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

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 was last down about 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 Z users.

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,
-0.40%
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,
+0.09%,
 Alphabet Inc.’s 
GOOGL,
+0.25%

GOOG,
+0.37%
Google and Snap Inc. 
SNAP,
-2.72%.
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%.