Reddit reported Q2 2026 revenue of $805 million, up 61% from the same quarter last year, with profit of $253 million — nearly triple what it earned a year ago. The company also told investors to expect $860 million to $870 million in revenue next quarter, more than analysts predicted. Despite those strong numbers, the stock fell over 10% in after-hours trading on July 30, 2026 (TechCrunch).

The quarter ended June 30, 2026. Reddit released its results after the stock market closed on Thursday, July 30, and held a conference call with analysts at 4:30 PM Eastern Time that same day (Reddit Investor Relations). The company also hosted an AMA session on the r/RDDT subreddit alongside the earnings announcement.

The selloff was not about the money Reddit made. It was about the number of people visiting the site. Reddit's U.S. daily active users — the count of people who visit at least once a day — dropped from 53.5 million in Q1 2026 to 53.2 million in Q2 2026 (TechCrunch). In his Q2 2026 shareholder letter, CEO Steve Huffman wrote: "Search referrals were choppy in the quarter, and traffic was more volatile later in the quarter, but the bigger picture is unchanged: the commercial business is strong."

Here is why that small drop matters. A large share of Reddit's visitors are not logged in to an account. They find Reddit pages by searching on Google or another search engine, then click through to read. But AI-powered search tools increasingly answer questions right on the search page, summarizing information from across the web without sending people to the original sites. Imagine asking a librarian where to find an answer, and instead of pointing you to the book, the librarian just reads you the key parts and sends you home. That means fewer people end up on Reddit's pages, where it can show them ads.

On the earnings call, a Wall Street analyst told Huffman directly that the stock was down sharply because investors sensed a "user problem, especially in the U.S." The analyst pressed further: "People are looking at the daily and saying…logged-out traffic is going to be under pressure because as search shifts to AI, you're not going to get referrals" (TechCrunch).

The Q2 decline in U.S. daily users, though small, is the first concrete data point suggesting that this AI search pressure has started to show up in the numbers investors watch most closely.

There was another concern. Reddit signed a deal with Google in 2024 to let Google use Reddit's content for training its AI (Google Blog). On July 22, 2026, Reddit's stock declined following a Wall Street Journal report that the company was considering ending that Google deal, ahead of its Q2 earnings release (CNBC). Reddit has since signaled it is unsure whether it will renew its data-licensing partnership with Google (TechCrunch).

On the earnings call, the analyst asked Huffman: "Do you see any world where you're not licensing data to Google and OpenAI next year?" Huffman responded that "Reddit is communities and conversation" and that its human aspect would continue to make it a destination for users. On the Google relationship specifically, he said: "I don't think there's a binary outcome…we will make sure that we're maximizing the value for Reddit" (TechCrunch).

That response leaves several doors open. Huffman's phrasing suggests Reddit may renegotiate terms rather than walk away entirely, or may attempt to get a better price by playing Google and other AI companies against each other. The reference to "maximizing value" rather than confirming the partnership will continue is the kind of careful ambiguity companies use when they have not yet decided, or have decided but are not ready to say.

The tension here cuts both ways. Reddit's revenue from letting AI companies use its data has been a meaningful source of growth, and walking away from Google or OpenAI would mean giving up that income. But the same AI companies paying for Reddit's data are also building search tools that may reduce the number of people who find their way to Reddit through a search engine. In other words, Reddit is getting paid by the very companies that may be cutting into its visitor traffic. Whether the licensing income makes up for the traffic losses is the question investors are now trying to figure out.

Huffman's argument that Reddit's community and conversations make it a place people want to visit on their own, not just through search, has logic behind it. Users who are logged in to accounts and actively participate in subreddits are less affected by changes in how search engines work. But the logged-out audience has been a big part of Reddit's recent growth, and the Q2 U.S. user number suggests that audience may be starting to shrink.

Reddit's Q2 results show a company growing revenue and profit at rates most public companies would envy, yet trading as though the underlying audience is weakening. The market is betting that AI search tools could shrink Reddit's visitor traffic faster than the company can replace it through logged-in users or data deals. The fact that Reddit's Q3 guidance beat expectations suggests management is not yet seeing that erosion in its advertising business. Whether that guidance holds, and whether the Google data deal is renewed, will likely determine the stock's direction over the next two quarters.