Reddit told its shareholders, in a letter accompanying its third-quarter results, that its traffic from search engines has declined significantly. The company cites Google’s AI Overviews and AI mode as the primary explanations and plans to test a logged-in-only version of its site in several markets outside the United States.
A decline that is accelerating
According to the shareholder letter, the decline in search traffic accelerated at the end of the quarter and continued into October. The text specifies that this traffic decreased by more than a million visits on average per week during that month. Logged-out users and web traffic were the most affected, with some effects spilling over to logged-in users and the app, as search is a common way to return to Reddit.
The letter also mentions a projection for the fourth quarter: ‘If this pace of decline continues, current trends suggest that total DAUq could decline in the fourth quarter, by a low double-digit percentage, relative to our current base of 130 million DAUq.’ DAUq refers to daily active unique users. The document does not specify the weekly visit volume to which this decline is relative, nor its breakdown by search engine.
Globally, the number of DAUq remained stable at 130.3 million between the second and third quarters. In the United States, it fell from 53.2 million to 50.7 million. The decline concerns logged-out users, who dropped from 30.1 million to 27.3 million, while logged-in U.S. users increased slightly, from 23.1 million to 23.4 million. Outside the United States, the number of DAUq increased by 24% year-over-year. Chief Operating Officer Jen Wong explained that Reddit increased its international marketing spend, partly to offset the loss of search visitors.
The causes put forward by Steve Huffman
Asked about the reasons for this trend, CEO Steve Huffman described a two-part hypothesis. The main one consists of Google’s AI Overviews and AI mode, which Google appears to be heavily promoting in the United States and elsewhere. According to him, these features push other results further down the page to a minimum. The second factor concerns automatically translated content, which Reddit believes is ranked less well, especially outside the United States. Steve Huffman also believes this is not a one-off algorithm change, while acknowledging that Reddit has no visibility on this point. Neither the letter nor the interview specifies the share of the decline attributable to each factor.
The executive states that demand for Reddit has not changed. The word ‘Reddit’ remains among the most searched terms on Google, and ‘Google crawls our site as intensely as ever.’ He also claims that the AI mode ‘does not generate traffic,’ neither for Reddit nor, to his knowledge, for other sites. Asked about data licensing agreements with Google and OpenAI, he said Reddit is in active discussions, with no news to share, and that a lack of agreement remains a possible outcome.
A mandatory login test
The letter indicates that Reddit will begin fully testing a logged-in-only experience in certain markets outside the United States in the fourth quarter. Neither the document nor the interview names these markets. According to the company, logging in would allow for more relevant content and provide more signals for advertising targeting, while protecting access to its data corpus and helping it adapt to emerging regulations. Steve Huffman states that most scraping occurs via logged-out access.
The executive says he wants to find the right limit ‘to deliver value to the user, whether they arrive via a shared link, from search, or to discover Reddit.’ A version of the site would remain accessible before a strict login prompt is displayed, and shared links would continue to work. ‘It’s a test, but we are going to make this transition,’ he said, adding that Reddit will likely trade reach for engagement.
According to the letter, logged-in users and app users represent over 80% of the company’s monetization. Its third-quarter revenue grew 53% year-over-year, to $895 million. Reddit also plans to continue encouraging mobile visitors from search to switch to its app, and only about 13% of eligible mobile users currently see this prompt. Asked about brands seeking to appear in AI model responses, Jen Wong said Reddit is ‘fairly skeptical’ of GEO, generative engine optimization, and reluctant to engage with it. This type of campaign is not part of current advertising partnerships.
