Reddit Is Locking Out Logged-Out Users After Google’s AI Choked Its Traffic
Google's AI search is draining Reddit's logged-out audience by the millions each week, and Reddit's proposed fix could shrink that audience even further before it saves the company.
Reddit (NYSE:RDDT | RDDT Price Prediction) CEO Steve Huffman opened the company’s third-quarter call on October 29, 2026, with a problem he cannot fix himself: “Our search referral traffic was down meaningfully in Q3, with the decline accelerating later in the quarter.”
In October, search referrals fell by more than 1 million per week on average. He blamed Google’s AI Overviews and AI Mode.
Reddit will respond by fully testing a logged-in-only experience in select markets outside the U.S. in the fourth quarter. “This is a test, but we are going to make this transition,” Huffman said.
Reddit’s 27 billion posts and comments have never been worth more to AI companies. Yet AI search is cutting off the free traffic that built its audience, and a login wall could shrink that audience further before it helps.
Shares closed at $129.60 on October 29 and are down 43.62% in 2026. Google parent Alphabet (NASDAQ:GOOGL) fell 12.64% to $283.82 the same day after its own earnings report.
The firm commitment now is a fourth-quarter test in unnamed non-U.S. markets. Reddit did not disclose which countries, when a global launch would start, or how much revenue logged-out visitors generate.
Logged-out visitors can still browse the main reddit.com site. Only the legacy Old Reddit site requires a login, a change made this summer because its logged-out version was “a significant source of abusive scraping and automated traffic on the platform.”
How AI Search Drained Reddit’s U.S. Audience
Search referrals mostly bring logged-out visitors. U.S. daily active uniques (DAUq, Reddit’s count of daily users) fell 2% to 50.7 million, the first U.S. drop since the 2024 IPO, while international DAUq rose 24% to 79.6 million.
Total DAUq held at 130.3 million, flat with the prior quarter. Huffman warned that if the decline continues, total DAUq “could fall in Q4 by a low double-digit percentage” from a 130 million base, a warning management framed as dependent on current trends.
Huffman said, “The reality is the AI mode does not drive traffic.”
Strong Profits Collide With Softer Guidance
Revenue rose 53% to $895 million, ahead of the $878.4 million estimate. Net income grew 74% to $283 million, or $1.40 per diluted share, and adjusted EBITDA rose 70% to $402 million.
Fourth-quarter guidance calls for $1.00 billion to $1.03 billion in revenue, but adjusted EBITDA of $480 million to $510 million is missing the $512.2 million estimate, and shares sank after the report.
Logged-in users drive more than 80% of monetization. Reach can fall faster than revenue if enough casual visitors sign up.
Login Wall Gives Reddit Leverage Over AI Scrapers
“Google is crawling us as hard as ever, so the demand hasn’t changed from their point of view either,” Huffman said.
Asked whether a login wall makes Reddit harder to scrape, he answered, “For sure.” That protects licensing deals with OpenAI and Google and supports lawsuits against Anthropic, Perplexity AI and three data-scraping firms.
Huffman offered no new licensing terms. He said only that Reddit is “in active discussions.”
What Reddit’s Fourth-Quarter Report Will Reveal
Reddit makes more per user each quarter, but the next report will likely show a shrinking audience, and advertisers tend to follow reach. The positive case needs proof that casual visitors convert to logged-in accounts at scale, and Reddit has disclosed no conversion data from the test yet.
The reason is Reddit’s fourth-quarter report. If total DAUq holds near 130.3 million while logged-in users keep growing, the login strategy is likely working, but a low double-digit drop would show the audience loss is outweighing it.
Contact [email protected] for any questions or corrections.
Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
