Reddit posts Q3 earnings beat but warns of AI‑driven search traffic decline, shares tumble 29%
Reddit reported third‑quarter revenue of $895 million, beating consensus, and posted strong profitability. CEO Steve Huffman said changes to Google’s AI‑powered search have cut referral traffic and could cause a low‑double‑digit drop in daily unique visitors in Q4. The company forecast Q4 revenue of $1 billion‑$1.03 billion, below analyst expectations, and the stock fell about 29% after the release.
Why it matters
The traffic warning and below‑consensus guidance suggest future revenue pressure, which could weigh on Reddit’s valuation and on other internet firms that rely on search referrals (the company notes the risk in its earnings call).
Key facts
- 1Q3 revenue was $895 million, beating the $878 million analyst consensus. finance.yahoo.com
- 2Adjusted earnings per share were reported as $1.40. finance.yahoo.com
- 3Adjusted earnings per share were reported as $2.07. finance.yahoo.com
- 4Adjusted EBITDA for Q3 was $402 million. finance.yahoo.com
- 5Shares fell about 29% after the earnings release. finance.yahoo.com
- 6CEO Steve Huffman cited Google’s AI‑driven search changes as a factor behind declining referral traffic. finance.yahoo.com
Open questions
- Adjusted EPS figures differ: $1.40 versus $2.07.
Summary written by AlphAI AI Desk from 4 of 4 sources. Not investment advice. Figures are as stated by the linked sources.