TLDR
- Pinterest shares dropped 18% after-hours following Q1 revenue guidance of $951M-$971M, below analyst expectations of $980.1M
- Tariff-hit retailers are cutting advertising budgets across the platform to protect profit margins from trade pressures
- Q4 revenue grew 14% to $1.32 billion but missed Wall Street’s $1.33 billion forecast
- Monthly active users climbed to 619 million from 553 million, exceeding the 606 million estimate
- Competition from TikTok and Instagram threatens Pinterest’s ability to retain advertisers and market share
Pinterest stock collapsed more than 18% in after-hours trading Thursday following weak first-quarter revenue guidance. The visual discovery platform forecast Q1 revenue between $951 million and $971 million, missing Wall Street’s $980.1 million estimate.
The company reported fourth-quarter revenue of $1.32 billion, up 14% year-over-year. The figure came in slightly below analyst expectations of $1.33 billion. Earnings per share reached 67 cents, just missing the 68-cent consensus.
CFO Julia Donnelly blamed tariff pressures for the shortfall. Major retail advertisers have reduced spending across the industry to protect margins. Pinterest’s concentration of large retail clients made the impact worse.
Retailers Pull Back on Ad Spending
Tariffs have forced major retailers to cut costs. Many of Pinterest’s biggest advertising customers are reducing their marketing budgets. The company’s heavy reliance on retail advertisers created outsized pressure on revenue.
“Many of the largest retailers have been disproportionately impacted by tariffs and have been pulling back on advertising spend,” Donnelly told analysts. The higher mix of large retailers resulted in a bigger impact on Pinterest’s business.
CEO Bill Ready said he wasn’t satisfied with Q4 revenue performance. He called the results an “exogenous shock” linked to tariffs. Ready acknowledged the quarter showed where Pinterest needs to move faster.
Competition Heats Up
Pinterest faces intense competition from TikTok and Instagram. These platforms offer advertisers larger audiences and more advanced AI targeting capabilities. Advertisers increasingly favor scaled ecosystems with better engagement metrics.
Longdley Zéphirin, CEO of The Zephirin Group, said competition from larger platforms will remain a structural headwind. Advertisers continue choosing platforms with superior targeting abilities. This dynamic could limit Pinterest’s ability to gain advertising market share.
Jefferies analysts warned that Pinterest faces immediate AI disruption risks. Unlike other companies where AI threats require assumptions about future progress, Pinterest’s risk is happening now. The company’s core use case makes it vulnerable even if AI capabilities plateau at current levels.
“PINS’ AI risk is more immediate, even if AI capabilities were to plateau at current levels given the core use case,” the Jefferies team wrote. The analysts said the stock’s cheap valuation still makes it hard for buyers to commit.
User Growth Remains Strong
Pinterest ended 2025 with 619 million global monthly active users. The figure beat estimates of 606 million and represented growth from 553 million users in 2024. Users continue seeking inspiration for home decor, fashion, and recipes on the platform.
The company cut 15% of its workforce last month. Management framed the restructuring as a shift toward AI-powered products. Investors saw the move as defensive.
Pinterest hired former Spotify ads head Lee Brown as chief business officer. The company also added Amazon veteran Claudine Cheever as chief marketing officer. Both hires aim to strengthen the advertising business.
Ready said Pinterest will keep AI at the core of its strategy. The company is pushing its Performance+ ad suite and Pinterest Assistant feature. “We’re using AI to power visual search, discovery, and shopping, not general-purpose text-based search,” he said.
Pinterest’s weak outlook contrasts with stronger results from Snap and Reddit. Both competitors benefited from their AI tools. Pinterest shares had already fallen 52% over the past year before Thursday’s results.
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