi-faceted revenue model.

For tech-savvy Vietnamese Americans and the younger generation, Reddit has become a primary hub for news and community discourse. However, the company’s corporate M&A strategy has no real, direct impact on the diaspora’s grassroots economy or its most pressing concerns. These high-level business deals don't change the daily reality for the phở restaurants and nail salons that define Little Saigons across the country, nor do they influence critical community issues like remittance flows or the navigation of F2B, H-1B, and EB-5 visa categories.