Pinterest shares tumble nearly 15% on weak guidance

Pinterest's stock experienced a significant decline of approximately 15% after the company released its second-quarter earnings on Tuesday, which fell short of analyst expectations for third-quarter guidance. The company reported revenue of $854 million, slightly surpassing the anticipated $848 million, marking a 21% increase year-over-year. However, Pinterest's net income was only $9 million, or 1 cent per share, a stark contrast to the $35 million loss, or 5 cents per share, reported in the same quarter last year. Looking ahead, Pinterest forecasts third-quarter sales between $885 million and $900 million, reflecting a year-over-year growth of 16% to 18%. This guidance, however, is below analysts' expectations of approximately $907 million. CEO Bill Ready emphasized the effectiveness of the company's monetization strategies, noting improved advertiser performance across various objectives, aided by the rollout of AI-powered products. The platform reported 522 million global monthly active users (MAUs) for the second quarter, exceeding analyst estimates of 520.1 million. The breakdown of users included 98.4 million in the U.S./Canada, 136.8 million in Europe, and 284.6 million in other regions. Additionally, Pinterest's average revenue per user (ARPU) stood at $1.64, aligning with expectations, while regional ARPU figures were also close to forecasts. CFO Julia Brau Donnelly highlighted the technology, automotive, and financial services sectors as key contributors to the company's online advertising success. Ready noted a stable advertising market compared to the previous quarter, contrasting with Alphabet's recent strong revenue performance of $84.74 billion.