How Discord makes money: The $15B platform funded by its fans

In 2024, Discord generated up to $879 million in revenue without selling traditional banner ads or mining user data. It’s a counterintuitive feat in an internet economy dominated by ad-funded giants. 

From its origins as a niche voice chat tool for gamers, Discord has grown into a cultural mainstay, used by roughly 200 million people each month. Its core product remains free, with monetization carefully layered on top. Only recently has the company, now valued at $15 billion, begun dipping its toes into advertising.

And as Discord prepares for a potential initial public offering (IPO) and begins rolling out ads in earnest, its next chapter could impact how a generation of community-first platforms thinks about growth, profit, and sustainability.

How Discord works

Discord is a communication platform that offers real-time text, voice, and video chat through user-created spaces known as servers. Each server can house multiple channels organized by topic or function, enabling communities to gather around shared interests.

Discord delivers low-friction communication for groups that range from gaming clans to study circles, hobby clubs to open-source communities, and even brand fandoms. The app is free to use but offers premium enhancements.

A typical user starts by signing up with just an email address. From there, users can either join servers via invite links or create their own. Inside a server, they navigate through various text, voice, or video channels, each with unique permissions, topics, or roles. Server owners can assign specific privileges to moderators, create custom emojis, or even gate content behind role-based access.

One of Discord’s signature features is its persistent voice channels. These allow users to “drop in” to ongoing conversations, creating a fluid, uninterrupted audio environment that mimics real-life group interaction. This persistent structure sets it apart from traditional conferencing tools or messaging apps.

Under the hood, Discord operates as somewhat of a platform-as-a-service (PaaS). Its open application programming interface (API) and software development kits (SDKs) enable third-party developers to build bots, tools, and premium apps. Many of these apps charge for advanced features, and Discord takes a slice of the revenue.

The platform’s scale is enormous. Discord supports over 19 million active servers every week. Strategic integrations with Xbox, PlayStation, Spotify, YouTube, and Twitch have helped it stay culturally relevant while deepening its utility for creators, gamers, and casual users alike.

Discord’s revenue streams

Discord’s business is built on a user-funded model rather than advertising. The majority of revenue is concentrated in premium subscriptions and community upgrades.

Discord’s meteoric rise in revenue growth can be seen as follows:

• 2019: ~$45 million

• 2020: ~$135 million

• 2021: ~$310 million

• 2022: ~$445 million

• 2023: ~$575 million–$600 million

• 2024 (estimated): $630 million–$879 million

Discord’s financial engine is fueled by a relatively small cohort of users who opt into paid enhancements, such as Nitro and server boosts. This approach yields a low but rising average revenue per user (ARPU), from ~$1.30 in 2021 to ~$2.54 in 2023.

Nitro subscriptions and Server Boosts make up the lion’s share of revenue. While Discord is expanding into developer tools, platform fees, and experimental advertising formats, its financial success so far has hinged on compelling its most engaged users to pay for these perks and community enhancements.

Nitro subscriptions

Nitro is Discord’s flagship premium offering. It accounts for approximately $207 million in revenue in 2023, around 36% of the company’s total (~$575 million). That figure has grown from an estimated $173 million in 2021 although it showed signs of plateauing between 2022 and 2023, suggesting the offering may be approaching saturation among Discord’s core user base.

Nitro comes in two tiers:

• Nitro Basic: $2.99/month or $29.99/year

• Nitro: $9.99/month or $99.99/year

Subscribers gain access to a suite of digital perks:

• Larger file uploads (50MB for Basic, 500MB for Nitro)

• Animated and custom emojis across servers

• High-definition video streaming

• Two included server boosts (with Nitro)

• Custom avatars and profile themes

• A Nitro badge as a status symbol

As a high-margin digital product, Nitro’s primary costs lie in payment processing and infrastructure. The product requires little incremental cost per user and is an efficient revenue driver.

Server Boosting

Server Boosting is Discord’s micro-transaction system designed to enhance entire communities. Launched in 2019, it allows users to contribute monthly payments to upgrade a server’s features.

