Reddit stock fell after CEO Steve Huffman said Google AI Mode does not drive traffic, with October search referrals down by more than 1 million a week on average. Results tied to October 29, 2026, beat profit and sales estimates but missed on users and fourth-quarter guidance. For marketers who still count on Google to send visitors, a major publisher is now saying that pipeline has stalled.
Key Takeaways
- October search referrals fell over 1 million a week on average.
- CEO Steve Huffman says Google AI Mode does not drive traffic.
- Shares sank after Q4 sales guidance missed estimates.
- Reddit will test login walls outside the U.S. in Q4.
Why Google AI Mode Is Not Sending Traffic
On the earnings call, Huffman said search referral traffic was “down meaningfully in Q3, with the decline accelerating later in the quarter,” according to 24/7 Wall Street. He pointed to AI Overviews and Google AI Mode. The Verge reported two separate lines from him: “The reality is, AI Mode does not drive traffic,” and “Not for us, and not to anybody, as far as I know.”
He said the features have “evolved a lot” and, at a “minimum,” push “everyone down the search page.” Reddit remains a “top search term” in Google, and Google is “crawling us as hard as ever.” The Verge also reported that Google said it is seeing “lower monetization” in AI Mode ads, though it is now bringing AI ads to more countries.
Huffman says Reddit believes machine-translated content is being ranked lower in search results, which he says would primarily affect the company outside the United States, The Verge reported. He did not present that lower ranking as a confirmed fact limited to markets outside the U.S.
What Q3 Beat and What It Missed
CNBC compared the quarter with LSEG estimates.
| Metric | Result | Estimate |
|---|---|---|
| Earnings per share | $1.40 | $1.35 |
| Revenue | $895 million | $878 million |
| Daily active uniques | 130.3 million | 133.7 million |
| U.S. daily active uniques | 50.7 million | 53.5 million |
| Average revenue per user | $6.87 | $6.50 |
| Q4 revenue guidance | $1 billion to $1.03 billion | $1.05 billion |
Sales rose 53% year over year, ending eight straight quarters of growth above 60%. Daily active uniques were flat with the prior quarter. International daily active uniques rose 24% to 79.6 million, while the U.S. drop was the first since the 2024 IPO. Search referrals mostly bring logged-out visitors, 24/7 Wall Street noted.
Fourth-quarter revenue guidance of $1 billion to $1.03 billion missed $1.05 billion. Adjusted EBITDA guidance of $480 million to $510 million missed $512.2 million. Huffman told CNBC the sales outlook was “still a strong guide” and that Reddit is “still growing at an industry leading rate, and that’s despite the headwinds from search referrals.”
He warned on the call, 24/7 Wall Street reported, that if the decline continues, total daily active uniques “could fall in Q4 by a low double-digit percentage” from a 130 million base. Yahoo Finance said the stock plunged nearly 25% on Friday. CNBC said shares dropped over 15% after the numbers were released. The shares closed October 29 at $129.60 and are down 43.62% in 2026.
Login Walls and Direct Traffic
Reddit will test a logged-in-only experience in select markets outside the U.S. in the fourth quarter. “This is a test, but we are going to make this transition,” Huffman said. He gave no specific timing, and Reddit is still deciding what logged-out users can see. Logged-out visitors can still browse the main site.
Yahoo Finance reported the international test would precede a worldwide rollout. To pull users in without Google, Reddit is:
- A For You feed of recommendations tied to interests, introduced the day before earnings.
- An August test that uses AI to turn posts into short videos.
- Continued marketing spend meant to offset lost search referrals, which CNBC said Reddit plans to keep spending on.
Logged-in users drive more than 80% of monetization. Huffman said app users and logged-in direct traffic were both up quarter over quarter, and that the vast majority of revenue comes from those users. Other revenue, which includes data licensing, rose 35% to $48 million. OpenAI and Google are the largest licensing partners.
He told CNBC Reddit is “in negotiations” with Google and “only going to do a deal that makes sense for Reddit.” Asked if a login wall makes Reddit harder to scrape, he answered, “For sure.” No new licensing terms were disclosed.
What the Referral Break Means for Marketers
The following is analysis, not a new Reddit figure. Publishers that grew when Google surfaced forum posts now compete with answers placed above the link, the same pressure covered in how AI Mode is changing Google search. Huffman’s line that AI Mode is not sending traffic “to anybody, as far as I know” reaches any site that still treats Google referrals as guaranteed.
A login wall trades casual reach for ad data, and Reddit has disclosed no conversion data from the test. Google’s own comment about “lower monetization” in AI Mode ads, including how those ads are being tested, is one more reason the new page is not classic search. Separate blue-link referrals from AI surfaces in your reports, and put more weight on channels people open without a search prompt.
