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Reddit Earnings Jump, but Search Traffic Warning Sends Shares Lower
The company warned that fourth-quarter revenue and adjusted EBITDA would miss some expectations as search referrals fell more than 1 million a week.
- On Friday, October 30, Reddit shares fell about 25% after CEO Steve Huffman told CNBC that search referral traffic from Google was "down meaningfully in this quarter" due to AI search shifts.
- Despite the Friday sell-off, Reddit reported strong third-quarter results with revenue growing 53% year-over-year to $895 million, supported by robust advertising demand and high engagement among logged-in users.
- The company expects fourth-quarter revenue between $1 billion and $1.03 billion, falling short of the $1.05 billion analysts anticipated, while search traffic dropped by more than 1 million referrals weekly during October.
- To mitigate search traffic volatility, Reddit is prioritizing its logged-in and application user base, which accounts for over 80% of total monetization and delivers higher engagement than search-referred visitors.
- Daily Active Uniques, which reached 130.3 million in the third quarter, could decline by a "low-double-digit percentage" in the fourth quarter if current search referral trends persist amid AI search growth.
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Reddit earnings jump, but search traffic warning sends shares lower
Reddit earnings exposed a growing split between advertising strength and audience risk on October 29. The social platform (NYSE: RDDT) posted sharply higher revenue and profit, but its shares fell 16% in postmarket trading in a dated Wall Street Journal update published at 5:20 p.m. EDT. Revenue rose 53% to $895 million in the quarter […]
Reddit Shares Plunge 30% After Company Says Its Q3 Search Traffic Was "Down Meaningfully"
A day after Alphabet lost $500 billion in market value due to a slowdown at Google, Reddit stock plunged 30% Friday after the company said its search traffic was “down meaningfully” in the third quarter. Shares in the digital platform, which went public in 2024, were trading at around $90.20 in the latter half of […]
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Coverage Details
Total News Sources10
Leaning Left2Leaning Right1Center4Last UpdatedBias Distribution57% Center
Bias Distribution
- 57% of the sources are Center
57% Center
L 29%
C 57%
14%
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