Reddit Reports Slower U.S. User Growth Amid Volatile Search Traffic
Reddit reported slower user growth in the United States during Q2, citing volatile search referrals as a key factor affecting performance. Despite an upbeat revenue forecast and strong advertiser growth of 70% year-over-year, its shares fell about 12% in extended trading due to concerns over U.S. market dynamics. The company faces competition from Meta's Threads app and Forum for Facebook Groups, which are targeting Reddit’s community model. CEO Steve Huffman noted that AI-driven search results have not yet matched the effectiveness of traditional links in driving traffic. While international user growth accelerated significantly (28% quarter-over-quarter), it generates less revenue compared to U.S. users. Reddit's Q2 revenue rose 61% year-on-year to $805 million, exceeding expectations. The company also reported strong advertiser adoption and is leveraging AI tools for ad performance optimization.
Topics: competitor activity revenue forecast search traffic volatility user growth