Pinterest Shares Fall After Q3 Revenue Miss And Outlook

Pinterest Reports Revenue Miss and Falling Ad Pricing as Q3 Sales Rise to $1.17 Billion

Pinterest CEO Bill Ready stated that the company is “not happy with that result” after reporting third-quarter revenue that fell below expectations. Pinterest stock tumbled over 7% in overnight trading ahead of Friday as the company recorded $1.17 billion in sales for the quarter, missing analysts’ estimates of $1.21 billion.

The Tech TL;DR:
• Pinterest missed Q3 revenue targets with $1.17 billion against an expected $1.21 billion, pushing shares down over 7% in overnight trading.
• The company blamed a six-percentage-point sequential growth slowdown on EU regulatory changes hitting cross-border sellers alongside Prime Day and World Cup timing shifts.
• Retail investor sentiment flipped from bearish to bullish on Stocktwits despite the stock being down 23% year to date.

Cross-Border Spending Declines Following EU Regulatory Changes

Pinterest attributed the revenue slowdown to a pullback in spending by cross-border sellers. This shift followed European Union regulatory changes regarding the de minimis exemption. Ad impressions rose 17% during the quarter, but ad pricing fell 4% overall.

“Approximately 2 points reflected the timing of Prime Day and World Cup-related spend that we called out last quarter. The remaining point reflected foreign exchange, which added 1 point to Q2 growth and was neutral in Q3,” Ready said on the analyst call.

Pinterest Forecasts Fourth-Quarter Revenue Below Analyst Expectations

Pinterest forecast fourth-quarter revenue in a range of $1.425 billion to $1.475 billion. This projection represents growth of 8% to 12%, but falls below the analyst expectation of $1.52 billion.

“Overall, Q3 revenue came in below our range. We are not happy with that result, and we have clear plans in place to accelerate our revenue diversification efforts,” Ready said.

Retail Investor Sentiment Flips to Bullish on Stocktwits

Despite the post-earnings stock drop, retail sentiment for PINS on Stocktwits flipped from bearish to bullish. Several traders expressed optimism about a near-term bounce and upcoming efficiency drivers under the company’s new CFO.

“$PINS traded this stock for years, it does the same thing every earnings, drops 20 percent ramps 10 percent then goes flat in the AM then the following week drops 5 percent finds its way back to 19 every time,” a trader wrote on Stocktwits.

Another user noted user growth alongside the recent financial metrics: “$PINS I bought more. At $22 I unloaded a third of my position and now, buying right back in. Earnings was not bad at all. Users grew by 60 million. Revenue by 12% and with the new CFO, they are going to drive efficiencies. This will be back into the $21 range by New Years.”

Year to date, Pinterest stock remains down 23% following the broader market pressures that also impacted Alphabet’s advertising growth.