For 20 years, Reddit let people browse its content without an account, a commitment that Steve Huffman, its co-founder and chief executive, has long associated with the open internet. On Thursday, he set out a different course: Reddit is moving to a primarily logged-in experience, betting that the users it knows are more valuable than the anonymous visitors it may lose.
Huffman described the decision as personally difficult. “I don't know about you, but as someone whose life has been defined by the open internet, it's a big change for me. But I've come to the conclusion that this is the right decision for our platform and the right decision for our business,” he wrote.
The shift comes as Google’s AI overviews have reduced the referrals that once brought readers from search results to Reddit. Search traffic fell by more than 1 million referrals on average per week in October, according to the company.
Reddit’s US daily active users fell from 53.2 million in Q2 to 50.7 million in Q3, a 2% year-over-year decline. Huffman told CNBC that traffic from Google went “down meaningfully in this quarter” because of the “shift to AI mode and AI overviews”.
That traffic decline sits beside a far stronger advertising business. Revenue rose 53% year-over-year to $895 million in Q3, while advertising revenue increased 54% to $847 million. Average revenue per daily active user in the US rose 53% to $13.82, and net income climbed 74% to $283 million.
Logged-in users are central to that calculation. App and logged-in daily active unique users account for “over 80% of the monetization on Reddit”, Huffman said.
He said the requirement would improve the user experience, support Reddit’s advertising business and make the platform “more protective of Reddit data”. The company says “the vast majority” of unauthorised access occurs through its logged-out experiences.
Reddit will first test the requirement in select markets outside the US in the fourth quarter of 2026. It is still deciding which content will remain available to logged-out visitors and when it will show users a “hard prompt” to sign in.
The company is also rebuilding its incognito mode to allow anonymous browsing within the new logged-in framework.
The plan also reshapes Reddit’s relationship with Google, which has a data-licensing agreement reportedly worth about $60 million a year for access to Reddit data for artificial intelligence training. Reddit remains in negotiations with Google over that agreement, and Huffman said there were “active discussions” without giving details.
Its other revenue segment, which includes data licensing, rose 35% year-over-year to $48 million in the third quarter.
Huffman said Reddit was “the last platform to provide basically unfettered logged-out access”. The decision is one of the most significant changes in Reddit’s 21-year history.
Investors reacted sharply after the earnings release and announcement, with Reddit shares falling over 15%.
Comments (0)