Pinterest Shares Plunge After Weak Q4 Revenue Guidance

PALO ALTO, Calif. — Pinterest’s stock fell sharply on Tuesday, dropping as much as 15% after the company released its third-quarter financial results that missed analysts’ earnings expectations and offered disappointing guidance for the upcoming quarter.

For the third quarter, Pinterest reported revenue of $1.05 billion, marking a 17% increase from a year earlier. However, the adjusted earnings per share were 38 cents, falling short of analysts’ estimates of 42 cents, leading to a drop in stock value during extended trading.

The company anticipates fourth-quarter revenue to range between $1.31 billion and $1.34 billion. The midpoint of this forecast at $1.325 billion is below Wall Street’s projection of $1.34 billion, signaling potential challenges ahead as the holiday shopping season approaches.

Pinterest also reported a net income of $92.11 million for the quarter, which is a significant rise of 201% from $30.56 million in the same period last year. Despite the increase in profitability, investors reacted poorly to the guidance, illustrating their concern about the increasingly competitive landscape, particularly from larger platforms like Meta.

The platform saw its user base grow to an all-time high of 600 million global monthly active users in Q3, surpassing earlier expectations of 590 million. However, average revenue per user was reported at $1.78, slightly lower than the anticipated $1.79.

“To remain competitive, we are making significant investments in AI and product innovation,” said CEO Bill Ready. “We are aiming to transform our platform into an AI-powered shopping assistant for millions of consumers.”

In contrast, competitors like Meta and Alphabet reported strong revenue growth, highlighting their advantages in digital advertising based on larger user bases and advanced AI tools. Meta reported record third-quarter revenue, while Alphabet’s YouTube unit experienced a 15% revenue increase, further intensifying the competition for ad dollars.

Investors will be closely watching how Pinterest navigates the holiday season and whether it can meet its revised revenue targets, as the company strives to keep pace with its more dominant rivals.