By Jaspreet Singh
(Reuters) -Pinterest forecast fourth-quarter revenue slightly below Wall Street estimates on Tuesday, signaling fierce competition from larger platforms such as Meta during the holiday season, sending its shares down over 20% in extended trading.
The company expects quarterly revenue between $1.31 billion and $1.34 billion, with the midpoint below analysts’ average estimate of $1.34 billion, according to LSEG-compiled data.
“We did face pockets of moderating ad spend in U.S. and Canada in the third-quarter, as larger U.S. retailers navigate tariff-related margin pressure in the current environment,” CFO Julia Donnelly said.
Pinterest’s results follow reports from digital ad bellwethers, including Google-parent Alphabet, Meta and Reddit, which posted upbeat third-quarter revenue on robust ad spending.
Large platforms such as TikTok and Meta’s Instagram and Facebook remain the top choices for marketers, thanks to their massive user bases and artificial intelligence tools for campaign creation.
Pinterest said it continued to see lower spending by Asia-based e-commerce retailers in the U.S. in the third-quarter, following the termination of the “de minimis” exemption. However, it observed a “partial recovery” from the prior quarter.
The end of the U.S. duty-free import provision for low-value shipments from China and Hong Kong has prompted some Chinese retailers, such as Temu and Shein, to adjust their marketing budgets.
Pinterest’s global monthly active users are steadily rising, with the company hitting an all-time high of 600 million in the third quarter.
“The challenge now is proving that those new users can monetize at the same rate as North American audiences, which is going to be difficult and realistically, take time,” said Jeremy Goldman, senior director of briefings at Emarketer.
Revenue rose 17% to $1.05 billion in the third quarter, marking its return to the billion-dollar revenue level first attained in the holiday quarter of 2024.
Adjusted profit per share came in at 38 cents for the quarter ended September 30, missing estimates of 42 cents.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Tasim Zahid)
