Reddit's Revenue Surges 53% in Q3, But Weak Q4 Outlook and Login Mandate Rattle Investors

Reddit posted a 53% year-over-year jump in third-quarter revenue and beat Wall Street's profit and revenue targets, but the company's shares fell more than 15% after it issued fourth-quarter guidance below analyst expectations and disclosed plans to require users to log in to access the platform, according to CNBC.

Strong Quarter, But Guidance Disappoints

Reddit reported third-quarter revenue of $894.96 million, up 53% from the prior-year period, alongside net income of $283.26 million, a 74.1% increase year-over-year, and diluted earnings per share of $1.40, up 75%, according to tradingview.com's summary of the company's 10-Q filing. Those results topped Wall Street estimates compiled by LSEG, which had projected earnings of $1.35 per share on revenue of $878 million, CNBC reported.

Average revenue per user came in at $6.87, above the $6.50 analysts had expected, CNBC said, and up 36% year-over-year according to the company's quarterly filing as summarized by stocktitan.net. Global daily active uniques rose 12% year-over-year to 130.3 million, but that figure trailed Wall Street's forecast of 133.7 million. The shortfall was more pronounced in the U.S., where daily active uniques fell 2% year-over-year to 50.7 million, versus analyst projections of 53.5 million, according to CNBC.

Q4 Guidance Falls Below Consensus

Despite the quarterly beat, Reddit guided fourth-quarter revenue to a range of $1 billion to $1.03 billion, below the $1.05 billion Wall Street had expected, CNBC reported. Using the midpoint of that guidance range, $1.015 billion, against the $1.05 billion consensus figure cited by CNBC, the implied shortfall is roughly $35 million, or about 3.3% below estimates (our calculation: (1,050 minus 1,015) divided by 1,050, multiplied by 100). The stock's post-earnings decline of more than 15%, reported by CNBC, suggests investors weighted the cautious outlook and user-growth miss more heavily than the headline revenue and profit beats.

Mandatory Logins Tied to Search Traffic Decline

Reddit said it plans to require all users to create accounts to access the platform, a significant shift for a site historically accessible without registration, CNBC reported. According to CNBC, the decline in search-referred traffic played a big role in this decision. Reddit's own risk disclosures, cited by stocktitan.net, state that the company's content is increasingly summarized in AI-generated search results, pushing traditional search links further down the page, and that these search-engine changes have caused referral traffic declines that "may continue and worsen." Those disclosures do not break out how much of the decline is attributable to any single search engine or AI product.

Testing of a primarily logged-in experience will begin in the fourth quarter of 2026 in markets outside the United States, according to both CNBC and mlq.ai. Per stocktitan.net's review of the company's filing, Reddit intends to implement some form of logged-in restriction globally, including in the U.S., only after reviewing the results of those international experiments; no specific date for a full rollout has been given. CNBC reported that Reddit is still determining exactly what logged-out users will be able to see and will finalize those details during the upcoming testing phase.

Separately, mlq.ai reported that a conversion prompt aimed at search-referred mobile-web users had already reached about 13% of eligible users, which the outlet said leaves room for Reddit to expand that effort.

Advertising and Data Licensing Provided Offsetting Strength

Advertising revenue grew 54% year-over-year, driven by a roughly 34% increase in ad pricing and a 15% rise in impressions delivered, according to tradingview.com. Reddit's "other revenue" segment, which includes data licensing, grew 35% year-over-year to $48 million, CNBC reported. CNBC also said Reddit's two largest licensing partners are OpenAI and Google, and that the company remains "in negotiations" with Google over its data-licensing agreement, adding that Reddit is "only going to do a deal that makes sense for Reddit" if it chooses to continue the partnership.

Bottom Line

Reddit's third quarter showed genuine strength in monetization, with revenue, profit, and ARPU all beating estimates and advertising revenue climbing on both pricing and volume. But the user-growth miss, particularly the U.S. daily active unique decline, combined with cautious fourth-quarter guidance, points to real pressure on Reddit's traffic funnel. The planned shift toward mandatory logins is a direct response to that pressure, but its international-first testing approach means the ultimate scope, timeline, and user-growth impact of a global rollout, including in the U.S., remain undefined based on what the company has disclosed so far.