Why Reddit (RDDT) stock is trading lower today

What happened

Reddit reported third-quarter 2026 revenue of $895 million, up 53% year on year, and diluted earnings per share of $1.40, both beating estimates. It guided fourth-quarter revenue to $1 billion to $1.03 billion and adjusted EBITDA to $480 million to $510 million, both below consensus.

Confirmed

Global impact / market context

Investors value a company on future cash flows, so guidance below estimates signals slower profit growth ahead than expected. Reddit earns most revenue from advertising, which depends on users viewing pages. Fewer domestic daily visitors can reduce ad space sold and pressure revenue per user.

Analyst inference

The report separates past performance from outlook. Reddit beat third-quarter numbers but guided lower, and domestic daily active visitors fell by 900,000 to 50.7 million. Management linked the user softness to Google's expanding AI Overviews cutting search referral traffic by over 1 million weekly visits in October.

Analyst inference

What to watch

1. Fourth-quarter revenue is guided to $1 billion to $1.03 billion, and adjusted EBITDA, which means earnings before interest, taxes, depreciation, and amortization, is guided to $480 million to $510 million. Confirmed
2. Whether domestic daily active visitors recover matters because falling traffic reduces the ad space Reddit can sell, directly affecting advertising revenue and profit per user. Analyst inference
3. Watch how much of the decline in weekly search referral visits from Google's AI Overviews persists, since lower referral traffic can reduce new user signups and ad views. Analyst inference

Evidence

• stockstory.org