Pinterest Q3 Earnings: AI Investments Drive Growth Amid Mixed Financial Results

Pinterest Q3 Earnings: Revenue Beat, EPS Miss, Soft Guidance, AI Investments Paying Off And More - Pinterest (NYSE:PINS)

The company reports third-quarter earnings of 4 cents per share, missing analyst estimates of 7 cents per share, Pinterest Inc PINS reported financial results for the third quarter after the market close on Thursday. Here's a look at the key details from the quarter. Q3 Earnings: Pinterest reported third-quarter revenue of $898 million, beating the consensus estimate of $896.35 million. The idea discovery platform company reported third-quarter earnings of four cents per share, missing analyst estimates of seven cents per share, according to Benzinga Pro. Total revenue was up 18% on a year-over-year basis. Pinterest's global monthly active users increased 11% year-over-year to 537 million. Average revenue per user was $1.70 globally and $7.31 in the U.S. and Canada. "Our AI investments are driving results by powering better-personalized experiences and greater performance for advertisers, with our lower-funnel ad tools being the fastest-growing part of our business," said Bill Ready, CEO of Pinterest. "Advertisers are increasingly relying on Pinterest to engage our growing audience who see us as a great place to find inspiration, curate and shop." See Also: Rivian Q3 Earnings Highlights: Revenue, EPS Miss, CEO Confident In Q4 Gross Profit, R2 Being 'Fundamental Driver' Of Growth Outlook: Pinterest expects fourth-quarter revenue to be in the range of $1.125 billion to $1.145 billion versus estimates of $1.14 billion. The company expects fourth-quarter operating expenses to be in the range of $495 million to $510 million. Management will hold a conference call to further discuss these results at 4:30 p.m. ET. PINS Price Action: Pinterest shares were down 12.17% after hours at $29.80 at the time of publication Thursday, according to Benzinga Pro. Read Next: Roblox Tightens Safety, Bans Preteens from Virtual Social Spaces Photo: Shutterstock. Market News and Data brought to you by Benzinga APIs

Pinterest Stock Slips as Q3 Profits Fall Short

Pinterest (PINS) shares slumped Friday morning after the social media company's third-quarter net income fell short of estimates despite a narrow revenue beat. The company reported $898.37 million in revenue, 18% above last year's third-quarter revenue, but less than $500,000 above what analysts had expected, according to estimates compiled by Visible Alpha. Despite revenue meeting expectations, Pinterest reported $30.56 million in net income, up from 6.7 million the same time last year but below the $49.43 million analysts had projected. "Our AI investments are driving results by powering better personalized experiences and greater performance for advertisers, with our lower-funnel ad tools being the fastest-growing part of our business," Pinterest CEO Bill Ready said. For the fourth quarter, Pinterest projects revenue between $1.125 billion to $1.145 billion, just below the analyst consensus of $1.148 billion heading into Thursday's earnings. JPMorgan analysts said following the earnings that the projected revenue weakness is due to "pressure" facing advertising from the food and beverage industry, which has remained lower over the last several quarters. The analysts, lowering their price target to $35 from $38, said they expect Pinterest's artificial intelligence (AI)-powered advertising features will take several quarters to grow and become widely used by the platform's advertising partners. Pinterest shares were down more than 13% in early morning trading Friday, about 20% below where they started the year.

Pinterest Reports Healthy Q3, Q4 Guidance Disappoints: 6 Analysts Cut Forecasts -- Will AI Tools 'Start To Help' In 2025? - Pinterest (NYSE:PINS)

