The social media company is teaming up with the U.S. Navy in a recruitment campaign targeting Gen Z.
The Navy launched a Reddit-wide role-playing game that calls for players to decipher codes and search for clues to complete command directives, according to Forbes.
The goal of the "Sub Hunter" campaign, which will run through the end of this month, is to help the service attract the next generation of submariners.
The Subreddit Hunt seeks out those with “penchants for puzzles,” in which participants must complete several "directives" to finish the game. The U.S. Navy has advertised on Reddit since 2018.
“To ensure we attract the very best and brightest future sailors, including submariners, the Navy is constantly seeking innovative ways to interact with prospective candidates on… social and digital platforms,” said Rear Admiral James P. Waters, commander of Navy Recruiting Command.
Reddit has quickly become a favorite platform for millions of people every month.
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Reddit CEO is riding a wave of 'momentum'
Many people may know Reddit from the 2021 meme-stock craze when a group of retail investors collaborated on the "wallstreetbets" forum to buy shares of highly shorted companies like GameStop (GME) , hoping to force short-sellers to buy shares to cover their bearish positions.
Keith Gill, alias Roaring Kitty, kicked off the meme-stock craze during the lockdown days of the pandemic, and the story became the subject of the 2023 film “Dumb Money.”
Yubo Kuo, assistant professor at Penn State’s College of Information Sciences, said in a June interview with WallStreetBets, “Investing goes beyond the individual level and becomes a social scene where people form a community to invest together.”
"The younger generations are, in general, facing a much harder financial situation," he said. "Research suggests that when people are financially struggling or stressed in general, they tend to engage in more high-risk trading behavior. That's what we see in WallStreetBets."
Reddit went public in March, and the San Francisco-based company held its first earnings call as a public company in May. Shares are up nearly 47% year-to-date.
The company posted second-quarter results on Aug. 6, reporting a loss of 6 cents per share, compared with the expected loss of 32 cents. Revenue increased 54% to $281.2 million, beating the anticipated $254 million.
"We kept up our momentum with both strong business performance and progress on the product," co-founder and CEO Steven Huffman told analysts during the company's earnings call.
"In Q2, both users and revenue grew over 50% year over year. And for the second consecutive quarter, we had positive cash flow and were profitable on an Adjusted EBITDA basis," he added.
User growth has continued to climb, Huffman said, reaching new heights with over 342 million weekly active users and more than 91,000,000 daily active users.
"More and more people are coming to Reddit to explore their interests, engage in conversations, and find their communities," he said.
International expansion remains a top priority and one of the company's largest opportunities, Huffman said.
"Fifty percent of our current user base is outside the US, and we believe we can scale this meaningfully over time," he noted.
International daily active users exceeded 450 million, growing 44% year over year and 11% from the first quarter, by focus countries like France, India, the UK, and the Philippines, "where we're seeing good results with our growth strategies including through machine translation."
Huffman said that immersive machine translation, a form of artificial intelligence that translates text from one language to another without human involvement, is now widely available in French and, "as a result, France was one of our fastest growing countries surpassing growth in the US."
"We will now begin to expand machine translation to German, Spanish, and Portuguese, aiming to make Reddit accessible to everyone regardless of their native language period,"
Analyst increased Reddit stock price target
The social media company is scheduled to report third-quarter results on Oct. 29.
JPMorgan raised the firm's price target on Reddit to $77 from $59 on Oct. 7 while keeping a neutral rating on the shares, according to The Fly.
The firm updated Reddit estimates ahead of the third quarter results to reflect recent positive trends.
The company's tone has been upbeat through the third quarter and with the share lock-up expiration behind it, likely upside to estimates, and potential for new large language mode data licensing deals, Reddit has become a much more frequent topic of discussion with investors, the firm said in a research note.
However, JPMorgan said that it believes the stock price reflects this recent enthusiasm.
Last month, B. Riley initiated coverage of Reddit with a buy rating and $75 price target.
The company offers "monetization opportunities aplenty" as it offers a differentiated value proposition to users, advertisers, and content licensees through its "unique" platform powering tens of millions of users across more than 100,000 communities while creating a large and growing repository of curated content, the firm said.
Reddit is in a relatively early phase of monetizing the platform through advertising and data licensing and is positioned for healthy top-line growth and margin gains in the coming years, B. Riley said.
