However, shares of the company, which were down more than 9%, pared losses in extended trading after CEO Bill Ready announced an ad integration deal with Google
Pinterest forecasts first-quarter revenue largely below Wall Street estimates on Thursday, a sign that it faces tough competition from bigger social media players even as the digital advertising market stabilises.
However, shares of the company, which were down more than 9%, pared losses in extended trading after CEO Bill Ready announced an ad integration deal with Google.
The deal, which will let Pinterest serve ads via Google’s Ad Manager, will help monetise several unmonetised international markets, he said.
Last year, the social media company partnered with e-commerce giant Amazon.com, which analysts had said would drive material advertising spend on its platform this year.
Third-party ad demand is scaling as we expected, and we are now seeing it contribute to our growth this quarter, Ready added.
Pinterest faces competition from the likes of TikTok and Meta Platforms-owned Facebook and Instagram, which have become the go-to platforms for advertisers in an uncertain economy due to their more extensive user base and higher engagement for targeted ads.
Pinterest’s solid but unspectacular fourth quarter numbers should see some scrutiny from the market, which saw Meta blow out expectations just last week, Jeremy Goldman, Insider Intelligence analyst, said.
Ad spending in the shopping category, typically one of the large advertisers in the holiday quarter, grew by less than 1% sequentially, market intelligence company Sensor Tower told Reuters on Tuesday.
Ad spend from software and gaming categories in the U.S. saw sequential increases of 34% and 22%, respectively, in Q4 for Pinterest, Sensor Tower said.
Global monthly active users on Pinterest, which lets users create online pinboards, increased by 11% to 498 million in Q4 compared with estimates of 484.5 million.
Pinterest posted revenue of $981.3 million for Q4 ended December 31, missing estimates of $990.6 million.