Reddit search traffic slumps, will push visitor sign-ins to curb AI scraping
RDDT•Reddit plans to test requiring sign-ins to view most content as search referrals decline, warning daily active unique visitors could fall by a low double-digit percentage in the fourth quarter from about 130 million. Third-quarter revenue was $895 million, while fourth-quarter adjusted EBITDA guidance of $480 million to $510 million fell below estimates.
1. Sign-ins and traffic
Reddit CEO Steve Huffman outlined a plan to make signing in mandatory for most content as the company grapples with data scraping and declining search referrals. Search engine referrals fell by more than one million on average each week during October. Huffman warned that daily active unique visitors could decline by a low double-digit percentage in the fourth quarter from about 130 million if search traffic falls further; U.S. daily active unique visitors fell 2% to 50.7 million.
2. Revenue and outlook
Reddit reported third-quarter revenue of $895 million, above analysts’ average estimate of $878.4 million. Revenue grew 53% but slowed sequentially. The company 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.
3. Testing logged-in access
Reddit plans to test a logged-in-only experience in select markets outside the U.S. in the fourth quarter before considering wider implementation. Huffman said logged-in users account for more than 80% of monetization and that Reddit would improve ads, video content and personalization. The company licenses its data to OpenAI and Google and has sued Anthropic, Perplexity AI and three data-scraping companies over alleged illegal collection of Reddit data.
