By Jaspreet Singh
Aug 4 (Reuters) – Image-sharing platform Pinterest forecast slower revenue growth for the third quarter on Tuesday, a sign of tough competition for digital advertising from bigger players including Meta’s Instagram, sending its shares down 9% in extended trading.
Pinterest has been expanding Performance+, its AI-powered suite for advertisers, to attract more marketers by helping them optimize and scale their campaigns with less manual effort.
As Meta continues to improve its Advantage+ ad automation tools, Reddit launched a broadly similar product and with ads becoming a larger focus for OpenAI, competition is expected to increase further.
Last month, Google revamped Google Images with AI-powered personalized feeds and visual discovery features resembling Pinterest, indicating a broader push for AI-driven search and shopping by the search-engine giant.
“We faced incremental pressure mid-quarter from Asia-based cross-border retailers impacted by regulatory actions particularly in Europe and that pressure is continuing in the third quarter,” CFO Julia Donnelly said on the company’s post-earnings call.
Pinterest expects its current-quarter revenue to be in the range of $1.19 billion to $1.21 billion, representing a 13% to 15% growth, compared with analysts’ average estimate of $1.20 billion, according to data compiled by LSEG.
That is slower than the 18% revenue growth in its second quarter. The company reported $1.18 billion in revenue for the three months ended June 30, beating estimates of $1.15 billion.
“Its AI tools have shown early promise, but they haven’t generated the same level of enthusiasm as competitors’ offerings,” said Emarketer analyst Marisa Jones.
Pinterest’s global monthly active users rose 11% to 640 million in the second quarter from a year ago, while average revenue per user rose 7% to $1.86.
Earlier this year, the company completed its acquisition of tvScientific, a move aimed at extending advertisers’ reach beyond social media and into connected TV and giving Pinterest a broader pool of ad budgets.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Shreya Biswas)
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