Reddit reported third-quarter results and held an earnings call on October 29, where chief executive Steve Huffman said Google's AI Mode search feature has largely stopped sending users to the site. Reddit's stock dropped 23% during premarket trading on October 30.
Huffman told investors on the call: “AI Mode does not drive traffic. Not for us, and not to anybody as far as I know. That’s just a fundamental shift in how Google works.”
Reddit's daily active users in the US fell 2% to 50.7 million in the third quarter, the company's first such decline since its 2024 initial public offering. The company said it lost more than 1 million weekly search referrals from Google in October, while total worldwide daily active users reached 130.3 million.
Quarterly revenue still rose 53% from a year earlier to $895 million, and Reddit forecast fourth-quarter revenue of $1 billion to $1.03 billion. But the company warned that total daily active users could drop by a low double-digit percentage in the fourth quarter if the decline in search traffic continues.
To reduce its reliance on search referrals, Reddit said it will pilot this quarter a mandatory login requirement for most content in a handful of non-US markets, before rolling it out more broadly. The company also said it would strengthen protections against third-party data scraping and build direct relationships with users.
