In This Article
Follow BestForAndroid
Reddit just posted one of the best quarters in its history. Wall Street barely blinked before the stock started falling anyway.
Reddit reported second quarter 2026 earnings of $1.25 per share against analyst estimates of $0.95, with revenue up more than 60 percent to roughly $805 million. Shares still dropped sharply in after-hours trading once CEO Steve Huffman told investors that Google search referral traffic had turned “choppy” during the quarter, and that Reddit is still looking for a “win-win” with Google over how AI Overviews use Reddit’s content.
Why the stock fell despite a beat
Every headline number was strong. Revenue grew for an eighth straight quarter, adjusted earnings topped Wall Street targets, and Reddit’s own guidance for next quarter came in above analyst expectations.
None of that mattered once Huffman flagged the search traffic issue. Shares sank double digits within hours, and the slide continued over the following days as investors weighed how much of Reddit’s growth still depends on Google sending people to the search engine.
What Huffman actually said about AI Overviews
On the earnings call, Huffman drew a clear line between the old Google and the new one. He said the traditional “10 blue links” search format drove real value for users and publishers alike. AI Overviews, in his words, has “yet to make a similar level of positive impact.”
He added that Reddit and Google are still looking for that win-win, and that there’s no simple binary decision to make here. That comment lands against reporting that Reddit has considered walking away from its roughly $60 million annual data licensing deal with Google. The same deal lets Google train on Reddit’s posts.
What this means next time you search something on your phone
If you’re an Android user, this fight touches you more than it might seem. Reddit is leaning harder into its own app, pushing people to open threads directly instead of finding them through a search box.
Google, meanwhile, has said its AI tools are sending billions of visits to sites every week, a very different read on the same relationship.
Somewhere between those two claims lies the actual experience you’re having every time you ask Google a question that Reddit’s users answered years ago.
Reddit built its entire business on people showing up to read what real users have experienced and had to say about any given topic. If Google keeps getting to say it for them by summarizing through AI, that business will ultimately get a lot harder to run.