Each boost moves the server closer to unlocking tiered perks, such as better audio quality in voice channels, expanded emoji slots, customizable server banners, animated icons, and even a personalized invite URL. These upgrades are visible and noticed by everyone in the server, thus reinforcing a sense of collective investment.

Every Nitro subscriber receives two Server Boosts included with his or her subscription. Each additional boost is available for purchase at roughly $3.49 per month (or $4.99 without Nitro). Servers require multiple boosts to reach each reward tier (Levels 1, 2, and 3), meaning that users often coordinate to fund their favorite communities collectively.

As a digital-only feature with recurring billing, Boosting carries minimal infrastructure costs for Discord; it is high-margin, scalable, and aligned with the platform’s architecture. And while Nitro subscriptions grow with user adoption, Boosting grows with community activity. The more engaged and organized a server becomes, the more likely its members are to boost it. This turns vibrant communities into recurring revenue sources for Discord.

Discord Shop and digital goods

In late 2023, Discord introduced the Discord Shop, a marketplace for digital cosmetics that lets users personalize their avatars and profiles. The Shop offers a variety of items, including avatar decorations, animated profile effects, and limited-time seasonal content. These items are purely cosmetic. In fact, they offer no functional benefit beyond self-expression and digital identity.

Nitro subscribers receive exclusive pricing and early access to certain items. This feature appeals especially to power users who invest heavily in their online presence and are eager to stand out in servers.

Discord hasn’t released public revenue figures for the Shop. At this time its impact is likely still early-stage and is estimated to contribute a low single-digit percentage of overall revenue.

The long-term potential here is notable. Discord could expand the Shop with mobile-first cosmetics, more frequent seasonal drops, or even scarcity mechanics that resemble digital collectibles. Though still experimental, the Shop is a clear step in Discord’s strategy to broaden monetization through user-driven customization.

Server Subscriptions

Server Subscriptions are Discord’s answer to native creator monetization. This feature allows server owners to charge members for access to exclusive content, channels, and roles within their communities without using third-party services, like monetization platform Patreon. The system is flexible, with creators setting their own tiered pricing that ranges from as low as $3 per month to $200 or even higher.

Discord takes a 10% platform cut from each subscription, leaving 90% to the creator (before processing fees). This split is intentionally generous and competitive. It reflects Discord’s long-term goal of becoming a hub for community-first creators by offering them meaningful revenue opportunities without forcing them to leave the platform.

The economics of this feature are favorable for Discord. After all, it is a low-cost product with minimal infrastructure demands. Most of the remaining margin is preserved once payment processing fees are deducted. And because it scales with community size and creator adoption, the model has significant long-term potential even if the current revenue contribution is modest.

By giving creators native monetization tools, Discord is positioning itself as more than a chat platform. It is fast becoming an all-in-one community engine that supports content, interaction, and commerce in a single environment.

Premium App Subscriptions

Premium App Subscriptions extend Discord’s monetization to developers by allowing them to charge for access to advanced features within apps, bots, and activities they build on the platform. This subscription program enables developers to earn recurring revenue directly through Discord’s billing system, creating a true app platform within the ecosystem.

Discord takes a platform fee based on earnings:

• 15% on the first $1 million earned annually (Growth Tier)

• 30% for revenue beyond that threshold (Standard Tier)

This structure mirrors models from other digital platforms, like the Apple App Store. But Discord’s fees are more favorable for small- and mid-sized developers.

While still in early stages, Premium App Subscriptions are gaining traction. One prominent example is Midjourney, a text-to-image AI art generator that operates entirely through Discord and charges users for premium access. This case underscores the degree to which Discord is evolving into an ecosystem for app-based commerce.

Estimates suggest this stream could generate low-to-mid single-digit millions annually. Importantly, the margins remain high: Discord controls the entire billing infrastructure and takes a cut from every transaction.

Over time, Premium App Subscriptions could lead to more types of apps on Discord, for example, tools for moderation, games, or productivity. These almost-endless possibilities give developers more incentives to build directly on Discord.

