Reddit’s Q2 Growth Does Not Explain Its Google Exposure

The figures in the operating-metrics table are not referral data. They do show a business still adding users and revenue across two markets with very different monetization levels. ARPU is quarterly revenue divided by average DAUq in the relevant geography; for advertising it is assigned by where impressions were delivered, while other revenue is assigned by the customer’s billing address.

The Google question is a measurement gap

Huffman wrote that search referrals were “choppy” and traffic became more volatile later in the quarter, while acknowledging that Reddit has low visibility into referral traffic. That matters because Google is a route Reddit has relied on to land new users and, through data licensing, one of Reddit’s two largest licensing partners alongside OpenAI, as the earnings report describes it. Reddit’s “Other revenue,” which includes its data-licensing business, was $43 million in the quarter, up 24% year over year. The category does not disclose Google’s share, so it cannot be used as a measure of the value of that relationship alone.

Google’s AI Overviews are the AI-powered answers that appear in its search product. Huffman said traditional search’s “10 blue links” had driven broad value and growth, while AI Overviews had not produced a similar positive impact. In comments reported after the call, he said Reddit was still looking for a “win-win” and that there was no simple binary decision about its options.

That is a company assessment, not a causal finding. Neither the letter nor the reported comments provide a referral-traffic series, a Google-specific breakdown, or a test separating AI Overviews from other changes in search behavior. The disclosure supports concern about exposure; it does not establish that Google’s AI answers caused the late-quarter volatility.

Reddit’s company-reported shareholder letter shows the app-download and desktop-login upsells it said launched in Q2. Source: Reddit Investor Relations.

Reddit is betting on habit, not a return to old search traffic

Management’s stated response is to make the first visit less disposable. Reddit said it is directing web users to the app, where it says they are more engaged; in Q2 it launched mobile-web app upsells for deep-funnel users and a desktop login upsell. It also cited feed-model updates, easier posting and community discovery, video in comments, and games on its Developer Platform as product work intended to increase contribution, session frequency and repeat use.

The early retention signal requires caution. Reddit said retention of new app users rose 50% year over year on a relative basis, explicitly noting that it came from a small base. The company also said product work and consumer marketing helped daily users offset search headwinds, but supplied no experiment, conversion rate or cohort data that would measure that contribution.

The ambition is substantial: Reddit is targeting 1 billion daily users globally and 100 million in the U.S. Those are company goals, not achieved results or forecasts. Its Q3 outlook—$860 million to $870 million in revenue and $385 million to $395 million in adjusted EBITDA—is likewise based on current estimates. Adjusted EBITDA is a non-GAAP measure; Reddit defines it by excluding, among other items, interest, taxes, depreciation, amortization and stock-based compensation from net income.

What Reddit needs to disclose next

The next useful evidence is not simply whether Reddit and Google renew a licensing arrangement. It is whether Reddit can show, over comparable periods, how much search volatility is concentrated among logged-out visitors, which geographies or query types are affected, and what share of those visitors installs the app and remains active.

Until then, the two parts of the story should stay separate. Q2 demonstrates a fast-growing and profitable advertising business. It does not demonstrate that Reddit has measured—or solved—the risk that a changing search page could make the acquisition of its next loyal users less predictable.