Pinterest Reports Disappointing Second Quarter Results

Image sharing and social media service Pinterest reported disappointing results for its second quarter and although the results were short of estimates, the company’s shares were up on impressive user numbers.

For the second quarter, the company reported adjusted earnings of 11 cents per share, just below the estimate of 18 cents per share that analysts had forecasted, according to Refinitiv. Revenue for the quarter came in at $666 million, slightly below the $667 million that analysts had expected, according to Refinitiv.

The company revealed that global monthly active users declined by 5 percent from the same period a year ago to 433 million. Analysts were, however, expecting a steep decline to 431 million.

The company’s results mirror the difficult times that are the reality for social media companies. Companies like Meta, Snap, and Twitter all reported disappointing second-quarter earnings results. The common factor that led to this decline was a declining advertising market.

For the third quarter, Pinterest expects that revenue will grow “mid-single digits on a year-over-year percentage basis.” Analysts, on the other hand, forecast it to increase by 12.7 percent. The company also emphasized in its shareholders’ letter that economic challenges are taking a toll on advertising spending. “The macroeconomic environment has created meaningful uncertainty for our advertiser partners.” Pinterest said it saw “lower than expected demand from U.S. big box retailers and mid-market advertisers, who pulled back ad spend due to concerns about weakening consumer demand.”

The company revealed that its guidance for the third quarter takes into consideration “slightly greater foreign exchange headwinds” compared to the previous quarter.

The company also recently saw a change in leadership. Its CEO Ben Silbermann stepped down and was succeeded by Bill Ready who previously led Google’s commerce unit. The new CEO has a track record working for global companies. While he spent about three years at Google, Bill Ready once held the roles of executive vice president and chief operating officer at PayPal.