Advertising (Sponsored Quests)

In 2024, Discord introduced Sponsored Quests, its first step into advertising. These are opt-in video ads that reward users with in-game loot or cosmetic perks when they watch and stream gameplay. The feature launched on desktop and consoles, with a mobile rollout expected in mid-2025.

The design is meant to be non-intrusive and community-driven. Users choose whether to participate. And the experience ties into gaming sessions, similar to Twitch Drops or rewarded video ads in mobile games.

Discord monetizes these experiences by partnering with game studios and entertainment brands. While there are no official revenue figures yet, Sponsored Quests are expected to become a meaningful income stream by 2025 or 2026.

This marks a major shift for the company. As Discord’s first true ad product, it is an attempt to monetize user attention without disrupting the user experience that made the platform successful. If adopted widely, it could add a new revenue pillar alongside subscriptions and digital goods.

Discord’s cost centers

Discord carries substantial operating costs despite running a high-margin platform. Most users pay nothing to use the service, yet the company still has to support the infrastructure used by hundreds of millions of people each month. Below are the primary cost drivers behind Discord’s business.

Infrastructure and technology

Supporting real-time communication at scale is one of Discord’s largest fixed expenses. The platform relies heavily on low-latency audio and video streaming, which requires significant compute, bandwidth, and infrastructure investments. Here are some examples of the infrastructure Discord uses to deliver services at scale:

• Discord’s real-time systems are powered by WebRTC, with a backend built using Elixir and Python.

• Infrastructure is hosted primarily on Google Cloud Platform and i3D.net, spanning over 30 global regions.

• The company operates more than 850 voice servers to support group calls, drop-in audio, and live streams.

• HD video streaming, screen sharing, and persistent voice channels are bandwidth-intensive features that increase cloud compute and content delivery network (CDN) costs.

• Cloudflare provides distributed denial-of-service (DDoS) protection and global content delivery, adding another layer of infrastructure spend.

At the current scale, serving around 200 million monthly active users, Discord’s infrastructure costs likely reach tens of millions of dollars annually. These costs are largely fixed but continue to rise incrementally as Discord invests in backend upgrades.

Staffing and overhead

Employee headcount is another significant expense for Discord. As of 2025, the company employs close to 900 people, with a heavy concentration of high-compensation roles in the San Francisco Bay Area. 

Teams span engineering, product, design, support, trust & safety, and operations. Compensation is likely one of Discord’s largest cost categories, especially in the lead-up to a potential IPO. Beyond base pay, total cost includes benefits, recruiting, and tooling required to support a distributed workforce.

Joining a host of large tech company layoffs in recent years, in August 2023, Discord reduced its staff by 4% followed by another 17% in January 2024, this time affecting some 170 employees. These moves reflected Discord’s broader effort to improve margins after a period of rapid headcount growth. The layoffs signaled an effort to streamline operations and move closer to profitability.

Trust & safety operations

Moderation and user protection are critical cost areas for Discord due to the semi-private nature of its platform. With millions of invite-only communities and limited content visibility, the company must invest heavily in safety systems to detect abuse and enforce platform rules. The company’s safety framework includes both proprietary tools and dedicated personnel:

• Discord uses a layered moderation stack that includes AutoMod (its AI-based tool), image hashing databases, machine learning classifiers, and manual human review.

• The company acquired Sentropy, an AI moderation startup, in 2021 to strengthen its internal capabilities.

• A dedicated trust & safety team handles user reports, investigates abuse cases, and enforces bans.

• Discord’s compliance obligations are rising with global regulatory standards such as the EU’s Digital Services Act (DSA) and U.S. child protection law Children’s Online Privacy Protection Act (COPPA).

These trust & safety efforts form a significant cost bleed. But they also reflect Discord’s responsibility to manage large, semi-closed online communities.

