Reddit fell 29.3% after earnings as investors focused on accelerating search-referral declines and the risk that total DAUqs could fall by a low double-digit percentage in Q4. The decline continued into October, while management said it expects the trend to persist if current conditions continue.
- Q3 revenue grew 53%, and the company said margins expanded across the board; trailing 12-month revenue exceeded $3 billion.
- Search-referral traffic declined meaningfully in Q3, with the drop accelerating later in the quarter. In October, referrals fell by more than 1 million per week on average.
- Management said current trends could mean total DAUqs decline by a low double-digit percentage in Q4 from the current base of 130 million. Search-referral declines have continued into early Q4.
- Logged-in and app DAU grew sequentially; those users account for over 80% of monetization, according to management.
- New-user first-week app retention improved double digits quarter-over-quarter and over 50% year-over-year.
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