Reddit said search referral traffic fell meaningfully in Q3 as Google's AI Overviews and AI Mode reduced visits, with referrals down more than 1 million per week on average in October. To respond, Reddit will fully test a logged-in-only experience in select non-U.S. markets in the fourth quarter, without naming the countries or disclosing conversion data. U.S. daily active uniques fell 2% to 50.7 million, while international DAUq rose 24% to 79.6 million and total DAUq held at 130.3 million. CEO Steve Huffman warned total DAUq could fall in Q4 by a low double-digit percentage, noting logged-in users drive more than 80% of monetization. Revenue rose 53% to $895 million and net income grew 74% to $283 million, but fourth-quarter adjusted EBITDA guidance of $480 million to $510 million trails the $512.2 million estimate, and shares sank after the report.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
Redditearningsartificial intelligenceadvertising
Open a keyword to see other news on the same topic.
Related tickers and likely impact
GOOGL
• NeutralAlphabet Inc. (Class A)
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Communication Services |
| Industry | Interactive Media & Services |
| Market cap | $4.0T |
| Close on 10/29/2026 | 283.75 |
| Change that session | -12.66% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Reddit Earns More From Fewer U.S. Users: Rapid Earnings Reaction
Reddit grew third-quarter revenue 53% to $895 million, even though its U.S. daily active uniques fell 2% from a year earlier to 50.7 million. Shares dropped about 10% in early after-hours trading. All of the user growth came from outside the U.S., so U.S. revenue rose 50% mainly by earning more per user, with U.S. average revenue per unique at $13.82, up 53%. Logged-out U.S. users fell 4%, while logged-in U.S. users, which the company calls its most engaged, grew only 1%. Net income reached $283 million, up 74%, and fourth-quarter revenue guidance of $1.00 billion to $1.03 billion sits above this quarter's $895 million.
- Reddit Earnings Highlight the Company's Google Problem
Reddit reported weaker-than-expected daily active user growth. The article links this to Google sending less traffic to the company's forums.
- Should You Buy, Sell, or Hold Reddit Stock Before Q3 Earnings Release?
Reddit (RDDT) is scheduled to release its third-quarter 2026 results on Oct. 29, 2026. Management expects revenue of $860 million to $870 million, a midpoint implying about 48% year-over-year growth, while the Zacks Consensus Estimate is $886.35 million (up 51.54%) and EPS of $1.30 (up 62.50%). Drivers cited include strong advertising demand, active advertisers up more than 70%, growth in the AI ad automation platform Reddit Max, and international revenue up 84% in the second quarter. Risks include volatility in search referral traffic amid AI-powered search summaries, along with higher spending on AI, product development and marketing. RDDT shares are down 39.8% year to date, versus a 14% gain for the Zacks Computer & Technology sector, and trade at a forward 12-month Price/Sales of 6.18X, above the Internet - Software industry's 4.12X.
- RDDT Rides on Strong Demand in Ad Business: Can It Beat META and SNAP?
Reddit reported second-quarter 2026 advertising revenue up 64% year over year to $762 million, its eighth straight quarter of more than 60% revenue growth. The platform reaches more than 0.5 billion people weekly, including over 130 million daily users, and new app user retention improved 50% year over year. Advertiser usage of its AI-driven ad suite, Reddit Max, grew more than 60% from the first quarter, with revenues from Max campaigns up more than 150%. For the third quarter of 2026, management expects revenues of $860 million to $870 million, or 47% to 49% growth. The article compares this with Meta Platforms, whose third-quarter 2026 advertising revenue was $63.1 billion, up 26%, and Snap, whose second-quarter advertising revenue rose 9% to $1.28 billion.
- Reddit Sinks 5% as Slower Growth Guidance Looms Over Earnings; Snap Drops 3%, Meta Holds Steady
Reddit shares fell about 5% to $136.52 in morning trading as guidance for slower third-quarter 2026 revenue growth weighed on the stock ahead of its earnings report. Management guided third-quarter revenue to $860 million to $870 million, following second-quarter sales of $804.9 million, up 61.1% year over year. Reddit also said it will stop separately reporting logged-in and logged-out daily active users after weak U.S. logged-in user growth. Snap fell 3% to $6.16, while Meta rose 0.2% to $643.55. The article says advertising is the key test, with segment revenue of $762 million up 64% last quarter, and notes Reddit also licenses its data to AI developers.