Payment processing and platform fees

Payment processing and platform fees scale with Discord’s commercial activity. Every subscription, server boost, or digital item purchase triggers a transaction cost. Discord pays fees to Stripe for purchases made via the web and to Apple and Google for in-app purchases. The platform fees on mobile are especially high — both iOS and Android app stores typically take a 30% commission.

To offset these mobile costs, Discord uses differential pricing, charging slightly more on mobile platforms than on web to protect margins. Even with this adjustment, platform cuts remain a drag on profitability. In Q4 2023 alone, Discord generated nearly $31 million in mobile revenue while millions were lost to app store fees.

These transaction-related costs also include fraud prevention tools, managing chargebacks, and supporting customer billing inquiries. While these expenses are variable and tied to growth, they remain a significant line item as Discord scales its digital economy.

Marketing and user acquisition

Discord has traditionally relied on word-of-mouth adoption within gaming communities. But marketing spend is beginning to rise as the company seeks to expand beyond its core audience.

Brand campaigns like “Imagine a Place” have helped position Discord as a broader social platform, while seasonal promotions, such as free Nitro trials through Xbox Game Pass, drive user conversion. Discord also invests in sponsorships and partnerships with creators and streamers to broaden its reach into digital-native audiences.

Beyond advertising, the company funds community-building initiatives like the Moderator Academy, perks for verified partners, and recurring events like Snowsgiving. These programs support server admins and power users who amplify Discord’s network effects.

R&D and product development

Ongoing product innovation is a core cost center for Discord. The company regularly ships new features across desktop and mobile. Recent initiatives include experimental products like Quests (in 2023), Server Subscriptions (expanded in 2023), Discord Shop (launched in late 2023), and newer 2024–2025 launches like the Discord Social SDK, Video Quests for mobile, and anime-themed digital cosmetics.

A major share of Discord’s R&D spend is directed toward its developer ecosystem. It continues to invest in APIs, SDKs, and the App Directory to support external creators building bots, tools, and monetizable apps for the platform. These infrastructure layers enable long-term extensibility and revenue-sharing models.

Product work also supports premium offerings like Nitro, Boosts, and cosmetic items. Multiple teams focus on testing and launching new paid features, while others are responsible for scaling platform-level upgrades.

This work includes design, UX research, quality assurance, and prototyping. The costs are largely staff-driven and include both technical and cross-functional teams.

Discord competitors

Discord operates in a crowded space that spans messaging apps, community platforms, and real-time voice/video services. While no single competitor replicates Discord’s full feature set and business model, several platforms overlap in specific verticals, from gaming communities to workplace chat to creator monetization. Below is a breakdown of Discord’s most relevant rivals.

Slack

Slack is a workplace-oriented messaging app that was acquired by Salesforce for $27.7 billion in a deal finalized in 2021. Its business model is built around per-seat pricing that typically starts at around $7 per user per month.

Slack’s core strengths include robust integrations with enterprise software, strong compliance and security features, advanced search tools, and corporate trust. A staple in professional settings, it excels at structured, asynchronous communication.

However, Slack lacks persistent voice and video channels, rich community-building tools, and the kind of low-friction onboarding experience that Discord offers for casual or large-scale social groups. As a result, it has limited appeal for hobbyists, gamers, and creator communities.

Discord is often favored by startups, developer groups, and open-source communities due to its free tier structure, flexibility, and built-in support for real-time collaboration. While Slack, in existence for over a decade, boasted approximately 65 million monthly active users as of early 2025, Discord, in operation for around the same period of time, served an estimated 200 million — a reflection of its broader, more community-driven audience.

As Slack continues to move upmarket and focus on enterprise features, its overlap with Discord’s core user base is narrowing.

Telegram

Telegram is an encrypted messaging app with approximately one billion monthly active users as of 2025. It operates on a freemium model, offering a $4.99 per month subscription for Telegram Premium.

Telegram’s strengths lie in its focus on privacy, fast performance, and support for large public channels that can broadcast to millions. However, it lacks key features that define Discord’s platform, including persistent server and channel structures, integrated voice chat, and advanced moderation tools.

Telegram Premium offers enhancements similar to Discord Nitro, such as higher upload limits, custom emojis, and animated stickers. 

