- tech360.tv
Pinterest Shares Slide After Disappointing Fourth-Quarter Revenue
Pinterest's fourth-quarter revenue fell short of analysts' estimates, leading to a decline in its shares. The company exceeded expectations for user growth, reaching an all-time high of 498 million monthly users. CEO Bill Ready has focused on targeted, direct-response ads and shoppable content to drive revenue.
Pinterest Inc. faced a decline in its shares during late trading as the company reported fourth-quarter revenue that fell short of analysts' expectations. This follows in the footsteps of social media peer Snap Inc., which also experienced sluggish sales.
According to a statement released on Thursday, Pinterest's sales rose by 12% to US$981 million in the period, slightly missing the average estimate of US$990.2 million. However, the company did surpass projections for user growth, reaching an all-time high of 498 million monthly users.
This disappointing performance comes on the heels of Snap's recent report, which also fell short of expectations, leading to a decline in its stock value. In contrast, Meta Platforms Inc. posted better-than-expected revenue last week.
Pinterest's CEO, Bill Ready, has been navigating a challenging industry by focusing on targeted, direct-response ads. Since taking over as CEO in 2022, Ready has significantly increased the proportion of direct-response ads, which now account for more than two-thirds of the company's business.
Direct-response ads are particularly valuable as they are designed to drive specific actions, such as clicking on promotions or making purchases, rather than solely building brand awareness.
The company has also prioritised shoppable content, making it easier for users to purchase items they see on pinboards. As part of this effort, Pinterest announced a partnership with Amazon.com Inc. in May. The new collaboration with Google is expected to further boost Pinterest's revenue from international markets, according to Ready during a conference call.
Ready highlighted that more than half of Pinterest users are on the platform for shopping purposes. The company's focus on shopping has been particularly successful among Gen Z, the largest and fastest-growing demographic on Pinterest.
While Pinterest had previously laid off 150 employees a year ago, Ready stated that there were no plans for further layoffs and expressed confidence in the company's current position.
"We've got a team that's executing well, delivering great things for our users and advertisers," Ready said in a separate interview.
Pinterest's fourth-quarter revenue fell short of analysts' estimates, leading to a decline in its shares.
The company exceeded expectations for user growth, reaching an all-time high of 498 million monthly users.
CEO Bill Ready has focused on targeted, direct-response ads and shoppable content to drive revenue.
Source: YAHOO