Pinterest falls 7% on weak third quarter revenue outlook

Investing.com -- Pinterest Inc (NYSE: PINS) reported second quarter results that exceeded Wall Street expectations, but shares tumbled 7% in after-hours trading Tuesday as the company’s third quarter revenue guidance disappointed investors.

The social media platform posted revenue of $1.18 billion for the quarter ended June 30, up 18% YoY and beating the analyst consensus of $1.15 billion. Adjusted earnings per share came in at $0.43, surpassing estimates of $0.36. However, the company’s third quarter revenue guidance of $1.19 billion to $1.21 billion, representing 13% to 15% growth YoY, fell short of investor expectations despite the midpoint of $1.2 billion aligning with analyst estimates.

Global monthly active users reached an all-time high of 640 million, an 11% increase YoY, marking the company’s 11th consecutive quarter of double-digit user growth. Adjusted EBITDA for the second quarter was $311 million, up 24% from $251 million in the prior year period.

"Our Q2 results reflect the scale and strength of our platform: more than $1.1 billion in revenue, growing 18%, and 640 million monthly active users," said Bill Ready, CEO of Pinterest. "AI is at the heart of our momentum and is a clear accelerant for our business."

Revenue in the U.S. and Canada grew 18% to $880 million, while Europe revenue increased 12% to $213 million. The Rest of World segment saw the strongest growth at 38%, reaching $87 million.

For the third quarter, Pinterest expects adjusted EBITDA in the range of $335 million to $355 million. The company completed over $2 billion of share repurchases year-to-date at an average price of $18.17.

Free cash flow for the quarter was $270 million, up 37% from $197 million in the same period last year.

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