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Pinterest’s shares dropped approximately 15% on Tuesday after the company reported its second-quarter earnings and provided a third-quarter revenue forecast that fell short of analyst expectations.
Key Financials:
- Revenue: Pinterest reported $854 million, surpassing the $848 million forecast.
- Earnings per Share (EPS): Adjusted EPS was 29 cents, slightly above the 28 cents expected.
- Year-over-Year Growth: Revenue increased by 21% from the previous year. Quarterly net income was $9 million, or 1 cent per share, compared to a net loss of $35 million, or 5 cents per share, in the same period last year.
Guidance and Analyst Reactions:
- Q3 Revenue Forecast: Pinterest expects third-quarter revenue to range from $885 million to $900 million, reflecting 16% to 18% year-over-year growth. Analysts had projected approximately $907 million.
- Monthly Active Users (MAU): The company reported 522 million global MAUs for the second quarter, exceeding the 520.1 million forecast. Regional breakdowns included 98 million for the U.S./Canada, 136 million for Europe, and 288 million for the rest of the world.
- Average Revenue Per User (ARPU): Global ARPU was $1.64, consistent with expectations. Regional ARPU figures were $6.85 for the U.S./Canada, $1.03 for Europe, and 13 cents for the rest of the world, slightly varying from analyst estimates.
Sector Performance and Market Trends:
- Strengths: Pinterest’s advertising performance was robust in technology, autos, and financial services sectors.
- Weaknesses: The food and beverage sector showed softness, impacted by broader industry challenges.
- Market Conditions: CEO Bill Ready noted stability in the ad market compared to the previous quarter.
Comparative Context:
- Alphabet’s Performance: Last week, Alphabet reported second-quarter revenue of $84.74 billion, exceeding expectations, though YouTube advertising sales of $8.66 billion were below forecasts.
- Upcoming Reports: Meta is scheduled to report its second-quarter earnings on Wednesday, and Snap will follow on Thursday.