Schwab Network on $RDDT (Oct 30, 2026)
Reddit's strong position has cracked: shares fell more than 20% post-earnings and were already down over 43% this year, as its Alphabet search relationship cooled a second straight quarter. Last quarter's beat doesn't matter now; US users fell 2% and the CEO warns Q4 users could decline at a double-digit rate as search referrals drop more than 1 million a week, while investors doubt 24% international growth offsets the US slowdown; forced-login tests may only work once.
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but let's talk about Reddit for a moment. This is the second quarter in a row where this relationship with Alphabet is getting colder and it has had a major impact.
Yes, Reddit's strong position has definitely cracked and you can see it in the pressure on the shares today. Reddit shares have fallen by more than 20%, so the decline continues.
This is a steep decline , down about 25%. Keep in mind, at the start of the day today it was already down more than 43% since the start of the year , so this is adding further pressure to the pressure.
They actually exceeded expectations last quarter, but that does n't matter now. Earnings per share were $1.40, revenue was $895 million.
The problem is what US user growth looks like. It grew by 12% , but that was less than expected , so they had 130.3 million active users. US users actually decreased by 2%. International users grew at a rapid pace of 24%.
So the question is, can overseas expansion make up for the slowdown in the United States? According to investors, that is clearly not enough at the moment. And the clicks are getting lower because Alphabet had that relationship with Google where if you searched you would go to Reddit.
You could have clicked on it, but the CEO says that search referrals are decreasing, which is how Google traffic works. He said it was dropping by an average of more than 1 million per week in October.
If this trend continues, he warns that the number of users in the fourth quarter could decline at a double-digit rate from the current base, i.e. at a low, but still double-digit rate.
So, they're planning to test another thing , and I've seen it myself as a user, because I personally used Reddit through Google search, not wanting to log in. But now I have personally experienced forced login.
They plan to test forcing users to log in. They say it will start outside the United States.
Hello, I am here in the United States. The pressure on Reddit is mounting , Alex. Yes, this seems to be a move by Reddit, similar to Netflix's password tightening.
This strategy can only be used once, let's see if it is as successful as Netflix's attempt.
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