Pinterest (PINS) reported second-quarter earnings that missed analysts’ profit estimates on Thursday, overshadowing strong revenue and user growth and pushing its shares down more than 12% in premarket trading Friday.
The social media platform posted adjusted earnings per share of 33 cents, falling short of the average analyst forecast of 35 cents, according to data compiled by LSEG.
Despite the profit miss, quarterly revenue rose 17% year-over-year to $998.2 million, beating expectations of $974.8 million. Pinterest’s stock has gained roughly 35% so far this year.
The company’s growth was driven by a surge in Gen Z users, who now make up over half of Pinterest’s user base, along with increased adoption of its AI-powered advertising platform, Performance+. This tool has attracted advertisers seeking more personalized and automated campaigns.
CEO Bill Ready highlighted the accelerating adoption of Performance+ among mid-market advertisers, noting it “cuts campaign creation time in half.”
Looking ahead, Pinterest forecast third-quarter revenue between $1.03 billion and $1.05 billion, broadly in line with analyst estimates of $1.03 billion.
eMarketer analyst Jeremy Goldman commented, “The revenue growth outlook is strong but not accelerating from second quarter’s 17%. In a high-expectation environment, even a small gap between reality and euphoria can trigger a sell-the-news reaction.”
Last week, competitors Meta and Reddit posted strong Q2 performances, while Snap reported its slowest quarterly revenue growth in over a year.
A recent policy change ending the “de minimis” exemption—a U.S. duty-free import provision—contributed to tighter ad budgets on smaller platforms like Snap, as marketers favored larger platforms with wider reach.
Pinterest CFO Julia Donnelly said this change led Asia-based e-commerce retailers to cut U.S. ad spending, although some shifted budgets to Europe and other international markets.
The company’s ad pricing declined 25% year-over-year, reflecting a growing share of impressions from international markets where ad rates tend to be lower than in the U.S.
Pinterest maintains third-party advertising partnerships with Google, Amazon.com, and Magnite.
The platform’s global monthly active users (MAUs) increased 11% year-over-year to 578 million, surpassing estimates of 553 million. However, user growth slowed to 8 million new additions in Q2 from 17 million in Q1.
Zephirin Group analyst Lenny Zephirin observed, “MAUs are approaching a ceiling level of maturity, and the market is maturing rapidly despite the incremental implementation of AI to drive user growth.”
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