Pinterest reported disappointing revenue while reporting its fourth-quarter results. Although the company beat earnings estimates, it also issued a weak forecast, leading to a crash in its share price. The stock partly recovered after the company revealed a new partnership with Google.
Pinterest reported a global average revenue per user of $2, lower than analysts’ estimate of $2.05. The company also gave a weaker-than-expected first-quarter revenue outlook between $690 million and $705 million, averaging $697.5 million. Analysts had expected an average estimate of $703 million.
The company reported an increase in global monthly active users year over year. Pinterest saw an 11 percent increase in active users to 498 million by the end of 2023.
After the release of these results, Pinterest stock fell as much as 28 percent and reached an after-hours low of $29.40 per share. Earlier, Pinterest shares had increased 9.5 percent in 2024 and had seen a 53 percent surge in 2023.
Pinterest CEO Bill Ready made a favorable announcement of a partnership with Google during a call with analysts. It already has an advertising partnership with Amazon. Pinterest stock rebounded to $37.82 per share. This changed the decline in share price to almost 10 percent.
Ready said that its partnership with Google would help it “monetize” non-US “markets,” as these international markets have been under-monetized.
The CEO said that the integration with Google had gone “live a couple of weeks ago,” and this could help in its first-quarter results as well as subsequent quarters,
The digital advertising market is seeing a recovery as significant companies such as Meta, Alphabet, and Amazon reported double-digit growth in ad units in the fourth quarter. This increase in spending has missed some companies, including Snap, that saw single-digit sales growth of 5 percent as well as a weak outlook.
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