Reddit flags volatile search referrals as US user growth slows
Published On 31 Jul, 2026
The social media company operates in a highly competitive market. Bigger rival Meta through its Threads communities hub and new Forum app for Facebook Groups users appears to be directly targeting Reddit’s core community model.
“Search referrals were choppy in the quarter, and traffic was more volatile later in the quarter, but the bigger picture is unchanged: the commercial business is strong,” Co-founder and CEO Steve Huffman said in a letter to shareholders.
AI overviews have yet to make a similar level of positive impact as traditional “10 blue links”, Huffman said on the company’s post-earnings call.
Reddit’s user growth is shifting toward international markets that generate less revenue than the U.S. The company reported average revenue per user of $11.85 in the U.S., compared with $2.26 internationally.
Daily active unique visitors in the U.S. rose 6% in the second quarter, down from 7% in the prior quarter, while international DAUq jumped 28%.
COO Jen Wong told Reuters that “SEO headwinds” caused by changes in search algorithms “more than offset” the company’s efforts in terms of user acquisition in the quarter.
Still, product improvements are helping convert lower-engagement visitors from search engines into loyal app users, she said.
Reddit also forecast slower revenue growth in the third quarter. However, the forecast range of $860 million to $870 million was above LSEG-compiled analysts’ average estimate of $829.1 million.
“The company’s advertiser growth in the second quarter was 70% year-over-year. So, we continue to onboard a lot more new advertisers onto Reddit,” Wong said.
