Reddit reported a strong second quarter, but its shares fell after the company warned that search traffic had become more volatile. TechCrunch reports that revenue reached $805 million, up 61 percent from a year earlier, while net income rose 183 percent to $253 million.
Those numbers beat Wall Street expectations, and Reddit also projected higher revenue for the next quarter. The concern came from CEO Steve Huffman’s shareholder letter, which said search referrals were choppy and traffic became more volatile later in the quarter.
AI is the reason investors are watching closely. Search engines are increasingly answering questions directly with AI summaries, which can reduce the need for users to click through to source websites. Reddit also has a data relationship with Google for AI training, making its position especially complicated.
The quarter shows that Reddit’s advertising and commercial business remain strong for now. The open question is whether AI-driven search changes will steadily weaken one of the web’s most important discovery channels.