Still, Discord maintains an edge in customizability, real-time collaboration tools, and community infrastructure. For groups that require structured communication and seamless audio interaction, Discord remains the preferred choice.

Guilded

Guilded is a gaming-first chat platform acquired by Roblox in 2021. It runs on a freemium model and focuses on features tailored to competitive communities, such as event calendars, integrated forums, and match scheduling tools.

Guilded’s main advantage is its out-of-the-box support for esports teams and structured gaming events. Its tools make organizing tournaments and scrims easier.

However, its user base remains small, and the platform struggles with weaker network effects and slower product updates. Many of the unique features Guilded once offered, like forum channels, have since been replicated or surpassed by Discord.

Following its acquisition, Guilded has shifted focus more heavily toward Roblox-related integrations and communities. That move has narrowed its scope and reduced its relevance as a general-purpose Discord competitor.

Microsoft Teams

Microsoft Teams is an enterprise communications suite that is bundled with Microsoft 365. It reported an estimated 320 million monthly active users as of early 2025. It operates under an enterprise Software as a Service (SaaS) model and is often included at no additional cost for organizations already using Microsoft services.

Teams’ strengths include integration with Microsoft Office products, security and compliance capabilities, and entrenchment in enterprise IT ecosystems. Its corporate adoption is driven by default bundling, not individual user choice.

However, Teams has limited appeal for casual or community-focused use. Its interface is more rigid, and its real-time audio/video tools are geared toward scheduled meetings rather than persistent social presence.

Discord outperforms Teams in areas like latency, ease of use, and community-building infrastructure. While Teams and Discord may overlap slightly in hybrid work contexts, they serve fundamentally different use cases. Teams isn’t competing for creators, gamers, or hobbyist communities, which remain Discord’s core audiences.

Twitch

Twitch is a live streaming platform owned by Amazon that supports real-time interaction between creators and fans. Its business model combines ad revenue, paid subscriptions, and the sale of Bits — a virtual tipping currency — with revenue-sharing arrangements for streamers.

Twitch’s biggest strengths are its massive creator economy and engaged fan base. It excels at live content and immediate viewer interaction but offers minimal tools for asynchronous engagement. Channel-based communities on Twitch lack the structure and persistence that Discord provides.

Many Twitch streamers rely on Discord to host their fan communities outside of broadcasts. Discord offers more robust tools for moderation, organization, and ongoing engagement, making it a preferred companion platform.

While Twitch has tested features aimed at extending community interaction beyond the livestream, Discord remains the dominant space for post-stream connection and discussion. The platforms are more complementary than competitive.

The future of Discord

Discord is at a turning point. After years of relying almost entirely on subscriptions and micro-transactions, the platform is cautiously stepping into advertising and readying itself for a public offering. The challenge ahead is clear: to grow revenue without undermining the user-first values that made it successful.

Sponsored Quests, Discord’s new ad format, highlights how it intends to take on that challenge. These opt-in ads, potentially expanding from desktop and console to mobile during the course of 2025, offer in-game rewards in exchange for viewing branded content. The format’s success will hinge on whether Discord can scale ads without compromising its clean user experience.

At the same time, Discord is building a broader economic engine within the app. New tools like Premium App Subscriptions, Server Subscriptions, and Discord Shop are turning communities into micro-marketplaces. This shift positions Discord as akin to an app platform, where creators and developers drive monetization and Discord takes a cut.

The company is also preparing for an IPO, possibly as soon as 2025. Cost-cutting measures in 2023 brought it close to profitability, and investors will be watching closely for progress on ARPU, ad revenue, and mobile monetization. Going public will add pressure on Discord to deliver financial performance while keeping users happy.

Of course, the path forward isn’t risk free. Regulatory scrutiny is on the rise, particularly around content and payments. And Discord must carefully manage commercialization to avoid alienating its core users. Its future will likely depend on whether it can expand into new verticals — like education, fandoms, and professional communities — without losing what made it distinct in the first place.