Pinterest provided a cautious revenue forecast for the third quarter, signaling an easing of growth momentum as competition for digital advertising intensifies. The image-sharing platform projected current-quarter revenue of $1.19 billion to $1.21 billion, equal to growth of roughly 13% to 15% versus the prior year - a deceleration from the 18% growth recorded in the second quarter.
The company’s guidance sits close to the analysts’ consensus of $1.20 billion compiled by LSEG, but the outlook prompted investor concern and Pinterest’s shares fell about 9% in after-hours trading.
Pinterest has been promoting Performance+, its suite of AI-driven advertising tools designed to help marketers optimize and scale campaigns with less manual intervention. The company maintains that these functions can make ad buying more efficient for advertisers, but management acknowledged that competitive advances elsewhere are tightening the market.
On the post-earnings call, CFO Julia Donnelly noted the company experienced "incremental pressure mid-quarter from Asia-based cross-border retailers impacted by regulatory actions particularly in Europe and that pressure is continuing in the third quarter." That operational headwind is reflected in the more moderate revenue target for the current quarter.
Industry moves by larger technology firms were highlighted as a key factor in the competitive landscape. Meta is improving its Advantage+ ad automation tools, Reddit introduced a similar product, and OpenAI is placing greater emphasis on advertising. Separately, Google updated Google Images with AI-powered personalized feeds and visual discovery features, changes that resemble some of Pinterest’s offerings and indicate a broader push toward AI-enabled search and shopping experiences.
Even as Pinterest expands its ad technology, some analysts see the company’s AI tools as promising but not yet achieving the traction of competitors. Emarketer analyst Marisa Jones said, "Its AI tools have shown early promise, but they haven’t generated the same level of enthusiasm as competitors’ offerings." The comment underscores the challenge of converting early product development into sustained advertiser demand.
For the second quarter ended June 30, Pinterest reported revenue of $1.18 billion, topping consensus estimates of $1.15 billion. The company also disclosed that global monthly active users rose 11% year over year to 640 million, while average revenue per user increased 7% to $1.86.
Earlier this year Pinterest completed its acquisition of tvScientific, a strategic move intended to give advertisers access to connected television placements and to broaden the company’s addressable ad budgets beyond social channels.
Context and implications
- Pinterest’s near-term revenue path will be driven by how effectively its AI advertising products convert into higher ad spend from marketers.
- Competitive enhancements from larger platforms and regulatory impacts on certain advertiser segments are key immediate influences on demand.