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(Bloomberg) — Pinterest Inc. reported second-quarter sales that beat analysts’ expectations, but earnings for the second quarter were less than Wall Street expected and user growth in the US and Canada, the company’s most lucrative market, was flat. The stock dropped by as much as 14% in after-hours trading.
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Adjusted earnings per share were $0.33, less than the average analyst estimate of $0.36. The company also reported 102 million monthly users in the US and Canada, the same number it had the prior quarter. Pinterest makes the vast majority of its revenue from North America.
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“Users are flatlining everywhere except outside the US, so the user base could be worth flagging,” said Robert Biggar, an analyst with Bloomberg Intelligence.
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Still, Pinterest signaled better-than-expected growth for the current period, a sign that the company’s advertising business is expanding despite an online search environment still being disrupted by the emergence of artificial intelligence.
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The search and discovery company’s sales were $998 million for the three-month period that ended on June 30, the company said in a statement Thursday. Wall Street analysts expected sales of $976 million, according to estimates compiled by Bloomberg. Monthly active users were 578 million, slightly ahead of estimates.
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Pinterest also projected current-quarter sales in the range of $1.03 billion to $1.05 billion, higher than the $1.02 billion analysts expected.
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Pinterest, which lets users search for images and save them to digital pinboards, has made shopping a key focus, showing users posts that feature products they can easily purchase from within the app. Chief Executive Officer Bill Ready has also talked about the importance of “visual search” as consumers often come to Pinterest to be inspired, not necessarily with a specific product or brand in mind.
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Over the last few years, Pinterest has deployed AI to more precisely target ads and recommended photos and images to users. The company’s better-than-expected sales for the second quarter follow similar beats by other advertising giants, including Meta Platforms Inc. and Alphabet Inc.’s Google.
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Pinterest stock had gained 35% so far this year before Thursday’s earnings release. The company’s stock can swing dramatically following quarterly earnings reports. In May, Pinterest stock jumped 18% after revenue guidance topped estimates at the midpoint. In February, it soared as much as 22% the day after the company posted holiday-quarter results.
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(Updates with user growth details and analyst commentary starting in the first paragraph.)
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