Reddit Shares Fall 29.22% as Company Warns Users Could Decline

Shares of Reddit closed at US$91.73 on October 30, 2026, down $37.87, or 29.22%, from the previous close of $129.60, in the first trading session after the company reported third-quarter results and forecast fourth-quarter revenue of $1,000 million to $1,030 million. In its quarterly materials, Reddit also warned that a decline in search referral traffic could push total daily active users down by a low-double-digit percentage in the fourth quarter.

The stock opened at $100.25 and traded between $89.28 and $101.98 during the session on volume of 33,203,383 shares, according to market data from StockAnalysis. The intraday low of $89.28 also marked the bottom of the stock’s 52-week range of $89.28 to $263.50, and Reddit’s market capitalization stood at $17.65 billion at the close. In after-hours trading at 4:30 p.m. EDT, the shares were at $92.35, up 0.68%. Reddit went public on March 21, 2024.

Reddit released its results for the quarter ended September 30, 2026, on October 29, 2026, and filed them the same day on Form 8-K under Items 2.02 and 9.01, with the earnings press release and shareholder letter attached as Exhibits 99.1 and 99.2, according to the SEC filing record, which shows the report was accepted at 16:08:57 ET on October 29. The company held its earnings conference call at 1:30 p.m. PT / 4:30 p.m. ET that day.

Third-Quarter 2026 Results

Total revenue was $895 million, up 53% year-over-year, according to Reddit’s earnings release. Advertising revenue rose 54% to $847 million, and other revenue rose 35% to $48 million. U.S. revenue grew 50% to $718.9 million, while international revenue grew 67% to $176.1 million. Gross margin was 91.5%, up 50 basis points from the prior year.

Net income was $283 million, a net margin of 31.7% and an improvement of $121 million from the prior year. Diluted earnings per share were $1.40, up 75%, and basic EPS was $1.47, up 69%. Adjusted EBITDA was $402 million, up 70%, at a 44.9% margin. Operating cash flow was $364 million, up 96%, and Free Cash Flow was $363 million; capital expenditures were $1 million, or 0.1% of revenue. Cash, cash equivalents, and marketable securities totaled $3.03 billion as of September 30, 2026. For the nine months ended September 30, 2026, revenue was $2,363.3 million, up 60%, and net income was $740.1 million.

“Our business is growing because the Reddit experience captures the human experience in a way that no other platform can replicate,” co-founder and CEO Steve Huffman said in the release. “Surpassing $3B of revenue over the last 12 months shows Reddit’s strength as a destination and the differentiated value of our platform.”

Global daily active uniques (DAUq) averaged 130.3 million in the quarter, up 12% year-over-year, and weekly active uniques (WAUq) averaged 515.2 million, up 16%. U.S. DAUq fell 2% to 50.7 million, while international DAUq grew 24% to 79.6 million. U.S. WAUq was flat at 188.5 million, and international WAUq rose 28% to 326.7 million. Logged-in DAUq was 53.5 million globally, up 7%, and logged-out DAUq was 76.8 million, up 17%. Global average revenue per unique was $6.87, up 36%, with U.S. ARPU at $13.82, up 53%, and international ARPU at $2.43, up 32%.

Search Traffic Warning and Fourth-Quarter Outlook

In its shareholder letter, Reddit stated that search referral traffic was “down meaningfully in Q3, with the decline accelerating later in the quarter.” The biggest impact was on logged-out and web traffic, with some flow-through to logged-in and app traffic because search referral is a common source of reengagement, the company said. The declines have continued into the early part of the fourth quarter, and during October search traffic dropped by more than 1 million referrals on average per week. If that rate of decline continues, current trends suggest total DAUq could fall in the fourth quarter by a low-double-digit percentage from the current base of 130 million, the letter states. Reddit said it helped offset the declines by driving reach primarily through user marketing and by continuing to improve the product.

For the fourth quarter of 2026, Reddit estimated revenue of $1,000 million to $1,030 million and Adjusted EBITDA of $480 million to $510 million. The company said it has not provided a reconciliation to the forward-looking GAAP equivalent measures because of uncertainty regarding, and the potential variability of, reconciling items.

Huffman wrote in the letter that Reddit will begin fully testing a logged-in-only experience in select markets outside the U.S. in the fourth quarter, with the results to inform an optimized version of logged-in-only Reddit globally. He said the shift provides more signals for ads targeting, leads to higher engagement, protects Reddit’s corpus of data, and helps the company adapt to emerging regulations. Logged-in and app DAUq are Reddit’s most valuable users, together accounting for the vast majority of engagement and over 80% of monetization, and both grew sequentially in the third quarter, the letter states. About 13% of eligible mobile web users currently see the app conversion prompt, and the share of new users who return in the first week after installing the app is up double digits quarter-over-quarter and over 50% year-over-year.

Reddit repurchased approximately 670 thousand Class A shares during the third quarter for $100 million at an average price of $149.81 per share, according to the release. Fully diluted shares outstanding were 206.3 million as of September 30, 2026, down 0.3% from the prior quarter. Reddit was also added to the S&P 500 index during the quarter.