Reddit shares sink on weak sales guidance and plans login requirement test as Google search traffic shrinks
Reddit’s quarterly outlook and declining search referrals accompanied a proposed move to limit logged-out access.
TL;DR
- Reddit said it would test a logged-in experience for some users after search referrals fell by more than one million per week on average in October, Reuters reported.
- CNBC reported that the company’s fourth-quarter sales forecast came in below expectations even though its third-quarter revenue and earnings exceeded estimates.
- Reuters reported that Reddit shares fell sharply after the results and management’s comments.
Reddit said it would test a logged-in experience for some users after search referrals fell by more than one million per week on average in October, Reuters reported. CEO Steve Huffman linked the drop to changes in Google search, including AI-generated answers. [1] [2]
CNBC reported that the company’s fourth-quarter sales forecast came in below expectations even though its third-quarter revenue and earnings exceeded estimates. Reddit also said a continued decline in referrals could weigh on daily active users. [1] [2]
Reuters reported that Reddit shares fell sharply after the results and management’s comments. The company described the login test as a way to protect its content and build more direct use; the exact access rules and rollout markets were not settled in the reports. [1] [2]
The relationship between AI search features, referral traffic and Reddit’s future user growth remains uncertain. The reported share-price reaction reflects investors’ response to the outlook and traffic trend, not a settled measure of the policy’s eventual effect. [1] [2]
Why it matters
The episode links platform economics to AI search: a change in how answers are surfaced may affect referral traffic, audience growth and the value of logged-out access. Reddit’s response could alter how much of its public content remains reachable without an account.
Editor's note
This is factual market reporting; no trading guidance is offered. User-growth effects and implementation details remain uncertain.