Reddit Plunges 30% After $1 Billion Q4 Outlook Misses Estimates as Google AI Cuts Traffic
Updated
Updated · CNBC · Oct 30
Reddit Plunges 30% After $1 Billion Q4 Outlook Misses Estimates as Google AI Cuts Traffic
3 articles · Updated · CNBC · Oct 30
Summary
Reddit shares sank 30% Friday, putting the stock on course for its worst day since the company went public in 2024.
A $1 billion to $1.03 billion fourth-quarter sales forecast missed analysts' $1.05 billion estimate, overshadowing Q3 revenue growth of 53% and earnings and revenue beats.
CEO Steve Huffman said Google search-referral traffic fell meaningfully during the quarter as AI Overviews changed how users reach Reddit.
Reddit also plans to test requiring users to log in to view content, a shift Huffman said should lift logged-in activity and support advertising monetization.
Analysts downgraded the stock, warning that weaker search referrals and the login change add uncertainty around user growth and monetization.