Reddit Will Go Login-Only. CEO Steve Huffman Blames Google

Reddit will test a logged-in-only experience in select markets outside the US starting in Q4, CEO and Co-Founder Steve Huffman told investors on the company's Q3 earnings call Thursday. Huffman framed the move as the first step toward bringing Reddit in line with how every other social media platform operates.

The commercial logic is straightforward. Logged-in users already account for more than 80% of Reddit's monetization, Huffman said, so a login wall doubles down on that strength. It also strengthens ad targeting and first-party data collection, protects Reddit's content from being scraped by AI crawlers, and puts the platform on firmer footing for complying with global regulation, including the worldwide push for tighter age verification on social media.

What happened to Reddit's search traffic?

Reddit lost 1 million search referrals per week in October, Huffman said. He attributed the drop largely to AI search. Google increasingly pushes searchers to AI Overviews and its Gemini chatbot instead of traditional results pages.

Huffman was blunt about the mechanism: "The reality is, AI Mode does not drive traffic, not for us and not for anybody, as far as I know. And so that's just a fundamental shift in how Google works. It used to be a traffic driver. Now it's not."

Google's algorithm changes this year also appear to have downranked machine-translated content. That hurts Reddit directly, because the company has touted AI translation as its way to reach users internationally, where its brand is less known and growth potential is greatest. The strategy has quickly become a liability.

Demand itself has not fallen. In the US, "Reddit" still ranks among the most-searched terms on Google, Huffman said. Meanwhile, "Google is crawling us as hard as ever," he added, meaning Google AI's appetite for Reddit content remains unchanged even as referrals shrink.

Huffman sees an irony working in Reddit's favor. Google's attempts to keep users inside its own ecosystem are training people to go straight to Reddit instead. Search traffic, he said, is no longer Reddit's main priority. The goal is to "make Reddit a direct daily habit for more people," with a push toward app downloads, where deeper engagement is possible.

Early evidence supports that push. The percentage of new users who return to Reddit in the first week after downloading the app rose by double digits in Q3 versus Q2, and by 50% year over year.

How fast is the ad business growing?

Fast. Q3 revenue rose 53% year over year, a growth rate Huffman noted few companies are achieving. Ad revenue grew 54% to $847 million, driven by growth in both impressions and pricing, said COO Jen Wong.

Reddit joined the S&P 500 in Q3, which Huffman attributed to its strong growth since going public in 2024. The company passed $3 billion in revenue over the past 12 months and is now targeting $5 billion in annual revenue.

Performance metrics climbed alongside revenue. Wong reported:

• Click volume up 50% year over year
• Conversion volume tripled
• Lower-funnel performance revenue (shopping and app-install campaigns) up more than 95%
• Average revenue per user up 36% to $6.87

What is new in the ad stack?

Reddit Max, the company's machine learning ad optimization platform, entered public beta in Q3. A new Max feature lets advertisers manage multiple product lines or creative themes within a single campaign.

Mid-market advertisers grew 50% year over year. Video campaign revenue from upper-funnel advertisers doubled in Q3, and Reddit introduced a 15-second engaged video view objective in public beta to, in Wong's words, "help advertisers optimize for people more likely to engage with longer form video."

For performance advertisers, the shopping campaign platform can now support up to 20 million products. For B2B brands, Reddit introduced "in-market audience targeting tools," which Wong said improved "average cost per action" by 7% compared to other first-party targeting options.

On the ad tech side, revenue from advertisers using Reddit's ads API grew 45% compared with Q2. Wong announced Reddit's first third-party API integration for Max campaign management, with the ad optimization platform Smartly. She also pointed to measurement integrations with Innovid and Skai announced in August, a beta integration with HubSpot, and the Shopify integration for lower-funnel campaigns that became generally available in May.

The Shopify test produced concrete results. Ethnotek, a backpack and accessories brand, saw a 4x improvement in ROAS (return on ad spend) and a 40% improvement in CPA (cost per action), Wong said.

The open question for investors is how much higher ARPU can climb once the login wall converts anonymous readers into tracked, targetable, signed-in users.