Reddit (RDDT) shares jumped in Friday's premarket after the company reported first-quarter results that blew past expectations, with revenue growth accelerating and a rosy outlook for the current quarter. The social platform is proving that its massive trove of human conversation is becoming increasingly valuable—not just for advertisers, but for the AI industry hungry for authentic data.

For the quarter ended March 31, Reddit's revenue hit $663 million, up 69% from a year ago. Advertising revenue, the company's bread and butter, rose 74% to $625 million, fueled by stronger demand across the entire ad funnel. Net income came in at $204 million, or $1.01 per diluted share, while adjusted EBITDA margin reached 40% and free cash flow margin hit 47%.

Perhaps most striking: Reddit's gross margin was 91.5%, marking the seventh consecutive quarter above 90%. And capital spending? A mere $1 million. That's the kind of math that makes software investors swoon.

CEO Steve Huffman framed Reddit's success as a direct result of its unique asset: more than two decades of human conversation, now totaling over 25 billion posts and comments. As AI tools increasingly seek authentic human perspectives, Reddit's content has become more valuable. "There is no artificial intelligence without actual intelligence," Huffman said.

COO Jennifer Wong added that about 40% of Reddit conversations carry commercial intent, and active advertisers grew more than 75% year over year. The company's automated ad product, Reddit Max, helped advertisers reduce cost per action by 17% on average while lifting conversion outcomes by 25%.

User growth remains a top priority. Huffman noted that when he returned to the company about 10 years ago, Reddit had 12 million daily active users. "Over the last 10 years, we've 10x that to over 120 million DAU. Now we've got our sights set on 1 billion global DAU and 100 million in the U.S. specifically," he said. The company plans to improve onboarding, feeds, search, mobile speed, and machine translation. Search weekly active users rose 30% year over year.

Looking ahead, Reddit expects second-quarter revenue of $715 million to $725 million, implying growth of 43% to 45% year over year. Adjusted EBITDA is forecast at $285 million to $295 million, with a 40% margin at the midpoint.

Shares were up 12.55% at $165.71 in premarket trading on Friday.