Reddit Shares Drop 29% as U.S. Daily Users Fall 5% in Q3

Reddit shares fell 29.22% Friday, Oct. 30, closing at $91.73 after its third-quarter results showed a 5% sequential decline in average U.S. daily active uniques, raising concerns about search traffic and audience growth.

Reddit counted an average of 50.7 million daily U.S. users in Q3, 2% fewer than a year earlier. Search referrals declined during Q3 and fell by more than 1 million per week on average in October.

Reddit CEO Steve Huffman identified Google’s AI Overviews and AI Mode as the leading part of Reddit’s hypothesis for the referral decline. The company cannot see changes to Google’s search rankings.

Q3 revenue rose 53% year over year to $895 million, and diluted earnings per share were $1.40. Reddit forecast fourth-quarter revenue of $1 billion to $1.03 billion. It also warned total daily active uniques could fall by a low double-digit percentage from a 130 million base if search referrals keep declining. That outlook applies to total users, not just U.S. users. Logged-in and app users grew sequentially in the U.S. and other markets; they account for more than 80% of monetization.