Reddit reported strong third quarter 2026 results, beating analyst expectations for both revenue and earnings. However, the company issued a cautious outlook regarding user growth, noting that a significant acceleration in search referral declines could lead to a low-double-digit percentage drop in Daily Active Uniques (DAUq) during the fourth quarter.
Key Highlights
- Revenue surged 53% year-over-year to $895 million, driven by a 54% increase in advertising revenue and broad strength in lower-funnel ad performance.
- Average Revenue Per Unique (ARPU) increased 36% globally to $6.87, with U.S. ARPU rising 53% to $13.82, reflecting significantly more efficient monetization.
- Daily Active Uniques (DAUq) grew 12% year-over-year to 130.3 million, missing the 15.4% consensus estimate as U.S. DAUqs specifically contracted by 2%.
- Management warned that search traffic referrals dropped by over 1 million per week on average in October, prompting a strategic shift toward a logged-in-only experience to be tested in Q4.