The search referral decline is the key variable to watch. If the trend continues, Q4 DAUq could drop 10-15% from 130M, which would pressure ad revenue and likely cause a guidance miss. The logged-in-only transition and user marketing investments are mitigation efforts but have not yet proven they can offset the search headwind. Monitor Q4 DAUq trends and any further commentary on search algorithm changes.
Price Chart
Executive Summary
Reddit reported Q3 2026 revenue of $895M (up 53% YoY) and diluted EPS of $1.40 (up 75% YoY), beating consensus estimates of $874.9M and $1.33. However, the CEO disclosed that search referral traffic dropped meaningfully in Q3 and has continued declining into Q4, with total DAUqs potentially falling by a low-double-digit percentage in Q4 if trends persist. The Q4 revenue guidance of $1,000M-$1,030M implies decelerating growth, and the user headwind from search algorithm changes is a material new risk.
Key Financial Metrics
Key Facts
- Q3 2026 revenue $895M, +53% YoY (beat $874.9M consensus)
- Q3 2026 diluted EPS $1.40, +75% YoY (beat $1.33 consensus)
- Net income $283M, +74% YoY; Adj. EBITDA $402M, +70% YoY
- Global DAUq 130.3M, +12% YoY; U.S. DAUq declined 2% YoY to 50.7M
- Search referral traffic declined meaningfully in Q3, accelerating late in the quarter
- October search traffic dropped by more than 1M referrals per week on average
- If current trends continue, total DAUqs could fall by a low-double-digit percentage in Q4
- Q4 2026 guidance: revenue $1,000M-$1,030M, Adj. EBITDA $480M-$510M
- Repurchased ~670K shares for $100M at avg $149.81 during Q3
- Added to S&P 500 index during the quarter
Financial Impact
Q3 revenue beat consensus by $20.1M (2.3%); EPS beat by $0.07 (5.3%). Q4 revenue guidance midpoint of $1,015M implies ~46% YoY growth, decelerating from 53% in Q3 and 69% in Q1. Potential low-double-digit DAUq decline in Q4 could pressure ad revenue growth further.
Segment Breakdown
| Segment | Revenue | Growth |
|---|---|---|
| U.S. | $718.9M | +50.0% |
| International | $176.1M | +67.0% |
Risk Factors
- Search referral traffic decline accelerating into Q4, threatening user growth and ad revenue
- U.S. DAUq already declining YoY (-2%) before the full impact of search changes
- Q4 revenue guidance midpoint implies significant deceleration from recent growth rates
- Transition to logged-in-only experience may cause short-term user friction
- Stock-based compensation rose 46% YoY to $136.4M, though as % of revenue declined 80bps to 15%
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001713445-26-000114 |
| Exhibit: exhibit992q326.htm | 0001713445-26-000114 |
| Document: 0001713445-26-000114-index-headers.html | 0001713445-26-000114 |
| Document: 0001713445-26-000114-index.html | 0001713445-26-000114 |
| Document: 0001713445-26-000114.txt | 0001713445-26-000114 |
| 8-K Data (Synthetic) | 0001713445-26-000114 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 30, 2026 2d ago | SC 13G | $90.18 | awaiting T+60 | awaiting T+60 | $91.73 (+1.72%) |
Oct 30, 2026 2d ago | SC 13G/A | $91.74 | awaiting T+60 | awaiting T+60 | $91.73 (−0.01%) |
Oct 29, 2026 3d ago | 8-K | $115.82 | awaiting T+60 | awaiting T+60 | $91.73 (+20.80%) |
Oct 27, 2026 5d ago | SC 13G/A | $134.70 | awaiting T+60 | awaiting T+60 | $91.73 (−31.90%) |
Oct 23, 2026 9d ago | Institutional Cluster | $144.25 | awaiting T+60 | awaiting T+60 | $91.73 (−36.41%) |
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Oct 16, 2026 15d ago | Insider Cluster | $155.14 | awaiting T+60 | awaiting T+60 | $91.73 (+40.87%) |
Sep 21, 2026 5w ago | 3 | $155.67 | awaiting T+60 | awaiting T+60 | $91.73 (−41.07%) |
Sep 17, 2026 6w ago | Insider Cluster | $150.85 | awaiting T+60 | awaiting T+60 | $91.73 (−39.19%) |
Sep 2, 2026 8w ago | Insider Cluster | $155.99 | awaiting T+60 | awaiting T+60 | $91.73 (−41.19%) |
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