Reddit experienced a significant traffic decline following a recent Google search algorithm update, CEO Steve Huffman disclosed during the company's fourth-quarter earnings call on Wednesday.
"These changes happen all the time. I'd say ballpark, twice a year, not the first, not the last," Huffman said, attempting to downplay concerns about the platform's traffic volatility. The impact primarily affected logged-out users in the United States, according to the CEO.
The platform reported 101.7 million daily active unique users in the fourth quarter, marking a 39% year-over-year increase but falling short of Wall Street's expected 103.8 million users. The traffic disruption primarily affected "logged-out users" browsing Reddit without an account, Huffman explained.
Despite the traffic disruption, Huffman maintained an optimistic outlook, noting that the decline was temporary. "This one was particularly interesting because it really was a swing—down, but then a recovery shortly thereafter. Happened right at the end of the quarter," he explained.
The social media platform still managed to beat revenue expectations, reporting $427.71 million in Q4, surpassing analysts' projected $405.26 million. However, user growth fell short of Wall Street estimates, with daily active unique users reaching 101.7 million instead of the expected 103.8 million.
Huffman pointed to some positive indicators amid the challenges, including an increase in Google searches containing the term "Reddit" on their search dashboard. The platform also reported strong international engagement, with a 46% rise in users from outside the US.
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