Why Reddit stock fell 26% after Q3 earnings and a search warning

Reddit's stock fell about 26% on Friday, October 30, to $96.01 at 10:49 a.m. Eastern, a day after the company reported third-quarter results that beat on revenue but came with a warning: traffic from search engines is falling, and Reddit says its daily users could shrink in the fourth quarter. The figures below come from Reddit's Q3 2026 shareholder letter, and the price is from Yahoo Finance.

What Reddit reported for Q3

Revenue was $895 million, up 53% from a year earlier. Advertising brought in $847 million, up 54%. Net income was $283 million, and adjusted EBITDA, a profit measure that leaves out some costs, was $402 million.

Daily active uniques, Reddit's count of identifiable daily visitors, averaged 130.3 million, up 12%. The growth was abroad: international users rose 24% while U.S. users fell 2% to 50.7 million.

Why the stock fell

The warning is in the letter's note to shareholders. Reddit says search referral traffic "was down meaningfully" in Q3, with the decline speeding up late in the quarter. The biggest hit was to logged-out and web traffic. In October, Reddit says, search referrals dropped by more than 1 million a week on average. If that rate holds, it says, total daily users could fall by a low-double-digit percentage from the current base of 130 million.

The Q4 outlook was a revenue range of $1,000 million to $1,030 million and adjusted EBITDA of $480 million to $510 million.

Reddit's answer: logged-in only

Reddit says logged-in and app users, its most valuable, grew from the previous quarter in the U.S. and the rest of the world. Its plan is to move toward a logged-in-only experience, and in Q4 it will begin testing that in select markets outside the U.S. We covered the plan in Reddit will move to logged-in-only as AI search cuts its traffic.

The letter also blames the change in how people find things online, saying web search is turning into "an AI-powered destination itself."

What to watch

Reddit's first logged-in-only tests outside the U.S. start this quarter, and the company says the results will shape a global version. Fourth-quarter results will show whether the daily-user decline it described has arrived. This is a report of what happened, not advice on the stock.