Pinterest's stock takes a hit after revenue miss, middling guidance

By Jon Swartz

Pinterest Inc.'s stock fell in volatile after-hours trading Thursday after the company reported a revenue miss and offered ho-hum guidance.

Pinterest (PINS) reported fiscal fourth-quarter net income of $201.2 million, or 29 cents a share, compared with net income of $17.5 million, or 3 cents a share, in the year-ago quarter. Adjusted earnings were 53 cents a share.

Revenue improved 12% to $981.3 million, from $877.2 million a year ago.

Analysts surveyed by FactSet had expected, on average, net earnings of 52 cents a share on revenue of $991 million.

Shares initially plunged about 23% immediately after the report was released, then swung to a slight gain. The stock finished the after-hours session down 9%.

"We had a strong Q4, bookending a transformative year for Pinterest," Pinterest Chief Executive Bill Ready said in a statement announcing the numbers. Global monthly active users rose 11% to an all-time high of 498 million year over year, thanks in large part to Gen Zers.

In a conference call with analysts late Thursday, Reedy said the company is working on an AI-based automated advertising system. He added Google will join Pinterest as a third-party ad-integration partner. Amazon.com Inc. (AMZN) has already teamed with Pinterest.

Pinterest projects first-quarter revenue of between $690 million and $705 million. FactSet analysts expect $702 million in first-quarter revenue.

Pinterest Chief Financial Officer Julia Brau Donnelly noted a dip in food and beverage advertising during the fourth quarter, but said Q1 is "off to a good start."

Ad spending played a big role in the earnings report as they did for Facebook parent Meta Platforms Inc. (META), Alphabet Inc.'s (GOOGL) (GOOG) Google and Snap Inc. (SNAP). Meta and Google reported major strides in ad revenue, creating a difficult comparison for Pinterest and others, say analysts.

"Pinterest's solid but unspectacular Q4 numbers should see some scrutiny from the market, which saw Meta blow out expectations just last week," Insider Intelligence principal analyst Jeremy Goldman said in an email message.

Shares of Pinterest have surged 64% over the last year, while the broader S&P 500 index SPX has increased 22%.

-Jon Swartz

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02-08-24 2009ET

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