Reddit shares fall despite strong Q3 revenue and profit growth

Reddit, Inc. reported third-quarter 2026 revenue of $895 million, a 53% increase year-over-year, and net income of $283 million, up 74% from the previous year. Despite these gains, the company’s stock experienced a significant after-hours decline, dropping as much as 16.67% to approximately $108.00.

While overall revenue grew, Reddit’s daily active unique users (DAUq) in the United States decreased by 2%, falling to 50.7 million. Growth was primarily driven by international markets, where revenue climbed 67%. CEO Steve Huffman noted that the company is shifting focus toward a “logged-in-only experience” to reduce dependency on search engine referrals, which have seen declines potentially linked to the expansion of AI-driven search features.

Financial highlights include advertising revenue of $847 million, up 54% year-over-year, and a gross margin of 91.5%. Although the company beat earnings per share estimates, its revenue guidance for the fourth quarter was slightly below analyst consensus.