Reddit plans to introduce mandatory registration to access the platform — CNBC
Reddit plans to require all users to create an official account to access the social platform. The company announced this alongside its third-quarter report. As CNBC reports, testing of the new model will begin in the fourth quarter outside the United States.
Reddit CEO Steve Huffman did not name specific deadlines for the full implementation of the requirement, citing the complexity of changes to the platform’s operations. The company is still determining exactly what content unregistered visitors will be able to view. Huffman called the upcoming registration a major change for Reddit, which has so far provided virtually unrestricted access without signing in to an account.
Fewer referrals from Google
According to Huffman, one of the main factors behind the decision was a significant decline in search referral traffic from Google in the third quarter. He expects the trend to continue in the fourth quarter. Previously, changes to Google’s algorithms aimed at displaying authentic content from internet forums helped Reddit grow its audience. However, the development of AI Overviews and related chat features has negatively affected search referrals.
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The company seeks to increase the number of app users and those who access the platform after logging in. Such users are more active and more valuable to advertisers, as Reddit generates most of its revenue from online advertising.
Financial results and forecast
In the third quarter, Reddit generated $895 million in revenue, exceeding the LSEG forecast of $878 million. Earnings per share amounted to $1.40, compared with the expected $1.35. At the same time, the company’s fourth-quarter forecast of $1 billion to $1.03 billion in revenue was below Wall Street expectations of $1.05 billion. After the report was published, Reddit shares lost more than 11%.
The number of daily active unique users increased by 12% year-on-year to 130.3 million, but fell short of analysts’ forecast of 133.7 million. In the United States, the figure declined by 2% to 50.7 million. Average revenue per user was $6.87, exceeding expectations of $6.50. Revenue from other areas, including data licensing, rose by 35% to $48 million.
