Bernstein: Reddit traffic declines, Pinterest monetization slows: Bernstein cuts price targets for both

Reddit revenue is still growing rapidly. Why are user concerns drawing more attention?

In the third quarter of 2026, Reddit revenue rose 53% year over year to 895 million dollars, above company guidance and market consensus; however, the margin by which it exceeded guidance narrowed compared with recent quarters. The midpoint of fourth-quarter revenue guidance was 1.015 billion dollars, up about 40% year over year and 3% below market consensus.
Over the same period, global daily active unique users (DAUq) rose 12% year over year to approximately 130 million, about 2% below market consensus; US DAUq fell by 2.5 million quarter over quarter and 2% year over year. Reduced search referrals primarily affected logged-out users: US logged-out users fell by 2.8 million quarter over quarter to 27.3 million, while logged-in users rose by 300 thousand to 23.4 million.
Management said search referrals fell by more than 1 million per week on average in October; if the trend continues, fourth-quarter global DAUq could decline by a low-double-digit percentage from 130 million. Pressure on the user base has made Bernstein more focused on the scope to grow revenue from existing users.

Reddit plans to test an experience focused on logged-in users in selected international markets in the fourth quarter, hoping to improve engagement and ad targeting while protecting platform data. Management previously said monetization per minute was similar for logged-in and logged-out users, but logged-in users stayed longer; logged-in users and app users already account for more than 80% of monetization revenue.
The trade-off in the transition is exchanging some reach for higher-value engagement, though the login requirement could also lead to user and revenue losses. There have already been product improvements: first-week retention for new app users rose by a double-digit percentage quarter over quarter and by more than 50% year over year; the company is also shifting its US marketing focus toward app installs.
Third-quarter advertising revenue rose 54% year over year to 847 million dollars, with both prices and impressions increasing; the adjusted EBITDA margin was 45%. Revenue grew faster than the 41% increase in adjusted costs and expenses, indicating that profitability was still improving.

Pinterest’s monthly active users reached 661 million in the third quarter, up 10% year over year and 21 million quarter over quarter; revenue, however, was 1.174 billion dollars, up 12% year over year but below company guidance, with growth slowing from 18% in the second quarter.
Of the 6 percentage-point decline in revenue growth, approximately 3 points came from European cross-border sellers reducing ad spending after changes to the EU’s duty exemption policy for low-value goods, approximately 2 points from shifts in the timing of Prime Day and World Cup-related spending, and approximately 1 point from foreign exchange. European revenue was broadly flat year over year, compared with growth of 12% in the second quarter.
Ad impressions rose 17% year over year, while ad prices fell 4%; in the second quarter, the two measures rose 16% and 1%, respectively. Bernstein believes the price decline may be related to changes in the geographic and advertiser mix, including pressure on spending by European cross-border sellers.

Pinterest guided for fourth-quarter revenue growth of 8%–12% year over year, with its international business still affected by pressure on cross-border sellers; full-year adjusted EBITDA margin guidance remained at approximately 30%. Bernstein believes near-term growth improvement depends on a recovery in international operations and renewed acceleration in the US and Canadian markets, while integration with third-party ad demand platforms could make a more meaningful contribution in 2027.
Bernstein maintained its Outperform rating on Pinterest and cut its price target from 28 dollars to 22 dollars: the firm believes its forward enterprise value-to-EBITDA multiple is at a five-year low and continued growth in user engagement could provide upside.
Bernstein maintained its Market Perform rating on Reddit, cut its price target from 180 dollars to 120 dollars, and lowered its revenue and daily active user forecasts for the fourth quarter and beyond; at the same time, given operating leverage and the performance of profitability guidance, the firm raised its adjusted EBITDA margin forecast.