Low earnings
Pinterest reported Q4 revenue of $1.32 billion, slightly below the $1.33 billion expected by analysts. Net income fell sharply from $1.85 billion a year ago to $277 million, an 85% decline. Adjusted EBITDA came to $541.5 million, just under analyst expectations of $550 million. Q1 revenue guidance of $951 million to $971 million also trailed forecasts of $980 million. Investors reacted strongly, sending the stock down more than 20% in early trading.
CEO and analysts' say
CEO Bill Ready said tariffs increased costs for major retail advertisers, prompting them to reduce marketing budgets on Pinterest. This hit revenue more than some competitors who have less exposure to large retailers. Analysts at Citi and Goldman Sachs warned that ad spending could remain weak in the near term as consumer demand softens and tariffs continue.
Investment in AI
In January, Pinterest announced plans to reduce its workforce by less than 15% and cut office space. The company is redirecting resources toward AI and automation. Investments focus on better ad targeting, automated tools for advertisers, and improved content discovery for users. While these changes may pressure margins in the short term, management expects them to help attract more small and mid-sized advertisers and diversify revenue away from large retailers.
Active users
Despite weak earnings, Pinterest saw its global monthly active users rise to 619 million, a 12% increase from a year ago. Growth was strong among GenZ users, an important group for advertising in fashion, beauty, and home decor. While higher user numbers provide a base for future revenue, management said converting user growth into more income per user is still a challenge.
