Reddit Falls About 30% as AI Search Clouds Its Growth Outlook
What happened: Reddit shares fell approximately 29–30% Friday, taking their weekly decline to roughly 44%, as investors weighed weaker audience growth and guidance against strong reported earnings.
What happened: Reddit shares fell approximately 29–30% Friday, taking their weekly decline to roughly 44%, as investors weighed weaker audience growth and guidance against strong reported earnings. Third-quarter revenue rose 53% to $895 million, and earnings per share of $1.40 exceeded the $1.33 consensus, but daily active users of 130.3 million missed estimates of 133.7–134 million. CEO Steve Huffman linked falling referrals to Google’s AI search features, while fourth-quarter revenue guidance of $1.00–$1.03 billion trailed approximately $1.05 billion expected.
Why it matters: The contrast between 53% revenue growth and a roughly 30% share-price decline suggests investors were focused on future distribution and monetization rather than the completed quarter alone. US daily active users fell 2% to 50.7 million, adding a concrete audience concern to Huffman’s warning. His account identifies AI search as a business risk, although the supplied figures do not isolate how much of the audience or guidance shortfall it caused.