But overall, it was a good quarter, first quarter, and we ended with momentum. We’ll see how the second quarter plays out, but it really is kind of comp driven and sort of a couple of tailwinds that we have in the first quarter, we’ll see if they continue the second.
Operator: Our next question comes from Eric Sheridan from Goldman Sachs. Please go ahead. Your line is open.
Q – Eric Sheridan: Thank you so much. Maybe if I could just a two-parter for Jen, Jen, when you’re out talking to advertisers and thinking about the future of the platform, number one, which platform initiatives and product initiatives are resonating the most in terms of driving either advertiser count or advertising spend as we get deeper into the 2024 budget cycle. And as you go out and have those conversations, what is still the big ask or friction points you and the team are trying to solve forward to bring more advertiser count and budgeting beyond 2024 and your long-term road map? Thank you.
Jen Wong: Thanks for the question. Yes, I’d say– I think our aspiration to be a leader in contextual interstates advertising is very differentiated, and it resonates with all of our advertising partners. And the idea that Reddit can be a full-funnel solution, I think it is very attractive, and we’ve made good progress against that. And we started at the top of the funnel with brand. I think we have really done a lot of work and delivered a lot of performance and efficiency at the mid part of the funnel with the continuing growth in click-through rates and click volume. And now with launches like Dynamic Product Ads and you had the catalog in jest last year and the work we’re doing in [indiscernible] conversions at the bottom end of the funnel, I think the advertisers see how serious we are in delivering value at the bottom end of the funnel.
So this idea of being full funnel and being differentiated in terms of our targeting capabilities, I think, is really resonating. We are focused on laying down signals for the bottom end of the funnel. So you see the work we did with a group of ad manager partnership and Helium. We’ll look at more of those. So cap being conversion is going incredibly important – signals into the models that we’re building at the bottom end of the funnel. And just working with advertisers to start testing spend against these solutions and continue to iterate. So I think there’s real excitement about, wow, you’re doing great in brand and mid-funnel and now the lower end of the funnel is potentially going to open up for us to go truly full funnel. That’s really, really exciting.
So that’s where our advertisers are, I think, particularly excited about to just have an additional objective.
Operator: Our next question comes from Benjamin Black from Deutsche Bank. Please go ahead. Your line is open.
Benjamin Black: Great. Thank you for the question, Steve. I know you’re pretty excited about the development program and how that could be transformative longer-term. But more near-term, what are some of the investments that is necessary to build that out even faster? And could the sort of developer platform has potential positive implications for the ad business of the growth? And then the second one, I’m not sure if this is for Drew, or obviously, a big quarter of logged out user growth. But just given the fact that logged in users monetized at a slightly higher rate. Can you just sort of help us understand what the strategy is to convert more of the logged-out users to log in…
Steve Huffman: Thanks for the questions, Ben. So first, developer platform, yes, I am very excited about it. But I would actually frame the developer platform as a relative near-term opportunity. We’ve got a couple of hundred developers playing with it now, some of their work is in production as we speak, so some of the kind of scoreboards and stock tickers and things like that. But we can see in development, another level of interactivity. Our goal is to get this fully open. So all of the developers off our waitlist and there’s thousands really like tell it this summer. And then started getting the monetization features in there later this year. And so I think there’s a lot of opportunity there, all hands on deck trying to bring this to market.
So I think the developer platform and the new Red gold in the user economy, kind of, dovetail together really nicely later this year. In terms of the dynamic between Logged-out and Logged-in, yes, the bedrock of our business today is Logged-in users. And we see plenty of Logged-out users, particularly from Google. But I don’t think from a product point of view, the best strategy for us is to try to convert a Logged-out user into a Logged-in user in any particular session. They’re usually coming from search, they have a question and we need to give what they’re looking for as an answer, and we want to give them that answer. Now I would look at the total DAU as the – look I think of that as like opportunity down the road. Those are users. Those are human beings that are on the Reddit platform for various reasons.
