Reddit shares fell 29% after its fourth-quarter sales forecast

Reddit said on Thursday, 29 October, that its revenue rose 53% from a year earlier to $895 million in the third quarter, according to the company's results release. Advertising revenue rose 54% to $847 million. Net income was $283 million, or $1.40 a diluted share, up from $163 million a year earlier, and free cash flow was $363 million.

For the fourth quarter, Reddit forecast revenue of $1.00 billion to $1.03 billion and adjusted EBITDA of $480 million to $510 million. The company said the guidance is based on its current estimates and is not a guarantee of future performance. Analysts had expected about $1.05 billion in fourth-quarter revenue, CNBC reported.

The shares fell 29.22% on Friday, 30 October, CNBC said, the largest one-day drop since the company listed in 2024. User figures in the release showed daily active uniques up 12% to 130.3 million worldwide, but down 2% in the United States, to 50.7 million. Logged-out daily users in the US fell 4%.

CNBC reported that Reddit plans to test requiring users to log in to see content. Chief executive Steve Huffman told CNBC that search referral traffic from Google went "down meaningfully in this quarter" because of AI features in search. CNBC said several analysts downgraded the stock after the results.

Reddit also said it bought back about 670,000 shares for $100 million during the quarter and held $3.03 billion in cash and marketable securities at 30 September. This article reports company results and one day's share move. It is not investment advice and does not say whether the shares should be bought, held or sold.