Reddit shares tumble about 30% after Q3 earnings warn of Google AI search traffic loss
Reddit reported third‑quarter 2026 revenue of $895 million, up 53% year over year, but said traffic from Google search had fallen sharply after Google introduced AI Mode. CEO Steve Huffman attributed a loss of more than one million weekly visits to the new AI feature and warned that daily active uniques could decline double‑digit percentages in the fourth quarter. The company also lowered its Q4 revenue guidance to $1.00‑$1.03 billion, below the $1.05 billion consensus. The market reacted with the stock falling roughly 29‑30% on the day after the release.
Why it matters
Investors saw the stock drop about 29% as the market priced in the risk of a shrinking audience despite strong revenue growth. The below‑consensus Q4 guidance adds further downside pressure on the share price.
Key facts
- 1Q3 2026 revenue was $895 million, a 53% increase year over year. pasqualepillitteri.it
- 2Adjusted EBITDA for Q3 was $402 million. pasqualepillitteri.it
- 3Daily active uniques (DAUq) were 130.3 million, up 12% year over year but below the 133.7 million analysts expected. pasqualepillitteri.it
- 4U.S. daily active uniques were 50.7 million, down 2% year over year. pasqualepillitteri.it
- 5Reddit expects Q4 revenue of $1.00‑$1.03 billion, versus the $1.05 billion consensus. pasqualepillitteri.it
- 6CEO Steve Huffman said Google AI Mode caused a loss of more than 1 million weekly search referrals in October. tech-insider.org
Summary written by AlphAI AI Desk from 6 of 6 sources. Not investment advice. Figures are as stated by the linked sources.