Reddit to test logged-in experience outside US after search referrals fall

Reddit will test a primarily logged-in experience in select markets outside the US in the fourth quarter, it said on its 29 October earnings call, after search referrals fell by more than 1 million a week on average in October.

Chief executive Steve Huffman blamed Google's AI Mode and AI Overviews. "The reality is, AI Mode does not drive traffic. Not for us, and not to anybody, as far as I know," he said, according to The Verge. He said AI Overviews push Reddit down the search page.

The company's shareholder letter, filed with the SEC on 29 October, said search referral traffic "was down meaningfully in Q3, with the decline accelerating later in the quarter." The hit landed mostly on logged-out and web visitors.

Reddit has not named the countries in the test, set a date for a wider launch, or disclosed how much revenue logged-out visitors generate. Anonymity and incognito browsing will be preserved. "This is a test, but we are going to make this transition," Huffman said.

He argued demand for Reddit's content has not fallen. Google is "crawling us as hard as ever," he said, and answered "For sure" when an analyst asked whether a login wall makes Reddit harder to scrape.

The quarter behind the pivot

Revenue rose 53% to $895 million, ahead of the $878.4 million estimate. Net income climbed 74% to $283 million, or $1.40 per diluted share. Advertising brought in $847 million. Non-advertising revenue, which includes AI data licensing, grew 35% to $48 million, about 5.4% of revenue.

The audience is where the cracks show. Global daily active uniques averaged 130.3 million, flat with the prior quarter and up 12% from a year earlier. US daily active uniques fell 2% from a year earlier to 50.7 million, down from 53.2 million in the prior quarter, the first US decline since the 2024 IPO. US logged-out daily users fell 4%. International daily active uniques rose 24% to 79.6 million.

Reddit warned that if the trend continues, total daily active uniques could fall by a low-double-digit percentage in the fourth quarter from a 130 million base. It guided to $1.00 billion to $1.03 billion in revenue, with adjusted EBITDA of $480 million to $510 million against a $512.2 million estimate. Logged-in users drive more than 80% of monetization, which is why the company will trade reach for sign-ups. Shares fell more than 15% in after-hours trading.

What the licensing deals are worth

Reddit's 2024 deal with Google is worth about $60 million a year and is up for renewal. The Wall Street Journal reported on 22 July that Reddit may not renew and could block Google's AI from its content. A separate agreement with OpenAI is estimated at around $70 million. In its IPO prospectus, Reddit disclosed data licensing arrangements with an aggregate contract value of $203 million over terms of two to three years, according to TechCrunch.

Wells Fargo estimates licensing could reach about $550 million after the Google and OpenAI renewals, far above the $48 million non-advertising line in the third quarter. The bank has also warned Reddit could lose $500 million in AI licensing revenue if it walks away from Google. Those are analyst projections, not disclosed figures.

Huffman offered no new terms on the call. He said only that Reddit is "in active discussions." Reddit has also sued scrapers: it sued Anthropic in June 2025, then Perplexity, SerpApi, Oxylabs and AWM Proxy in October 2025.

Reddit has discussed dynamic pricing with Google and OpenAI, under which it would earn more as its data becomes more valuable to AI answers. Executives reportedly want usage-based fees rather than the flat annual payment of the 2024 contract. No final decision has been made.

What happens next

The fourth-quarter test will be the first read on whether casual visitors sign up at scale. Reddit has disclosed no conversion data yet. Its fourth-quarter report will show whether the audience shrank as warned, and whether the licensing talks produced terms.