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Pinterest shares jumped to better-than-expected user numbers even as earnings, revenue and estimates were not estimated and the company gave poor guidance for the third quarter.
Activist investor Elliot Management separately confirmed Pinterest’s largest investor and said he was “convinced by the value-creating opportunity” in the company.
Here’s how the company did.
- earnings: 11 adjusted cents a share versus an expected 18 cents a share, according to Refinitiv.
- he won: $666 million versus the projected $667 million, according to Refinitiv.
Pinterest said the number of global monthly active users was down 5% from the previous year to 433 million. While that kind of decline is alarming for a social media app that relies on eyeballs to attract advertisers, analysts had been expecting a sharp drop to 431 million.
The company’s financials were bleak, following a trend in the social media market. Meta, Twitter and Snap, the parent company of Facebook, reported second-quarter earnings that missed up and down, all attributing the weak online advertising market to their grim results.
Pinterest’s comment was more concerning than second-quarter results about what to expect this quarter. The company said it estimates third-quarter revenue will grow “in average single digits on a year-over-year percentage basis,” below analysts’ forecasts of 12.7% sales growth.
In a letter to investors, Pinterest said economic challenges are driving marketers to shrink in spending.
“The macroeconomic environment has created significant uncertainty for our advertising partners,” Pinterest said in the letter. The company said it saw “less-than-expected demand from big box retailers in the US and mid-market advertisers, who pulled back on ad spending due to concerns about weakening consumer demand.”
Pinterest said its guidance for the third quarter takes into account “slightly larger headwinds in foreign exchange rates” compared to the previous quarter.
In June, Pinterest co-founder Ben Silberman resigned as the company’s CEO, and was replaced by Bill Reddy, formerly Google’s commerce unit leader. Pinterest’s designation of Ready signaled a deeper rush into e-commerce and online retail.
Elliott’s involvement with the company was reported in July by The Wall Street Journal, which said at the time that the company had built a more than 9% stake in the company. Following the release of Pinterest’s results on Monday, Elliott confirmed that she is the company’s largest shareholder and said she is pleased with Ready’s progress.
“As the market-leading platform at the intersection of social media, search and commerce, Pinterest is uniquely positioned in the advertising and shopping ecosystem, and CEO Bill Reddy is the right leader to oversee the next phase of Pinterest’s growth,” said Elliott. a permit.
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