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Pinterest Forecasts Slower Revenue Growth Amid Fierce Ad Competition
Pinterest (PINS) projected a slowdown in its revenue growth for the third quarter, signaling that intensifying competition for digital advertising dollars from major technology rivals is weighing on its outlook. The company's shares fell approximately 6% in extended trading following the announcement on Tuesday.
Guidance Signals Deceleration
The image-sharing platform forecast current-quarter revenue to be in the range of $1.19 billion to $1.21 billion. This represents year-over-year growth of 13% to 15%, a notable deceleration from the 18% growth rate the company reported for its second quarter. The midpoint of the guidance is in line with the average analyst estimate of $1.20 billion, according to data compiled by LSEG.
Competitive Pressures Mount
The cautious forecast reflects a challenging digital advertising landscape where larger players are leveraging artificial intelligence to attract marketing budgets. Pinterest is facing heightened competition from Meta's Instagram and its Advantage+ ad automation tools, as well as from Google, which recently updated its Images product with AI-powered features resembling Pinterest's visual discovery platform.
In response, Pinterest is expanding its own AI-powered ad suite, Performance+, to help marketers optimize campaigns. "AI is at the heart of our momentum and is a clear accelerant for our business," CEO Bill Ready said in a statement. The company also recently acquired tvScientific to expand its advertisers' reach into the connected TV market.
AdSecond-Quarter Performance
Despite the weaker forward guidance, Pinterest's results for the second quarter surpassed Wall Street expectations. The company reported strong user growth and revenue that beat estimates.
Key figures for the three months ended June 30 include:
- Revenue: $1.18 billion, compared to estimates of $1.15 billion.
- Global Monthly Active Users: Rose 11% year-over-year to 640 million.
- Average Revenue Per User: Increased 7% to $1.86.
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