Reddit will move to a mainly logged-in experience, ending two decades of open browsing without an account. Chief executive Steve Huffman outlined the plan on the company’s third quarter earnings call on Thursday, 29 October. The company will test the change in select markets outside the United States in the fourth quarter, before deciding on a wider rollout.
The reason is search traffic. Search engine referrals to the site fell by more than 1 million on average each week during October, Huffman said on the call. He blamed Google’s artificial intelligence search tools, including AI Mode and AI Overviews, which answer many questions directly on the results page. “Google is crawling us as hard as ever, so the demand hasn’t changed from their point of view either. The reality is, the AI mode does not drive traffic, not for us and not to anybody,” Huffman said on a post earnings call, according to Reuters.
Reddit has long drawn visitors through Google. Many people add the word “Reddit” to a search query to find answers from users rather than from search optimized pages. As AI summaries answer those questions without a click, fewer visitors reach the site.
Reddit user numbers fall in the United States
Global daily active users were flat from the second quarter at 130.3 million in the third quarter, up 12 percent from a year earlier. Daily active users in the United States fell from 53.2 million in the second quarter to 50.7 million in the third quarter, down 2 percent from a year earlier. Reuters described that as the first decline in United States daily users since Reddit went public in 2024.
Huffman warned that total daily active users could fall by a low double digit percentage in the fourth quarter if referral traffic keeps falling. Shares fell more than 15 percent after hours on the earnings report, and Reuters put the fall at 18 percent in extended trading.
The money side of the quarter looked stronger than analysts expected. Revenue rose 53 percent from a year earlier to $895 million, ahead of Wall Street expectations of about $875 million to $878 million. Net income rose 74 percent to $283 million. Advertising revenue grew 54 percent to $847 million, while non advertising revenue, which includes the AI data licensing business, grew 35 percent to $48 million.
Reddit says logged-in users are worth more to advertisers
Average revenue per daily active user in the United States rose 53 percent to $13.82. Global average revenue per daily active user rose 36 percent to $6.87. Huffman said logged-in users make up over 80 percent of monetization.
The company also gave a weaker forecast than analysts expected for the fourth quarter. It guided revenue to $1 billion to $1.03 billion, below the $1.05 billion Wall Street expected in one account, and largely in line with estimates in another. It expects adjusted earnings before interest, taxes, depreciation and amortization of $480 million to $510 million, against estimates of $512.2 million, Reuters reported.
Scraping is the other reason Huffman gave. “The vast majority of the scraping and stealing of Reddit happens in our logged-out user base,” Huffman told CNBC, according to a summary of the call. A login requirement would make it harder for crawlers to collect content freely, and it would support the licensing deals the company has struck with model providers. Reddit licenses its data to OpenAI and Google, and it has sued Anthropic, Perplexity AI and three data scraping companies, accusing them of collecting its data unlawfully, Reuters reported.
Reddit still has questions to settle before a wider rollout
Huffman said Reddit is still working out what logged-out visitors will see, and he has shared links to keep working. In a post on the site, he wrote: “I don’t know about you, but as someone whose life has been defined by the open internet, it’s a big change for me. But I’ve come to the conclusion that this is the right decision for our platform and the right decision for our business.”
He also said there are unanswered questions about where the boundary should sit between the logged-in and logged-out experiences. Luke Stillman, a managing director at research firm Madison and Wall, told Reuters that requiring users to log in creates another barrier to engagement, particularly for casual users.
The test outside the United States will give the company data on that trade off. If sign-ins rise without a sharp fall in visits, Reddit will have a case for a wider rollout. If visits fall sharply, it will have to weigh the advertising gain from logged-in users against the loss of reach. The test starts in the fourth quarter, and no date has been given for the United States.