Schwab Network on $RDDT (Oct 29, 2026)

But as we move on to the next topic, if we take a look at Reddit, we see that it has dropped by more than 10%. Their revenue in the third quarter increased 53% year-on-year to $895 million.

This exceeded the forecast of $869 million. Net income for the quarter was $283.3 million. This equates to diluted EPS of $1.40 per share. Both grew 70% year-on-year and exceeded expectations.

Adjusted EBITDA was $402.3 million, up 70% year-on-year. This was also higher than forecast.

The number of daily active users for the quarter was 130.3 million. This is below the target , but only by 3 million users. Search referral traffic decreased significantly in the third quarter.

Reddit has warned that if this decline in search referral traffic continues, the number of daily active users could drop to the low 10 percent range.

And for the fourth quarter, they forecast revenue of $1 billion to $1.03 billion. Adjusted EBITDA is $480 to $510 million, both of which are lower than forecasts.

Sam, I would like to know your opinion on this matter. We're still down 7.5%, but search referral traffic and Reddit has become part of this conversation with Google and Gemini and how these AI agents are impacting their traffic.

But now we are getting real signals. I mean, they're saying it dropped significantly in the third quarter. How disastrous could it be for Reddit if they ca n't come to a deal to restore these numbers?

Yes, I think this is a big deal for Reddit because the stock is down about 30% since the last earnings. This is very interesting in the context of what we are hearing from Google search , as analysts are referring to it as being cannibalized or consumed in the way it is today.

My question is, what will this mean for Reddit in terms of referral traffic?

Amidst all these AI agents, investors are essentially asking the company to learn how people are interacting with each other, and this is the expectation that the company will try to highlight the value of its platform.

So, let's see what they say on the call, especially since there is an expectation and possibility that they will try to turn the issue in that direction. I think investors just want to see proof of that.

Reddit shares fell by about 10%.