Pinterest reports solid Q3 revenue and user growth, but holiday forecast disappoints

Pinterest Inc. reported revenue of $898 million in the third quarter of 2024, up 18% year-over-year (YoY), and beating expectations of $896.7 million.

Q3 2024 financial breakdown

• Revenue: $898 million in Q3, up 18% YoY.
• Non-GAAP Income: $275 million million, up 42% YoY.
• Adjusted EBITDA: $242 million, up 31% YoY.
• Earnings Per Share (EPS): Adjusted EPS reached $0.40, beating Wall Street’s expectation of $0.34.

Increase in Pinterest users

The social media company also saw an increase in the number of users. Global Monthly Active Users (MAUs) reached a record high of 537 million, up 11% from the same quarter last year.

The company’s largest market is the US and Canada. MAUs in that market increased by a modest 3% during the quarter. However, MAUs in the company’s international markets (or “Rest of World”) rose by an impressive 16%.

The average amount of money earned from each customer increased in all areas around the world. The overall average reached $1.70, up 5% YoY.

“Another strong quarter,” says CEO

Bill Ready, CEO of Pinterest, said in a news release:

“We delivered another strong quarter with users reaching another all-time high of 537 million and revenue growth at 18%.”

Adding: “Our AI investments are driving results by powering better personalized experiences and greater performance for advertisers, with our lower-funnel ad tools being the fastest-growing part of our business. Advertisers are increasingly relying on Pinterest to engage our growing audience who see us as a great place to find inspiration, curate and shop.”

Weak holiday guidance

Most of the company’s earnings report was quite positive; the only thing that concerned investors the most was the weak holiday guidance.

The guidance was worse than expected for three reasons:

1. Q4 revenue forecast between $1.125 billion and $1.145 billion, with a a midpoint of $1.135 billion. This midpoint is shy of analyst expectations of $1.143 billion.
2. Ad spending declined in the food and beverage sector. This is expected to continue into the fourth quarter.
3. Increased competition from the likes of Meta and Snap to capture highly sought after holiday ad spending.

Shares in Pinterest fell by as much as 11% in extended trading after the announcement.

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