- Reddit's Q3 DAU Pressure Offset by Strong Ad Trends, Wedbush Says
Related markets
Latest news
- Intel, Amazon Lead Tech Lower as Crypto Markets Rattled Amid $6.3 Billion Binance Hack: AlphaCheck
U.S. stocks fell on Friday, with Intel (INTC) and Amazon (AMZN) leading declines in the Technology (XLK) and Consumer Discretionary (XLY) sectors after their quarterly results. The drop followed a 12% plunge in Alphabet (GOOG, GOOGL) shares in the previous session. Crypto markets were also rattled after Binance reported a $6.3 billion breach, likely the largest heist in history, with Bitcoin falling to around $77,000 and Ether dropping 4% to about $2,200. Crypto-related stocks, including Circle (CRCL), Coinbase (COIN), Robinhood (HOOD) and Strategy (MSTR), also declined, while Brent crude rose 2% to near $113 a barrel and WTI climbed to $103.
- Sandisk stock slumps despite solid earnings beat. Is memory losing momentum?
Barron's associate editor Al Root joins hosts Julie Hyman and Jake Conley to discuss Sandisk's (SNDK) latest earnings and stock move. The company beat expectations on both revenue and profit, and data center sales beat again, though operating cash flow was a slight miss. The shares still fell, and the panel attributed much of the weakness to broader market moves, including Intel's sharp decline and Microsoft closing lower the previous day. Kioxia's below-estimate profit outlook, and easing growth in memory and flash prices after several quarters of rapid gains, raised doubts about how long the memory cycle will last.
- Elon Musk Thinks Many Neoclouds Will Fail. Here's What AI Investors Should Do.
Tesla and SpaceX CEO Elon Musk warned on October 25 that more than 200 neocloud providers could face widespread failures and consolidation as their access to financing tightens. These companies supply computing power to businesses developing and running AI models, and building that capacity requires heavy upfront spending on chips, data centers and electricity. The article notes that tighter financing could force some neoclouds to delay projects, issue more shares or sell assets, with possible pressure on computing prices. CoreWeave's revenue backlog was about $104 billion at the end of the second quarter of 2026, but the author stresses that a backlog reflects expected business rather than cash collected. The author suggests investors can stay invested in AI while being selective, favoring companies that can finance their own growth and generate attractive returns.
- Tech Sell-Off Grips Wall Street as Investors Worry About AI Spending
The Nasdaq fell 2.5% when trading resumed on Friday, after dropping more than 1.3% on Thursday, as investors worried about excessive AI spending. Amazon shares fell as much as 5.9% after it reported third-quarter capital spending of $77.3 billion, above expectations, while Intel plunged 29.4% in its worst day in two years after warning it would increase spending this year. Amazon and Intel together lost about $300 billion in market value on Friday, and Alphabet suffered a record $500 billion wipe-out on Thursday over fears AI could erode its search advertising business. Goldman Sachs predicts that five AI hyperscalers, namely Microsoft, Alphabet, Amazon, Meta and Oracle, will spend $1.2 trillion on infrastructure next year, but concerns are growing that this spending may not translate into revenue and profit. Rising oil prices added pressure, with Brent crude rising above $117 a barrel, its highest since April.
- Silver Has Lost More Than Half Its Value Since January
Spot silver fell 2.29% to $50.95, its lowest since November 2025 and about 58% below its $121.64 record set in January. The sell-off is driven mainly by expectations of Fed rate hikes: the Fed held rates at 3.75% to 4.00% with two members dissenting in favor of an immediate hike, and CME FedWatch puts the chance of a December hike at roughly 75%. Silver pays no yield, so rising rates raise the cost of holding it, and hot data, including 3.6% annual PCE inflation and 3.4% annualized third-quarter GDP growth, reinforce that outlook. Leveraged speculators and an expected 30% drop in solar-panel demand this year, according to JPMorgan, add further pressure. Silver is 25% below its 200-day moving average, but a turnaround would likely require holding $50 and December hike odds dropping well below 75%.
- Reddit downgraded, Rivian upgraded: Wall Street's top analyst calls
This roundup from The Fly compiles notable Wall Street rating changes. Wedbush upgraded DoorDash (DASH) to Outperform with a $230 price target, citing record Q3 results and its $17B acquisition of Instacart (CART). Jefferies upgraded Rivian (RIVN) to Buy with an unchanged $17 price target, while Oppenheimer downgraded Reddit (RDDT) to Perform and removed its price target. Needham downgraded Instacart to Hold after DoorDash agreed to acquire it for $65 per share, and Seaport, Roth and BofA all downgraded Intel (INTC) to Neutral. Bernstein downgraded Alnylam (ALNY) to Market Perform with a $199 price target, and GLJ Research downgraded First Solar (FSLR) to Hold with a $161 price target.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.