Pinterest’s shares dropped nearly 15% following its second-quarter earnings report, which, while surpassing expectations on both revenue and earnings per share, was overshadowed by disappointing third-quarter revenue guidance.
The social media company reported second-quarter revenue of $854 million, exceeding the forecast of $848 million. Adjusted earnings per share were 29 cents, surpassing analyst expectations of 28 cents. This marked a significant turnaround from a net loss of $35 million or 5 cents per share in the same quarter last year. Total revenue for the quarter jumped 21% year-over-year, while net income was $9 million, or 1 cent per share.
Pinterest’s global monthly active users (MAUs) reached 522 million for the second quarter, slightly ahead of analyst estimates of 520.1 million. The company’s revenue per user (ARPU) stood at $1.64, aligning with expectations. ARPU was broken down regionally as $6.85 in the U.S./Canada, $1.03 in Europe, and 13 cents in the rest of the world, which was in line with or slightly below analyst forecasts.
For the third quarter, Pinterest projected revenue between $885 million and $900 million, representing a year-over-year growth of 16% to 18%. However, this forecast fell short of the $907 million analysts had anticipated. The company’s cautious outlook prompted a sharp decline in its stock price.
CEO Bill Ready highlighted the success of Pinterest’s monetization strategies, noting improved performance in advertising across key metrics, thanks to the introduction of AI-powered products and experiences. Despite this, CFO Julia Brau Donnelly pointed to sector-specific weaknesses, particularly within food and beverage advertising, which tempered overall growth.
The broader advertising market remains stable, according to Ready, who cited technology, autos, and financial services as strong areas for Pinterest.
In comparison, Alphabet’s recent earnings report showed a slight miss in YouTube advertising sales, while Meta and Snap are expected to release their latest quarterly financials soon.
For more insights on Pinterest’s performance and the tech industry, stay tuned as Meta and Snap unveil their earnings in the coming days.
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