Reddit Stock After Q3 2026 Earnings: The Users Google Was Lending

Reddit's shares lost about 25% in early trading on October 30, to around $98 from a $129.60 close, on a warning that Google is sending it far fewer visitors. I think Google took one slice of Reddit's audience, and it's the slice the moat never rested on. In the US, the users who left were logged-out visitors, and the logged-in users who make up the network didn't move.

The quarter itself was fine. Revenue grew 53%, and the December quarter is guided to about 40% growth. The damage was one passage in the shareholder letter. Search traffic in October was down by more than 1 million referrals a week, and "if this rate of decline continues," total daily users "could fall in Q4, by a low-double-digit percentage" from about 130 million worldwide. What matters for the next two quarters is whether the logged-in base holds while that happens.

US logged-out users fell by 2.8 million between June and September. Logged-in users rose by 0.3 million. CEO Steve Huffman said on the call that the biggest hit was "on logged out and web traffic," with some of it flowing through to logged-in users because search is how many of them come back. So far that second effect doesn't show in the US numbers.

Outside the US, logged-out users were still growing in Q3. Reddit's Q4 warning implies October's search decline is hitting them too, which may be why the login test starts abroad.

Two lines from the letter matter more to me than the user count. Logged-in and app users together make up "over 80% of the monetization on Reddit." US logged-in users are the part of that group I can measure each quarter. And only about 13% of eligible mobile web visitors are even shown the prompt to install the app, so Reddit has barely started trying to convert them. I think it left the logged-out crowd mostly alone because Google kept sending more of them. Now it plans to ask them to sign in, starting with a full test of a logged-in-only Reddit in some markets outside the US in Q4.

Reddit's network effect works community by community. A subreddit is useful because enough people who know a subject post there and answer each other, and that pulls in more of them. A person who lands on a thread from Google, reads the top answer and leaves adds nothing to that loop. They see some ads, but they're readers. A login wall trades some of that reach for members, and I think that's the right trade to make.

So I don't think this quarter weakens the network itself. The framework still rates Reddit's network effects as strong, and it now marks that pillar as narrowing. I read the narrowing as the edge of the audience, and the 22.5 million line below is where it would reach the core. In the Q2 letter, Huffman wrote that "we're not building for drive-by traffic." This quarter showed how much of the US user count was drive-by traffic.

The comparison with Meta and Snap shows the gap. Almost nobody reaches Instagram or Snapchat through a Google result. You open the app and you're signed in, so every visit counts toward the network and the ad targeting. Reddit is the only one of the three whose biggest audience segment arrives through somebody else's front door. Google's AI answers can summarise a Reddit thread without sending the click. Huffman put it plainly in the letter: "Web search is evolving from a gateway to the web to becoming an AI-powered destination itself." Reddit is paid for its data under a licensing deal with Google, and that deal is the part of the relationship Reddit can negotiate.

The strongest case against me is in my own chart. US logged-in users jumped from 21.9 million at the end of 2024 to 23.0 million in the first quarter of 2025, and they've barely moved since. That's a flat core through a year and a half when US logged-out visitors were still growing. If search was the top of the funnel that turned readers into members, it had stopped doing that job well before Google cut the traffic. And a funnel sending more than a million fewer referrals a week would be expected to shrink the core next.

Huffman as much as said so. Search is "a common source of reengagement" for logged-in users too. A logged-in user who used to come back through a Google result and now gets the answer in Google's AI box may simply visit less often, and the daily count would show that in a quarter or two. The login wall adds its own risk. Putting a sign-in gate in front of casual readers will lose some of them outright, and some of those readers would have become members later.

There's a revenue risk too. The letter credits ad growth to pricing and impressions, and I suspect a good share of those impressions are logged-out readers, though Reddit doesn't split revenue that way. If total daily users fall by a low-double-digit percentage and almost all of it is logged-out, the logged-out audience shrinks by closer to a fifth. Reddit's Q4 revenue forecast of $1.00 to $1.03 billion presumably includes October's traffic, but not a full quarter at the lower level. And Meta's Forum app, launched in May, is aimed squarely at the communities I'm calling the moat. I don't see it pulling any of them away yet, but a narrower funnel leaves Reddit less room if it does.

I take the first point seriously. If the next two prints show US logged-in users sliding, the market's reading was right and mine was too narrow. What I don't accept is that a fall in logged-out visitors, on its own, tells you the network is weaker.

Reddit reports Q4 2026 in early February 2027. I expect total daily users to fall the way it warned, and I've already written off most of that as logged-out traffic. The number I'll extend on the chart above is US logged-in users. If it holds near 23 million, the network is intact and the market sold reach. If it falls below 22.5 million in Q4 or Q1, the search decline has reached the core and I'm wrong. I'd also like to see the first results of the logged-in-only test outside the US, which Reddit says will shape how it rolls the change out everywhere.