Reddit Shares Fall 29% in a Day: Search Referrals Drop by Over a Million a Week, Sign-In Mandate Planned
Shares of the social platform Reddit plunged 29.22% on October 30, closing at $91.73. In third-quarter results released after the previous day's close, revenue beat expectations, but management warned that search referral traffic is falling, fourth-quarter users could drop by a low double-digit percentage, and the company will test mandatory sign-in for most content.
Reddit's third-quarter revenue was $895 million, up 53% year over year and above the LSEG-compiled analyst average estimate of $878.4 million. The company counted about 130.3 million daily active uniques worldwide, while daily users in the United States, its biggest market by revenue, fell 2% to 50.7 million.
Chief Executive Steve Huffman told investors that search engine referrals to Reddit decreased by more than one million on average each week during October, and warned that total daily active uniques could fall by a low double-digit percentage in the fourth quarter from about 130 million if the decline continues. Huffman pointed to Google features such as AI Overviews, which answer questions directly on the results page instead of sending users to Reddit's discussion threads.
In response, Reddit plans to test a logged-in-only experience in select markets outside the United States in the fourth quarter before deciding on a wider rollout. The company said the move also aims to curb data scraping: Reddit's trove of user discussions is prized training data for super intelligence models. Reddit licenses its data to OpenAI and Alphabet's Google, and has sued Anthropic, Perplexity and three data-scraping companies, accusing them of illegally collecting its data. 'We will continue licensing our corpus intentionally, but those commercial deals come with guardrails that protect our users and our business,' Huffman said.
Reddit forecast fourth-quarter revenue of $1 billion to $1.03 billion, largely in line with estimates, and adjusted EBITDA of $480 million to $510 million, versus estimates of $512.2 million. The company said logged-in users make up over 80% of its monetization, and it is enhancing the platform for them with more relevant advertising, more video content and better personalization.
Source: GSM · USA (original Chinese edition)
Photo: 图：Reddit首席执行官Steve Huffman（右）在Goldman峰会上发言。TechCrunch摄，CC BY 2.0，经Wikimedia Commons。 / Reddit CEO Steve Huffman (right) speaking at a Goldman event. Photo by TechCrunch, CC BY 2.0, via Wikimedia Commons.
