Pinterest Stock Plummets After Another Disappointing Quarter

Pinterest shares fell sharply Thursday evening, dropping nearly 20% following a fourth-quarter earnings report that failed to meet Wall Street's expectations. The company also provided a first-quarter sales forecast that fell short of analyst projections.

The visual discovery platform reported adjusted earnings of 67 cents per share on revenue of $1.32 billion. Analysts had anticipated 69 cents per share on $1.33 billion in revenue. For the current quarter, Pinterest expects sales between $951 million and $971 million, below the estimated $980 million. This marks the second consecutive quarter where disappointing results have triggered a major sell-off.

While quarterly revenue grew 14% year-over-year and global monthly active users increased to 619 million, net income saw a significant decline. The figure fell to $277 million from $1.85 billion a year earlier, a period which included a substantial tax benefit.

On a conference call, CEO Bill Ready expressed dissatisfaction with the revenue performance, attributing part of the challenge to an "exogenous shock" from recent tariffs that impacted major retail advertisers. He stated the company's near-term outlook for large advertisers remains pressured.

In response, Pinterest plans to intensify its focus on attracting small-to-medium-sized and international advertisers to diversify its revenue base. The company is also continuing a strategic shift, which includes layoffs affecting less than 15% of its workforce announced in January, to reallocate resources toward technical teams building AI products. A recent CNBC report noted internal tension, revealing that staffers who created a tool to analyze the layoffs were dismissed, with Ready calling their actions "obstructionist."

Source: CNBC