Reddit 2026 Q3 Earnings Call

Thanks, Jonathan. Hi, everyone. Welcome to Reddit's third quarter 2026 earnings call. Joining me are Steve Huffman, Reddit's Co-founder and CEO, Jen Wong, Reddit's COO, and Drew Vollero, Reddit's CFO. I'd like to remind you that our remarks today will include forward-looking statements, actual results may vary. Information concerning risks and other factors that could cause these results to vary is included in our SEC filings. These forward-looking statements represent our outlook only as of the date of this call, and we undertake no obligation to update any forward-looking statements. During this call, we will discuss both GAAP and non-GAAP financials. Reconciliation of GAAP to non-GAAP financials can be found in our letter to shareholders. Our third quarter letter to shareholders and earnings press release are available on our investor relations website and investor relation subreddit. Now I'll turn the call over to Steve.

Thanks, Jesse. Hi, everyone. Thank you for joining us, and welcome to our quarterly earnings call. In Reddit's 21 years, the internet has changed in ways that would have been impossible to predict. We've gone from flip phones to smartphones to personal AI agents. Through it all, Reddit has always owned our own corner of the internet, offering people something that no one else does. Social media has evolved from friends and families to followers and famous people, and from status updates to the mindless scroll. Web search is evolving from a gateway to the web to becoming an an AI-powered destination itself. While extraordinarily useful and powerful, AI search solves a different problem than Reddit. AI does not fulfill people's fundamental need for community, connection, and belonging with other people, and it lacks context and nuance.

The Reddit experience captures the human experience in a way that no other platform can replicate. Only Reddit can help people navigate life's journey through the lens of other people's lived experiences. Only Reddit can help you feel both like a multifaceted, unique individual and a part of a greater whole, and do so without needing to reveal your real-world identity. That's why Reddit is, and always has been, a distinct and direct destination. People seek out Reddit because we meet a universal need they simply can't get anywhere else online. Our work now is about doubling down on what makes Reddit Reddit, and making Reddit more of a daily habit. We come into that work with clear advantages and revenue momentum in the business, and you can see that in the exceptional commercial results we delivered in the third quarter.

We generated 53% revenue growth, something few companies are doing, and it is even more significant when you consider that is on top of nearly 70% revenue growth last year. Those results in Q3 helped us cross $3 billion in revenue over the last 12 months. Our margins, which were already industry leading, expanded across the board. Reddit's continued growth at scale is proof of the strength of our business, the demand for our platform, and the value we provide advertisers. It is that consistent delivery of growth and profitability that earned us a place in the S&P 500 index earlier this year. Earlier this quarter, excuse me. Yet, while our business continues to grow significantly, internet search and how people discover things online continues to change rapidly and significantly. Our search referral traffic was down meaningfully in Q3, with the decline accelerating later in the quarter.

The biggest impact was on logged out and web traffic, but some of the impact flows through to logged in and app traffic, since search referral is a common source of re-engagement for users. The company helped to offset the declines by both driving reach, primarily through user marketing, and also by continuing to improve the product. These declines have continued into the early part of Q4. During October, we have seen that search traffic has dropped by more than 1 million referrals on average per week. If this rate of decline continues, current trends would suggest that total DAUq could fall in Q4 by a low double-digit percentage from our current base of 130 million DAUq. However, search referral trends do not determine our relevancy, and they do not define our future. Logged in and app dial are our most valuable users, and they are our primary focus.

We grew logged in and app dial sequentially. Together, these make up the vast majority of engagement and over 80% of the monetization on Reddit. Growing this high-value audience speaks to the strength of Reddit as a destination, and this is what matters for the long-term health of our platform and our business. As we look ahead, our strategy to make Reddit a direct daily habit for more people is simple. Make Reddit awesome, grow community and belonging, and bring in new audiences. Making Reddit awesome means making it more relevant and easier to navigate, getting to personalization faster, and creating fun new experiences on Reddit. This will both improve retention of new users and deepen engagement of our core users. Our work in ML feeds and app performance is delivering results.

