Reddit has historically relied on traffic arriving from Google searches, often with users adding the site name to their queries. A recent decline in search-driven visits, linked to the rise of AI-powered search engines, prompted the company to announce a shift toward a predominantly logged-in experience. In the third quarter, global daily active users held steady at 130.3 million, while U.S. users fell from 53.2 million to 50.7 million, a 2 percent year-over-year drop.
Financial results for the same period showed a strong upside despite the user dip. Total revenue climbed 53 percent year-over-year to $895 million, surpassing Wall Street forecasts of roughly $875 million. Net income rose 74 percent to $283 million. Advertising earnings increased 54 percent to $847 million, while non-advertising revenue,including fees from licensing Reddit data to AI model providers,expanded 35 percent to $48 million.
The company also reported higher earnings per user. In the United States, average revenue per daily active user jumped 53 percent to $13.82, while the global figure rose 36 percent to $6.87. Reddit expects that a logged-in environment will further lift these metrics, as authenticated users provide richer interest signals that enable more precise ad targeting and higher advertiser willingness to pay.
Protecting its content from large-scale AI scraping is a core motive for the transition. By limiting access to logged-in members, Reddit can negotiate licensing arrangements that monetize its vast discussion data. The move also aligns with the platform’s goal of delivering more personalized experiences, leveraging the deeper behavioral insights that logged-in activity supplies.
The rollout will be incremental. Reddit plans to pilot the logged-in model in a handful of markets outside the United States during the fourth quarter, without committing to a firm global timetable. The company emphasized that a public front page for anonymous visitors will remain, and that an “incognito mode”,currently being rebuilt,will continue to let users browse without revealing their identity.
Reddit co-founder and CEO Steve Huffman explained the rationale in a post on the platform, stating, “I don’t know about you, but as someone whose life has been defined by the open internet, it’s a big change for me.” He added that many questions remain, noting, “There are still plenty of questions that are unanswered, particularly around where the boundaries should be between logged-in and logged-out experiences.”