Pinterest Tumbles After Earnings Miss—What It Says About the Digital Ad Market

Pinterest (PINS) shares tumbled over 9% Friday after the social media company reported revenue that missed estimates, and gave a weaker-than-expected forecast.

Pinterest said its fourth-quarter revenue rose 12% from a year ago to $981 million, but that was below estimates. For the full year, revenue was up 9% to $3.06 billion, though Pinterest still posted a net loss of $35.6 million for the year. Europe was a bright spot in the fourth quarter, with revenue up 32%.

Pinterest’s Global Monthly Active Users (MAUs) grew 11% to 498 million, but the company issued a weaker-than-expected guidance, with first-quarter revenue expectations of $690 million to $705 million.

Strong earnings from heavyweights like Amazon (AMZN) and Meta (META) may point to some improvement in the digital ad market, but results from Pinterest could suggest smaller firms might have a tougher time capturing some of the gains.

However, JPMorgan analysts said they anticipate a strong 2024 for Pinterest, citing new partnerships with Google and Amazon, growth in regions outside the U.S., and investments in new products on the Pinterest platform.

On Pinterest’s earnings call, CEO Bill Ready said that Pinterest is “under-monetized internationally,” with 80% of its users outside the U.S., though they only account for 20% of its revenue.

Analysts at Jeffries were bullish on Pinterest, saying the “fastest rev growth rates are still ahead.”

Shares of Pinterest closed 9.4% lower at $36.87 per share Friday. They’ve gained about 48% over the past year.