Pinterest reported second-quarter revenue of $1.18 billion on Tuesday, surpassing analyst estimates of $1.15 billion, according to Benzinga Pro. The company’s adjusted earnings were 43 cents per share, exceeding expectations of 36 cents. Revenue increased 18% year-over-year, driven by an 11% rise in global monthly active users to 640 million.
Key Details
Despite these positive results, Pinterest forecasts slower revenue growth for the third quarter. The company expects revenue to fall between $1.19 billion and $1.21 billion, which reflects a growth rate of 13% to 15%, compared to analysts' average estimate of $1.20 billion. This anticipated growth is a decline from the 18% increase reported in the second quarter. CFO Julia Donnelly noted that the company faced pressure from Asia-based cross-border retailers affected by regulatory actions in Europe, a trend expected to persist into the next quarter.
Background
Pinterest has been enhancing its advertising capabilities through its AI-powered Performance+ suite. However, competition in the digital advertising space is intensifying, particularly from larger players like Meta and Google. According to Emarketer analyst Marisa Jones, while Pinterest's AI tools show promise, they have not generated the same level of excitement as those from competitors. CEO Bill Ready emphasized that AI is crucial for the company’s growth, stating, "AI is at the heart of our momentum and is a clear accelerant for our business."
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Pinterest's forecast for slower growth could affect investor sentiment, particularly in the tech and digital advertising sectors. Shares fell approximately 7.74% in after-hours trading, indicating market concern over the company's growth trajectory. Investors will watch for further developments in advertising competition and the company's performance in the upcoming quarters.
Watch for Pinterest's next earnings report, scheduled for November, which will provide further insights into its revenue trends and competitive positioning.
Based on reporting by: businesstimes.com.sg, benzinga.com