We just know that in any particular session, not everybody is looking to join a community and have a profound experience. Sometimes I just want an answer to the question, and that’s okay. The other thing I think that’s really important is that we grow our ability to monetize Logged-out users. Most of them are landing on what we call a post detail page or a comment page. So it’s a very specific page. In many cases, it’s talking about a specific product. Now there isn’t admin on that page, but I’d say we’re still in early days there, getting advertiser density so that we can have a well-targeted ad on all of those pages. And so I think there’s lots of potential in monetizing Logged-out users. So in summary, I’d look at it, the Logged-out users today represent potential for future Logged-in users.
They also represent potential and monetization in their own right as well. But from a product point of view, we focus on the Logged-out users having a great experience to what they’re trying to do, and when a user hits us opening the app for the first time or coming to our front page, really focusing on giving them a great experience to maximize their retention.
Operator: Our next question comes from Tom Champion from Piper Sandler. Please go ahead. Your line is open.
Tom Champion: Hi. Good afternoon. Steve, I’m wondering if you could talk a little bit more about the machine translation tools that you’re building and maybe with an eye towards the overseas market. I think the release talks a little bit about French or the French language maybe being somewhat underway? And just curious what you’re seeing with the user trends in — maybe in France or rather French-speaking countries? And then maybe for Drew or Jen, very early days in data licensing and I think we’re all very interested in it. And just curious, the early learnings, either financially or the potential with the product. Any thoughts there would be really helpful. Thank you.
Steve Huffman: Thanks. Great question. So the first one on translation. So one of the things, I think, that’s most exciting for us with large language model, is the ability to do translation at human level quality. This was just quite simply technology that didn’t really exist a year ago. And now we can translate Reddit’s entire corpus into another language. And so French is, the first language we’re doing in the stand. It’s in testing now, and the results are looking very promising. And so if you’re a user in France, in this test group, you can see all of them, including like big blue-chip communities like AskReddit, entirely in French. And so this is leading to — as we would hope, improved retention and time on site and then growth among these users.
And they’re also seeing this content get indexed by French language Google. And so we start to see new users coming to that content as well. And so I think really promising start here. We’re going to do more languages this year. As we get the product polished, the next one would be Spanish, which I think represents a pretty big opportunity. So this is very exciting. I think I keep saying everybody has a home on Reddit today, that’s a true statement if you speak English, but we want to make that a true statement for everyone in the world. I think it’s not a matter of if but when, but we want to make that wanas fast as possible. And so I think this represents our best shot at dramatically accelerating our growth outside the U.S. in the non-English markets.
Second question was about data licensing for start with Jen.
Jen Wong: Thanks, Steve. So on data licensing, Steve mentioned truly a barbell business where one part of the business is well-established markets, things like social listening, maybe the financial markets. In social listening, I think we’ve learned there’s clearly an established market. There’s interest embedded data for insights that lead to business decision-making, marketing decision-making. And it is a new market that I think has potential to grow over time, but it’s a lot of players and a lot of players in sort of smaller deals but established market. I’d say another learning is in the barbell side will take certain verticals like finance, et cetera, which are a little bit outside of our domain potentially working with partners who have accessed the distribution is very interesting to us as we learn those markets.
So that’s something that we’re thinking about. On the other side of the barbell are fewer deals, fewer partners and probably a handful, but larger are the folks who are AI model builders. And on that side, I’d say these are midterm deals is how we think about them because it’s such a nascent and early market that we want to see how things unfold or not forever, but wants to understand value. User privacy is very important to us, and that’s very important in how we craft these partnerships and consider partnerships, making sure that users when they have edits and deletions are respected is very important to us. I’d say partners where we’re not competitive and where we can grow together. It’s not always the case. And so we just want to be sure that the partners are right fit even over the midterm.
So those are the things that I think we’ve learned in the, I’d say, the AI partnerships that were sort of more selective given all of those pieces. Drew Vollero, do you want to add?
Drew Vollero: Yes, let me add two things on the financial side, Tom, both positives. I think as Jen said in the barbell market, it’s been nice to see on the smaller side. There are seven figure deals available there. And so that’s been nice to see the team work hard and get those done. So that’s been a benefit for a company like ours. And then the other piece is just sort of the cost of putting together the data as we’re pulling it. It’s a high gross margin business to begin with. This has really been accretive to our business that the cost of preparing the data is probably a little less than we thought it would be and really flows through quite well in the P&L is one of the keys to success that you see in our first quarter numbers.