Reddit plans login tests as search traffic weakens
Revenue grew 53% in the third quarter, but U.S. daily users fell and the company warned that weaker search referrals could weigh on fourth-quarter traffic.
Reddit plans to test a logged-in-only experience in selected markets outside the United States during the fourth quarter, as falling search referrals put pressure on its audience. The change follows third-quarter results that showed revenue rising 53% to $895 million even as U.S. daily active uniques fell 2% from a year earlier.
The contrast is the main point of the report: Reddit earned more from its platform while a key source of visitors weakened. Global daily active uniques, the company's audience measure known as DAUq, rose 12% to 130.3 million. In the United States, the figure fell to 50.7 million.
A login test, not a completed worldwide change
The planned tests will assess the impact of requiring an account before a wider rollout. They do not mean that all Reddit browsing has already moved behind a login requirement.
Chief Executive Steve Huffman blamed Google's AI search features for weaker referral traffic. Search-engine referrals fell by more than one million on average each week during October, he said. His account of the traffic decline and the login plan was reported by Reuters; Ticker Den has not independently measured those referrals.
Huffman warned that total DAUq could fall by a low double-digit percentage in the fourth quarter if referral traffic keeps declining. That is a conditional warning about a future quarter, not a reported fourth-quarter result.
The advertising business still grew
Third-quarter advertising revenue rose 54% to $847 million, while other revenue increased 35% to $48 million. Net income reached $283 million, and diluted earnings were $1.40 a share. Those are Reddit's reported results for the quarter ended September 30.
Reddit said logged-in daily users and daily users of its app grew from the preceding quarter in both the United States and the rest of the world. That matters to the proposed shift: the company is trying to build around people who return directly and sign in, rather than relying as heavily on visits arriving from search.
The tests leave a trade-off to watch. A login requirement may strengthen Reddit's relationship with its regular users and limit scraping, but it also adds a step for casual readers. The results of the international tests, rather than the announcement alone, will show how users respond.
