❯ Reddit revenue grows 53%, while user growth and its outlook trail expectations

Advertising outgrows the audienceReddit’s quarterly release reported $895 million of revenue, up 53% and above expectations of roughly $878 million. Advertising revenue rose 54% to $847 million and remained the core income source. Net income was $283 million. The platform continues to improve the monetization of user attention.

Traffic changes weigh on usersAverage daily active uniques, or DAUq, reached 130.3 million, up 12% but below expectations. This measures identifiable daily visitors. Investor’s Business Daily reported that falling external search traffic is weighing on user growth and that Reddit plans to test a log-in requirement. Shares fell after the results.

Access and retention become more importantFourth-quarter revenue guidance is $1 billion to $1.03 billion, below market expectations. Sustained growth needs reliable traffic and retention alongside stronger advertising monetization. Requiring log-ins changes the barrier for occasional visitors and increases the importance of direct visits, signed-in users and Reddit’s own applications.

▮ SIGNALBetter ad monetization can make revenue outgrow users, while acquisition channels and retention still determine how durable that growth becomes.