Reddit’s third-quarter report on Oct. 29 delivered two problems at once. Its U.S. daily users fell for the first time since the company went public in 2024, and its chief executive blamed Google’s AI features for a drop in search traffic. The company’s response is a plan to test a primarily logged-in experience, which could make the Reddit login requirement a reality for many readers who arrive from Google.

Shares fell about 18% in extended trading after the call, according to Reuters. Investors were reacting to a business that depends heavily on one source of visitors, and the reaction shows how exposed that dependence has become.

Reddit blames Google AI Overviews for the referral drop

Reddit said search referrals fell by more than 1 million per week on average in October. On the earnings call, chief executive Steve Huffman named Google’s AI Overviews and AI Mode as the leading hypothesis for the decline.

Huffman was blunt about the features. “The reality is the AI mode does not drive traffic, not for us and not to anybody as far as I know,” he said on the call, according to TokenPost. He also told CNBC that Google search referral traffic had gone “down meaningfully in this quarter” because of the “shift to AI mode and AI overviews.”

The explanation has gaps. Reddit did not provide a search-engine breakdown, so it is unclear how much of the decline is specific to Google. The October figure also measures referrals, not people who have stopped visiting Reddit. The coverage reviewed for this story did not include a response from Google.

The forward warning matters more than the October number. Reddit said that if the decline continues at the same rate, fourth-quarter daily active uniques could fall by a low-double-digit percentage from a base of about 130 million.

Which U.S. readers will feel the Reddit login requirement

Reddit plans to test a primarily logged-in experience in select markets outside the U.S. during the fourth quarter, before any wider rollout, according to the Reuters report. Analytics Insight described the same test plan.

For American readers, the timing is unclear. Logged-out users in the U.S. who find Reddit through Google may soon need an account to see most content, but no date for a domestic rollout has been set.

The incentive is in the money. Huffman said logged-in users make up more than 80% of monetization. A login wall therefore looks less like a side effect of the traffic problem and more like a direct business decision.

What the first U.S. user decline means for Reddit

U.S. daily active uniques fell 2% to 50.7 million, which Reuters described as the first decline since Reddit went public in 2024. The global base was about 130 million. The U.S. drop is small in percentage terms, but it lands on a company that has built its pitch on growth.

Reddit’s scale is still large. Trailing 12-month revenue crossed $3 billion in the third quarter, and the company’s internal “north star” is $5 billion, according to the syndicated Reuters report.

This is not the first time Google has moved Reddit’s stock. In February, shares fell more than 15% after Huffman described traffic “volatility” tied to a Google algorithm tweak, according to Yahoo Finance. Wells Fargo analysts said the disruptions were “likely more permanent,” because search behavior is shifting with Google’s AI features.

Reporting reviewed for this story did not confirm where the shares closed in regular trading on Oct. 29 or Oct. 30. The 18% figure is an after-hours number, so the regular-session move could differ.

Why Reddit’s Google dependence is a structural risk

Reddit’s growth leaned heavily on Google. A prior Google search change favoring forum content helped its user base expand, and much of that growth came from logged-out users arriving through Google Search. The same channel is now the one Reddit says is shrinking.

Reddit’s answer is to build what it describes as a “direct, sticky, daily destination.” The company launched a “For You” feed the day before the earnings call, according to Jingletree.

Reddit also plans to keep licensing its content. Huffman said in a company statement: “We will continue licensing our corpus intentionally, but those commercial deals come with guardrails that protect our users and our business.” One source, Crypto Briefing, put the combined value of Reddit’s licensing deals with Google and OpenAI at roughly $60 million a year. That figure is under evaluation and should be treated as unconfirmed. The fight over AI training is also moving through the courts, where Wikimedia has asked a judge to separate training from copied outputs, as USA 24 reported.

Google’s side of the ledger is under strain too. Google reportedly said it is seeing “lower monetization” in AI Mode ads while expanding them to more countries, according to Jingletree, though that claim comes from a single source. Alphabet’s third-quarter earnings miss is a separate story, covered here.

What publishers and readers should do now

Publishers that depend on Google referrals face the same AI Overviews squeeze Reddit describes. Reddit’s numbers offer a template for measuring the damage.

For readers who use Reddit without an account, these steps reduce the risk of a surprise:

  • Create a free account now, so you are not locked out if logged-out access shrinks.
  • Go to Reddit directly for the communities you follow, instead of relying on a Google search to land you on a thread.
  • Publishers can pull their own Google referral data and split it by query type. That view shows which searches AI features are absorbing and which still send visitors.

These are general suggestions, not recommendations from any source in the reporting.

What to watch next

Three signals will show whether this becomes a broad U.S. change. The first is whether Reddit names the markets in its fourth-quarter test and sets a date for the United States. The second is whether Google answers Huffman’s claim that AI Mode does not drive traffic. The third is whether fourth-quarter daily active uniques fall by the low-double-digit rate Reddit warned about. Reddit has bet its next phase on signed-in users, and the next earnings call will show whether that bet holds up.