Pinterest’s shares fell 20% following its third-quarter earnings report that showed a miss on profit expectations and a cautious revenue forecast.
Despite growing its user base to 600 million monthly active users, beating the predicted 590 million, the company’s earnings per share of 38 cents fell short of the 42 cents expected.
Revenue matched estimates at $1.05 billion, with U.S. and Canada sales slightly below forecasts.
The company’s adjusted EBITDA was stronger than anticipated, reflecting some operational strength.
The weak guidance for the fourth quarter, with projected revenue between $1.31 billion and $1.34 billion, missed Wall Street’s midpoint forecast by a small margin.
A key reason for this is the moderated ad spending in the U.S. and Canada, partly due to large retailers impacted by new tariffs on home furnishing imports.
This adds pressure amid an already cautious advertising market.
Looking ahead, Pinterest faces challenges competing with tech giants like Meta and Alphabet, which reported robust earnings fueled by digital ad growth and investments in AI.
While Pinterest is developing AI-powered shopping features to stay relevant, the near-term risks from tariff effects and uneven ad spending cloud its growth potential.
Investors appear concerned that Pinterest’s slower sales growth and cautious outlook will limit upside in the short term.
However, the company’s innovation in AI and its expanding global user base could support recovery if ad spending stabilizes.
For now, patience will be needed as Pinterest adjusts to these market headwinds.
