Pinterest Inc. experienced a drastic drop in stock price during after-hours trading after reporting disappointing revenue figures and providing lackluster guidance. The company’s fiscal fourth-quarter net income stood at $201.2 million, or 29 cents a share, compared to $17.5 million, or 3 cents a share, in the same quarter the previous year. However, adjusted earnings were 53 cents a share.
Despite a 12% increase in revenue to $981.3 million from $877.2 million the previous year, Pinterest fell short of analyst expectations. Experts had predicted net earnings of 52 cents a share on revenue of $991 million. As a result, shares initially plummeted by 23% upon the release of the report, although they later rebounded slightly. Ultimately, the stock ended the after-hours session down 9%.
Pinterest CEO Bill Ready expressed satisfaction with the fourth-quarter performance, highlighting the growth of global monthly active users to 498 million, particularly among Gen Z users. The company has also been working on developing an AI-based automated advertising system and has partnered with Google as a third-party ad-integration partner. Additionally, Pinterest is already collaborating with Amazon.com on advertising initiatives.
For the first quarter, Pinterest projects revenue of $690 million to $705 million. However, analysts expect slightly higher figures at $702 million. Pinterest CFO Julia Brau Donnelly noted the decline in food and beverage advertising during the fourth quarter but expressed optimism about a strong start to the first quarter.
Analysts compared Pinterest’s earnings report to that of Meta Platforms, Google, and Snap, which have all witnessed significant growth in ad revenue. Despite the drop in stock price, Pinterest’s shares have experienced a remarkable 64% increase in the past year, outperforming the broader S&P 500 index.
Overall, while Pinterest’s revenue figures and guidance fell short of expectations, the company remains focused on expanding its user base and developing innovative advertising solutions for future growth.
“Social media scholar. Reader. Zombieaholic. Hardcore music maven. Web fanatic. Coffee practitioner. Explorer.”