Investors punished Reddit shares after the company flagged volatility in Google search referral traffic, overshadowing robust financial results.
Reddit reported Q2 2026 revenue of $805 million, up 61% year-over-year, and net income of $253 million, or $1.25 per share. Both figures surpassed Wall Street estimates of $730 million revenue and $0.95 EPS.
The company also issued bullish guidance, forecasting Q3 revenue between $860 million and $870 million, above the $854 million consensus. Adjusted earnings were projected at $385 million to $395 million. Despite the strong performance, shares fell 23% post-earnings.
The decline followed Reddit’s disclosure of choppy Google search referral traffic, a key driver of user growth. The warning highlighted investor sensitivity to platform dependency risks, even amid record financial results.