Reddit’s Management Is “Obfuscating” a User Problem, Says Investor: “Right as This Metric Might Be Turning Against Them, They Opted to Just Hide It”

Reddit's CFO Drew Vollero recently announced that the company will discontinue reporting logged-in and logged-out user metrics starting in Q3 2026. This move has raised concerns among investors, as logged-in user growth of just 7% year-over-year was already a red flag for a stock trading at 40 times earnings. On the July 30 earnings call, CFO Vollero's decision to hide this key metric was seen as an attempt to obfuscate the potential deterioration of user engagement data.

Only 9% of Reddit's monthly active users log in daily, which is significantly lower than the 35% and 50% daily active users seen on TikTok and Instagram, respectively. Reddit's CEO, Steve Huffman, acknowledged the threat posed by Google Search AI overviews, which could reduce click-through rates to original sources by around 60%.

Despite this, Reddit's financial results in Q2 showed impressive growth, with revenue up 61.1% year-over-year at $804.9 million and advertising revenue increasing by 64% to $762 million. However, the company's U.S. average revenue per user (ARPU) of $11.85 remains significantly lower than larger social media platforms, indicating a need for improved monetization strategies.

Analyst Shawn O'Malley has downplayed the importance of this metric, suggesting that Reddit's overall revenue growth and advertising growth are sufficient reasons to maintain a positive outlook on the company.