Reddit Says It Is Moving to a Logged-In-Only Site, With Tests Outside the US This Quarter

Reddit is closing the front door. CEO Steve Huffman said in a letter to shareholders on Thursday, Oct. 29, that the company is shifting "to a logged-in-only experience."

The company will start testing the requirement in "select" markets outside the U.S. in Q4. Reddit has not named those markets. It has not given a date for a global switch either. Huffman said the test results will determine what a logged-in-only Reddit looks like worldwide.

Why Reddit says it is doing this

Huffman gave four reasons in the letter. Logged-in use will "ensure our users have the best Reddit experience," it is "better for our business because we will have more signals for ads targeting," it protects "Reddit's extremely valuable corpus of data," and it helps the company "adapt to emerging regulations around the world."

Huffman did not name age-verification laws. He also said "the vast majority of unauthorized access to Reddit" runs through logged-out sessions, which is the scraping problem in his own words.

The ad argument is simple. Reddit says more than 80% of its revenue already comes from logged-in and app users. Those users hand over more data about what they like, and advertisers pay for that.

The traffic problem

The timing follows a sharp slide in Google referrals. Huffman wrote that search traffic "was down meaningfully in Q3," with logged-out and web traffic taking the biggest hit. In October, referrals fell by more than 1 million per week on average.

He warned that if that pace holds, daily active unique users could fall by a low-double-digit percentage in Q4 from the current base of about 130 million. On the earnings call he blamed Google's AI mode: "The reality is, the AI mode does not drive traffic, not for us and not to anybody, as far as I know."

The U.S. numbers are already soft. U.S. daily active users dropped from 53.2 million in Q2 to 50.7 million in Q3, down 2% from a year earlier. Global daily users were flat from the prior quarter at 130.3 million.

The money is fine

The business itself is doing well. Q3 revenue rose 53% to $895 million, above the roughly $875 million Wall Street expected. Net income climbed 74% to $283 million.

Advertising revenue grew 54% to $847 million. Non-advertising revenue, which includes AI data licensing, grew 35% to $48 million. U.S. revenue per daily user jumped 53% to $13.82, while the global figure rose 36% to $6.87.

So Reddit is earning far more per visitor while the supply of casual visitors shrinks. Logging in is the company's answer to both problems.

What logged-out users keep, for now

The plan has gaps. Huffman said "the front page being available logged-out is useful and important," and that people arriving from a shared link or a search should still see the content they were sent to. He told analysts the company must "find the right boundary" before a hard login prompt appears.

For people who want to read without tying activity to an account, Reddit says it rebuilt and is re-releasing a read-only incognito mode in its app. Huffman called it "truly private." An account requires an email address, a username and a password, but no phone number.

This is the latest in a string of moves that push people toward accounts and the app:

• Reddit made its API expensive in 2024, which effectively shut most third-party apps.
• As of July, Old Reddit requires a login. Reddit later blocked it for anyone who has not logged in within the previous six months.
• Reddit is testing a requirement that mobile web users move to its app. Huffman said only about 13% of eligible mobile web users currently see that prompt, so it has "room to scale."

Huffman called the logged-in shift a "big change." Reddit has been testing a desktop login requirement since at least August, according to user reports.

The data deals

The data-protection argument ties directly to Reddit's licensing business. The company has AI training arrangements with OpenAI and Google. The Google deal is reportedly worth about $60 million a year. Huffman said there are "active discussions" about those deals but gave no specifics, adding that any deal "needs to advance our long-term strategy."

A walled site makes it harder for anyone to take Reddit's posts for free, which strengthens Reddit's hand at the negotiating table. It also makes the content less visible to the open web.

Not everyone is going that way. Discord recently decided to make discoverable server messages searchable on Google, the opposite bet on how to handle a web increasingly mediated by AI.

What to watch

The Q4 tests will show how many logged-out visitors turn into account holders and how many just leave. Reddit has not yet said which markets it will test or when a hard login prompt will appear. Whether the company can offset a projected double-digit drop in daily users with deeper engagement from the ones who stay will show up in its Q4 results.