PINTEREST forecast current-quarter revenue below Wall Street expectations on Tuesday (Jul 30) as the image-sharing platform faces tough competition in a stabilising digital advertising market, sending its shares down about 12 per cent after hours.
The company, whose shares shed about US$3 billion in value, competes with the likes of TikTok and Meta Platforms-owned Facebook and Instagram – the preferred platforms for advertisers because of their larger user base and higher engagement for targeted ads.
“After results from both PINS and GOOGL, we believe that digital ad spend remains healthy but tougher comparisons are causing trends to decelerate at a faster pace than expected. Still, we think the pullback in shares provides an enhanced opportunity,” said Angelo Zino, senior equity analyst at CFRA Research.
Pinterest has also launched ad partnerships with e-commerce giant Amazon.com and Alphabet’s Google, while unveiling an automated ad campaign setup tool and Pinterest Performance+, an AI-powered tool for marketers.
The company expects revenue in the range of US$885 million to US$900 million for the third quarter, compared with analysts’ expectations of US$906.6 million, according to LSEG data.
“Our revenue guidance reflects further progress against our strategic initiatives, including continued lower funnel strength and the ongoing emerging contribution from third-party demand partnerships,” CFO Julia Donnelly said.
Revenue for the second quarter ended Jun 30 rose 21 per cent to US$853.7 million, higher than estimates of US$847.8 million.
Pinterest’s global monthly active users rose by 12 per cent to 522 million in the second quarter, compared with estimates of 519.2 million.
Excluding items, Pinterest posted a profit of 29 US cents per share, compared with estimates of 28 US cents. REUTERS
