In brief

• Reddit plans to require users to log in, ending anonymous browsing, with CEO Steve Huffman confirming the shift in a shareholder letter on third-quarter results.
• Reddit said October search traffic fell by more than 1 million referrals per week on average, and Huffman said Google's AI Mode does not drive traffic to the platform.
• Global daily active users were flat at 130.3 million in the third quarter, while U.S. daily active users fell from 53.2 million to 50.7 million, down 2% year over year.
• Reddit beat third-quarter profit and revenue estimates but its fourth-quarter sales guidance fell short of Wall Street expectations, and the stock dropped.

Reddit moves toward logged-in access

CEO Steve Huffman confirmed the change in a letter to shareholders alongside third-quarter results, describing a shift toward a primarily logged-in experience (Reddit is moving to “a logged-in-only experience,” CEO says – Ars Technica) (Reddit shares sink on weak sales guidance and plans login requirement test as Google search traffic shrinks – CNBC).

Search traffic falls

The move comes as referrals from Google search have dropped sharply. Reddit said search traffic in October fell by more than 1 million referrals per week on average (Reddit’s CEO says Google’s AI Mode ‘does not drive traffic’ – The Verge). Huffman argued that Google's AI Mode does not send traffic to the platform, calling it a fundamental change in how the search engine works. Reddit has long been a go-to destination for people who add the word "reddit" to Google queries to find answers written by real users (As search traffic dries up, Reddit announces it’s shifting to a logged-in experience – TechCrunch) (Reddit will force everyone to log in – The Verge).

Data protection and ad targeting

The company has tied the shift to several goals. Huffman said logged-in users give Reddit more signals for ad targeting and tend to engage more, which helps the business. He also said the requirement protects the platform's large store of user data and helps it respond to emerging regulation worldwide. Reddit has previously filed lawsuits over alleged unauthorized access to its data and limited access to "Old Reddit" in response to scraping. Licensing deals with AI model providers are also part of the strategy, according to reporting on the earnings call.

Usage and results

Reddit's global daily active users held steady quarter over quarter in the third quarter, at 130.3 million. U.S. daily active users fell from 53.2 million in the second quarter to 50.7 million, down 2% from a year earlier. The company topped analyst estimates for third-quarter profit and revenue, yet its guidance for fourth-quarter sales landed under what Wall Street had expected, and the stock dropped following the release.

Timeline still unclear

Reddit has not set a firm date for the requirement. Coverage says the company plans to test the change first. Huffman also said the login requirement should help the company retain new users.