The company expects AI tools to being boosting results from 1H25. Shares of Pinterest Inc PINS tumbled in early trading on Friday, after the company reported downbeat third-quarter earnings. The company reported its results amid an exciting earnings season. Here are some key analyst takeaways. Piper Sandler analyst Thomas Champion maintained an Overweight rating and reduced the price target from $45 to $41. JPMorgan analyst Doug Anmuth reiterated a Neutral rating and cut the price target from $38 to $35. BofA Securities analyst Justin Post reaffirmed a Buy rating and slashed the price target from $45 to $39. Wedbush analyst Scott Devitt maintained a Neutral rating, but lifted the price target from $37 to $38. Roth Capital Partners analyst Rohit Kulkarni reiterated a Neutral rating and trimmed the price target from $39 to $33. Raymond James analyst Josh Beck reaffirmed an Outperform rating and cut the price target from $40 to $34. Oppenheimer analyst Jason Helfstein maintained an Outperform rating and revised the price from $45 to $40. Benchmark analyst Mark Zgutowicz reiterated a Hold rating on the stock. Check out other analyst stock ratings. Piper Sandler: Pinterest reported third-quarter revenues of $898 million, up 18% year-on-year and around 1% higher than Street expectations, Champion said in a note. He added, however, that the fourth-quarter guidance of 15%-17% represents another deceleration. While EBITDA of $242 million was above estimates, the company's year-on-year margin expansion is slowing, the analyst stated. "Users improved across all geographies, with y/y growth decelerating slightly on a 1% tougher comp," he further wrote. JPMorgan: Pinterest's stock declined in the after-hours trading session as the company's revenue growth guidance "fell shy of investor expectations," Anmuth said. Although Pinterest indicated that macro trends "are mostly stable," but persistent Food & Beverage pressure could weigh on revenue growth into the holiday season, he added. Pinterest launched its Performance+ AI suite, "which provides AI/automation tools across bidding, budgeting, & targeting," which is driving higher cost per action (CPA) and return on ad spend (ROAS), the analyst stated. "We remain Neutral-rated & look for stronger growth & execution to become more constructive," he further wrote. BofA Securities: Although Pinterest's third-quarter revenues were broadly in-line with Street expectations, the performance was disappointing, "given beats at peers," Post said. "While Pinterest's 18% growth was likely above industry, food and beverage category weakness was likely a 4pt headwind, bigger than peers," he added. The company's fourth-quarter revenue guidance of $1,125-$1,145 million represents 15%-17% year-on-year growth but came in slightly below consensus and the high end of the range "suggests 1pts decel. on 1pt tougher y/y comp," the analyst stated. While management expects contribution from AI tools to "start to help" in the first half of 2025, the first-quarter revenue comp "is very difficult," he further wrote. Wedbush: Pinterest reported "healthy" third-quarter results and provided guidance for the fourth quarter that was broadly in-line with estimates, Devitt said. Investors remained concerned about the company's ability to sustain high-teens growth in 2025 against tougher comps, the impact of rising ad loads on user engagement metrics, and continued headwinds from weakness in the food & beverage category, the analyst stated. "We think Pinterest is likely to achieve revenue growth closer to the range of its longer-term target (mid-to-high teens CAGR over the next 3-5 years)," he further wrote. Roth Capital Partners: Pinterest reported a small beat on revenues but missed EBITDA expectations, Kulkarni said. "Mgmt. seemed upbeat about growing bottom-of-funnel ad revs, AI-driven content recommendation, and Performance+ adoption since Oct 1st general availability," he added. In in search results, average ad relevance has more than doubled over the past two years, and search accounts for two-thirds of Pinterest's business, the analyst stated. "Pinterest is leveraging AI to flex up ad load during moments of high intent, allowing ad load and engagement to grow in tandem," he further wrote. Raymond James: Pinterest's performance in the third quarter showed "signs of progress against key initiatives" related to artificial intelligent and deep learning as well as improving engagement, Beck said. He added, however, that the visibility into shopping ad gains and recovery in the Food & Beverage category remain "somewhat limited." The company's fourth-quarter guidance fell short of expectations and was below 2023 seasonality, possibly due to "a full quarter of ongoing F&B headwinds," the analyst stated. "We had previewed a mixed setup for PINS flagging a decel in F&B sales projections, but didn't necessarily expect the headwinds (trade-down, promos, inflation) to persist," he further wrote. Oppenheimer: While growth in Pinterest's monthly average users (MAUs) in North America remained flat at 3%, that in Europe decelerated to 9% from 10% in the second quarter, Helfstein said. This was the fourth consecutive quarter where outbound clicks to advertisers grew by 2x year-on-year, he added. Advertisers using Performance+ (AI product suite) are seeing 20% average improvement in cost per action, the analyst stated. He expects revenue growth to decelerate to 10% year-over-year in the first quarter of 2025, but to ramp through the year. Benchmark: Management indicated continued weakness in the Food and Beverage vertical and "suggested a more deliberate rollout and subsequent uptake of Performance+ beginning in '25E," Zgutowicz said. Pinterest also expects new budget spend to be limited for products like Performance+ during the holiday period, he added. "Continued expanding 3P ad supply dynamics kept impression growth (+41% y/y) elevated and pricing (-17% y/y) decelerating in 3Q, a trendline we expect to continue the next few quarters," the analyst wrote. Although Pinterest's MAU continues to increase, excessive ad load could soon begin negatively impacting engagement, he further stated. Price Action: Shares of Pinterest had declined by 16.27% to $28.62 at the time of publication on Friday. Read More: Pinterest: Time to Jump Onboard for Long-Term Gains? 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Pinterest beats quarterly estimates on digital ads boost

(Reuters) - Pinterest beat Wall Street estimates for third-quarter revenue and profit on Thursday, thanks to robust advertising spending on the platform driven by the image-sharing platform's AI investments. Advertisers turn to the California-based company to target its growing base of Gen Z users and leverage its AI-powered ad tools in a bid to spur shopping activity. The company's results follow quarterly reports by digital ad bellwethers - including Google-parent Alphabet, Meta Platforms, Reddit and Snap - which posted upbeat third quarter revenue, helped by robust ad spending. Pinterest released Performance+ suite in October to better target users by enhancing ad campaigns with new AI tools and automation features on the platform. "Our AI investments are driving results by powering better personalized experiences and greater performance for advertisers, with our lower-funnel ad tools being the fastest-growing part of our business," CEO Bill Ready said in a statement. Third party ad deals with Google and Amazon.com have also been helping in boosting Pinterest's revenue. The company's revenue grew 18% to $898.4 million in the reported quarter, compared with analysts' average estimate of $896.4 million, according to data compiled by LSEG. Adjusted profit per share for the quarter came in at 40 cents, compared with estimates of 34 cents. Global monthly active users on the platform rose 11% to 537 million in the July-to-September period, compared with estimates of 531.5 million. Pinterest forecast fourth-quarter revenue between $1.13 billion and $1.15 billion, the midpoint of which was in line with estimates. (Reporting by Jaspreet Singh in Bengaluru; Editing by Shailesh Kuber)