The percentage of new users who return the first week after installing the Reddit app is up double digits quarter-over-quarter and over 50% year-over-year.

Video creation and consumption are both up, as are chained video views. We will continue our work in these areas in the coming quarters, and I am particularly excited about some of the areas we will be testing to make the core feed experience more consistent and predictable, and to grow some of our new experiences like games and visual podcasts. To grow community and belonging, we have been making it easier to create, grow, and contribute to communities on Reddit. This quarter, we have continued to grow the number of communities on Reddit and increase the contribution from our users. We added another 1 billion posts and comments to our corpus. Looking forward, our work will be to make subreddits more distinct, to deepen the sense of belonging by making joining subreddits more intentional and significant, and to make moderation much easier and more consistent by giving moderators AI-powered tools.

This approach has helped our own enforcement team reduce the median time to action on violating content from 58 hours to 5 seconds this year. Our current opportunity is to better retain the large cohort of users who try Reddit for the first time every day by executing on the above. We see a large number of unattributed, AKA word-of-mouth installs every day. We also have a large number of reinstalls, which we can mitigate through things like an improved incognito mode in the app. Of course, we will continue to convert our still significant number of search-referred users from mobile web to app. Currently, only about 13% of eligible mobile web users are seeing the app conversion prompt, so this has room to scale.

While early, so far, we have seen that app users that come to Reddit through marketing retain at rates similar to app users that come organically, so we will continue to invest here. Together, these efforts will help us reach more people and convert more first-time users into regular Reddit users. A key piece of work to retain new audiences is shifting Reddit to a logged-in only experience. It is a big one for us and it is a big one for me. I want to take a minute to outline why we are making this change. Moving to primarily logged in will ensure our users have the best Reddit experience possible and can find the content and communities most relevant to them. It is better for our business because we have more signals for ads targeting, and being logged in leads to higher engagement generally.

It also allows us to protect access to Reddit's extremely valuable corpus of data and helps us better adapt to emerging regulations around the world. In Q4, we will begin fully testing this in select markets outside the U.S. The results of those tests will inform an optimized version of logged-in only Reddit globally. Pretty much all the major ad platforms have gone through this transition, so we are excited and are moving quickly. With the above work, we will make Reddit a fun, fulfilling, direct daily habit for every internet user. Thank you, and now over to Jen.

Thank you, Steve. Hello, everyone. Q3 was a strong quarter for Reddit. Revenue grew 53% year-over-year, and trailing 12-month revenue crossed $3 billion. This milestone reflects our ability to grow at scale. That growth is happening as the internet changes quickly. AI is reshaping how people find information and get things done. At the same time, lived experience continues to increase in value as an essential source for advice and as a knowledge source for AI assistance. People turn to other people when they need a second opinion from someone who actually bought insurance for the first time, or who is navigating mid-40s fitness, and to savor the sense of belonging from people coming together to share fun, hardships, and wins. As synthetic content and automated summaries become more common, Reddit's conversations and communities are an increasingly valuable destination for people and a high-intent audience for advertisers.

These real experiences and perspectives help people make big and small decisions every day, and that's why half of U.S. shoppers say they come to Reddit to verify AI recommendations. We see significant opportunity ahead for our business, and we're making progress, reflected in strong customer retention, growing share of wallet, and more always-on advertiser relationships. These trends give us confidence in Reddit's ability to deliver durable, differentiated growth. Now moving to our results. In Q3, advertising revenue grew 54% year-over-year to $847 million. Growth came from both pricing and impressions, with pricing outpacing impressions as we delivered on our strategy to make every impression more valuable. We saw that translate into results. In Q3, click volume grew over 50% and conversion volume more than tripled year-over-year. We also saw strength across our primary sales channels, including large customers and scaled.