Reddit to shift toward a logged-in experience as search traffic sinks

Reddit has long drawn millions of visitors through Google, with some users even appending “Reddit” to their searches for better answers. But as AI-powered search erodes that traffic, the company told investors on its third-quarter earnings call Thursday that it is shifting toward a primarily logged-in experience.

The move aims to shield Reddit’s data from AI scraping so it can strike licensing deals with model makers instead, and to lift revenue as the company’s largest market, the US, keeps losing daily users. Global daily active users held flat quarter-over-quarter at 130.3 million in the third quarter, while US daily actives fell from 53.2 million in the second quarter to 50.7 million, down 2% year-over-year. Reddit said search-referral traffic dropped by more than 1 million visits a week on average in October, and warned that if the trend continues, daily actives could fall by a low-double-digit percentage next quarter.

Even so, Reddit has gotten much better at monetizing a slower-growing audience. Revenue rose 53% year-over-year to $895 million, above Wall Street’s roughly $875 million estimate, while net income climbed 74% to $283 million. Advertising revenue grew 54% to $847 million, and non-advertising revenue — including the AI data-licensing business — grew 35% to $48 million. Despite the US user decline, average revenue per US daily active user rose 53% to $13.82; globally it rose 36% to $6.87. Logged-in users, who give advertisers more signal about their interests, typically carry a higher value, and the same signals would let Reddit personalize feeds and recommendations, including the new algorithmic “For You” feed announced the day before.

Reddit co-founder and CEO Steve Huffman called the shift significant, writing on the platform that “as someone whose life has been defined by the open internet, it’s a big change for me,” but one he believes is “the right decision for our platform and the right decision for our business.” The company said the change won’t happen overnight — it will first test the logged-in push in select markets outside the US in the fourth quarter, with no timeline yet for a full rollout. Reddit added that a logged-out front page still matters, and that going logged-in won’t force users to give up its anonymous “incognito mode,” which is being rebuilt.

Why it matters

Reddit’s pivot is an early marker of how publishers may respond to the collapse of search-referral traffic in an AI-dominated web: trading open reach for data control and higher-value, logged-in audiences.