Reddit locks its front door: everyone logs in as US users shrink and revenue jumps 53%
Third-quarter revenue of $895 million and a 32% net margin arrived alongside a shrinking US audience and a warning that AI search is draining more than a million referrals a week. The answer, announced with the print: a logged-in-only Reddit that keeps its users identifiable and its corpus sellable.
Vincent Jiang · 3 min read
Twenty years of anonymous reading end tonight
Reddit−21.28% — Reddit, down 21.28 percent today announced with its third-quarter results that it will become a primarily logged-in platform, testing login requirements in select markets outside the US this quarter, with no date for a worldwide switch 13. The plan makes signing in mandatory for most content, which would end two decades of anonymous browsing 2.
"As someone whose life has been defined by the open internet, it's a big change for me," co-founder and CEO Steve Huffman wrote, calling it "the right decision for our platform and the right decision for our business" 1. The October 24 preview framed this print as a choice between reach and monetization. Management has voted.
Record revenue on a leaking funnel
Revenue rose 53% year over year to $895 million, ahead of the roughly $878 million analysts expected; net income was $283 million, a 32% margin; adjusted EBITDA $402 million; free cash flow $363 million against $1 million of capital spending 428. Trailing revenue crossed $3 billion and Reddit joined the S&P 500 during the quarter 4. The fourth-quarter guide, $1.00 billion to $1.03 billion of revenue and $480 million to $510 million of adjusted EBITDA, sits below the $512.2 million profit consensus 42.
Revenue sets a record nearly every quarter, and Q4 guidance crosses $1 billion
- Revenue
- Estimate
Data
| Revenue | |
|---|---|
| Q3 '24 | $348.35M |
| Q4 '24 | $427.71M |
| Q1 '25 | $392.36M |
| Q2 '25 | $499.63M |
| Q3 '25 | $584.91M |
| Q4 '25 | $725.61M |
| Q1 '26 | $663.41M |
| Q2 '26 | $804.91M |
| Q3 '26 | $895M |
| Q4 '26E (estimate) | $1,015M ($1,000–1,030M) |
Net margin has held above 30% for three straight quarters
Data
| Net margin | |
|---|---|
| Q2 '24 | -3.6% |
| Q3 '24 | 8.6% |
| Q4 '24 | 16.6% |
| Q1 '25 | 6.7% |
| Q2 '25 | 17.9% |
| Q3 '25 | 27.8% |
| Q4 '25 | 34.7% |
| Q1 '26 | 30.7% |
| Q2 '26 | 31.4% |
The leak is logged-out America
Global daily uniques grew 12% year over year to 130.3 million but were flat sequentially; US uniques fell to 50.7 million from 53.2 million in Q2, down 2% year over year, with logged-out Americans down 4% and logged-in Americans up 1% 145. Huffman said October search referrals dropped by more than a million a week on average, and that daily uniques could fall by a low-double-digit percentage in Q4 if the trend holds 32.
The leak is logged-out America: daily uniques versus a year ago
Data
| Value | |
|---|---|
| U.S. logged-out | -4% |
| U.S. total | -2% |
| U.S. logged-in | 1% |
| Global | 12% |
| International | 24% |
Walls pay better than windows
The arithmetic favors the wall. Logged-in and app users already carry more than 80% of monetization, sign-in brings "more signals for ads targeting," and the requirement "protects access to Reddit's extremely valuable corpus of data," the asset Reddit licenses to Google and OpenAI$500B — OpenAI, private, latest valuation $500B and defends in court against Anthropic$350B — Anthropic, private, latest valuation $350B and Perplexity$20B — Perplexity, private, latest valuation $20B 327. US revenue per daily unique rose 53% to $13.82, and other revenue, which includes data licensing, grew 35% to $48 million 4.
The market's verdict, and the tell to watch
Shares still fell more than 9% after hours, on a stock already down 44% this year, the second straight quarter that search rather than results set the price 256. The pipe is narrowing on both ends: Alphabet−13.68% — Alphabet, down 13.68 percent today flagged lower monetization of its AI Mode queries slowing Search growth, and its shares dropped 12% on October 29, their worst day since the 2004 listing 10.
Whether a smaller, identified audience out-earns the bigger anonymous one it replaces is exactly what the overseas login tests must measure, and whether the Anthropic licensing meter runs faster than the front door closes decides the multiple. Google built Reddit's audience one referral at a time; from this quarter, Reddit keeps the audience and charges for the corpus.
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