Reddit will require sign-ins for most of its content, testing a logged-in-only site outside the US in the fourth quarter after Google's AI search features cut its referral traffic.
Steve Huffman, Reddit's chief executive, set out the plan on Thursday. He said the login requirement is meant to deter data scraping, and he blamed Google's AI search summaries for the drop in visitors arriving from search engines.
The change would end two decades in which anyone could read Reddit without an account. It lands at a moment when AI-powered search answers queries itself, cutting off the traffic that publishers and social media firms rely on for the user growth their advertising businesses need.
The goal, Reddit said, is a “logged-in only experience”. It intends to move quickly, testing first in regions outside the US before switching it on worldwide.
Referrals fall by a million a week
Huffman said referrals from search engines fell by more than a million a week on average during October. Google still sends its crawlers to Reddit at the same rate as before, but the traffic doesn't follow.
Google is crawling us as hard as ever, so the demand hasn't changed from their point of view either. The reality is, the AI mode does not drive traffic, not for us and not to anybody
He said referral traffic could continue to decline, putting daily active unique visitors at risk of a low double-digit percentage drop in the fourth quarter from about 130 million.
The US numbers have already turned. Daily active uniques there fell 2% to 50.7 million, the first decline since Reddit listed in 2024.
The arithmetic behind the gamble
The case for the login wall rests on where Reddit's money comes from. Huffman said logged-in users account for over 80% of monetisation, and that more than 80% of revenue arrives from people signed in or using the app.
Reddit says it can afford to lose readers who arrive from a search result and leave again. Huffman said the company wants to become “a direct daily habit” rather than a site people reach through Google.
Google has really shifted in their relationship with the rest of the internet
He also framed the change as a defence of Reddit's data. Huffman said the logged-in-only switch would help “protect access to Reddit's extremely valuable corpus of data.”
Reddit licenses that corpus to OpenAI and Google. It has also taken legal action against Anthropic, Perplexity AI and three data scraping companies, alleging they obtained Reddit's data unlawfully.
We will continue licensing our corpus intentionally, but those commercial deals come with guardrails that protect our users and our business
Huffman said there was nothing to announce about the existing AI training deals. Discussions with OpenAI and Google are active, and leadership will “do what makes sense and is in the best interest for Reddit strategically and economically.”
Two accounts of the sign-in rollout
Test abroad first
One account
- Select markets outside the US in the fourth quarter
- Assess the impact before wider implementation
Move fast, then go global
Another account
- Testing begins soon in regions outside the US
- Then the switch is flipped globally
One more barrier to entry
Luke Stillman, who is a managing director at Madison and Wall, a research firm, said a login requirement creates another hurdle for Reddit's casual users. Not everyone sees the trade as safe.
Requiring users to log in creates another barrier to engagement, particularly for casual users
The quarterly results gave the company something to work with. Revenue for the third quarter came to $895 million, ahead of the $878.4 million average estimate compiled by LSEG.
| Analyst estimate | ||
|---|---|---|
| Third-quarter revenue | $895m | $878.4m |
| Current-quarter revenue guidance | $1.00bn to $1.03bn | largely in line |
| Quarterly adjusted EBITDA guidance | $480m to $510m | $512.2m |
Revenue grew 53% year on year, with weekly active users up 16%. The growth rate slowed from the previous quarter, though it still beat firms including Snap and Pinterest.
Reddit's trailing revenue over the 12 months ending in the third quarter exceeded $3 billion, said chief financial officer Drew Vollero. The company's next “internal north star is $5 billion in revenue.”
The guidance for the current quarter points to $1.00 billion to $1.03 billion in revenue, largely in line with estimates. Expected adjusted EBITDA of $480 million to $510 million sits below the $512.2 million analysts had pencilled in.
Shares fell after Huffman's warning, though the accounts of how far don't agree. One put the drop at 18% in extended trading; another said the stock plunged 23%; a third reported the fall without a figure.
The search engine eating its own ads
The trouble starts upstream, at Google. Alphabet lost just over $500bn, or £374bn, in value on Thursday after it disclosed that its own AI summaries were eating into search advertising revenue. Its market value ended the day at $3.46 trillion, down from $3.97 trillion the day before.
Google concedes the point. Philipp Schindler, its chief business officer, said AI mode was taking money from the ads that appear alongside results for traditional search queries.
Kim Scott, Google's former advertising business leader, told the BBC's Today programme the company would rather sacrifice its own search revenue than cede the ground to someone else, saying it would “rather eat its own lunch than allow someone else to eat their lunch.”
Tracy Woo, a principal analyst at Forrester, said the Search results show the strain of paying for AI while defending older businesses.
highlights the challenge of funding massive AI investments while maintaining the strength of established businesses
The pressure extends across the sector. Pinterest's shares also dropped after its revenue forecast came in weaker, with European cross-border sellers' pressures weighing on its business and growth expectations.
Amazon's shares fell 6% in after-hours trading. Microsoft's slipped by less than 1%; its revenue grew 19% from a year earlier to $92.3 billion for the quarter, its cloud business grew 30% to $63 billion, and it disclosed plans to cut thousands of workers.
What is still open
Reddit hasn't named the markets in the fourth-quarter test, or the date it begins. Nor has it said whether the logged-in-only experience will cover the whole world, or on what timeline.
Also unsettled is whether the daily audience really shrinks by a low double-digit percentage in the fourth quarter, as Huffman warned it could if search referrals keep sliding.
What we know
- Reddit plans a logged-in-only test in select markets outside the US in the fourth quarter.
- Search referrals fell by more than a million a week on average in October.
- Third-quarter revenue of $895 million beat the $878.4 million estimate.
Still unclear
- Which markets are in the fourth-quarter test, and when it starts.
- Whether the logged-in-only experience goes global, and when.
- Whether Reddit's AI training deals with OpenAI and Google will change.
- Why the reported share decline differs between 18% and 23%.
