Pinterest shares fell 7% in after-hours trading following the company’s second-quarter earnings announcement. The social media platform reported revenue increases and user growth that exceeded analyst projections, yet investors reacted negatively to its forward guidance for the upcoming quarter.
The company generated sales of $998.2 million, representing an 18% year-over-year increase. However, Pinterest posted a net loss of $47 million, or 8 cents per share, during the period, compared with net income of 38.76 million, or 6 cents per share, in the prior year. Adjusted earnings of $311 million surpassed analyst expectations of $270 million. For the third quarter, the company projected revenue between $1.19 billion and $1.21 billion, with the midpoint aligning with consensus estimates. Management attributed the cautious guidance partly to anticipated foreign exchange headwinds based on current rates.
Pinterest’s finance chief Julia Donnelly cited specific factors weighing on third-quarter prospects during the earnings call. The relocation of Amazon Prime Day from the third quarter to the second quarter this year was expected to create approximately a half-percentage-point headwind. Additionally, World Cup-related advertising spending that benefited the second quarter would not repeat, representing nearly a one-percentage-point impact. These timing shifts influenced brand and retailer spending patterns, management explained.
On the positive side, the platform added users at a robust pace, with global monthly active users reaching 640 million, up 11% year-over-year and exceeding estimates of 635 million. Global average revenue per user reached $1.86, ahead of projections. CEO Bill Ready highlighted the company’s strategy of utilizing open-weight artificial intelligence models alongside proprietary systems to manage costs while scaling AI capabilities. Management indicated AI-related spending would continue growing as adoption expanded, though such investments were generating positive returns and had been factored into the company’s financial outlook.
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