Pinterest’s Q3 Earnings: A Mixed Bag
The social media giant’s stock took a 15% hit on Thursday after releasing its third-quarter earnings, despite beating expectations on both revenue and profit. So, what’s behind the slump?
Revenue Guidance Falls Short
Pinterest projected fourth-quarter revenue to be between $1.125 billion and $1.145 billion, with a midpoint of $1.135 billion. While this may seem like a decent range, it actually fell short of analyst estimates of $1.143 billion. This conservative guidance likely contributed to the stock’s decline.
A Silver Lining: User Growth and Net Income
On a more positive note, Pinterest reported an 18% increase in sales to $763.2 million, with 537 million global monthly active users – surpassing analyst estimates of 532.6 million. The company’s net income also saw a remarkable 354% year-over-year growth to $30.56 million.
Share Buyback and Expenses
In a move to boost investor confidence, Pinterest’s board authorized a $2 billion share buyback. Meanwhile, the company’s total cost and expenses rose 17% to $904 million, compared to $768 million the previous year.
Industry Insights: Ad Revenue and User Growth
Pinterest’s earnings come amidst a flurry of reports from other tech companies with online advertising businesses. Notably, Amazon’s ads business grew 19% year over year to $14.3 billion, while Meta’s sales rose 19% year over year to $40.59 billion. Alphabet’s advertising sales grew 10% year over year to $65.85 billion, and Microsoft’s search and news advertising revenue jumped 18% year over year.
Reddit and Snap’s Impressive Q3 Performance
In other industry news, Reddit’s sales soared 68% to $348.4 million, while Snap’s revenue grew 15% year over year to $1.37 billion.
What’s Next for Pinterest?
As the company navigates the ever-changing landscape of online advertising, investors will be watching closely to see how Pinterest’s revenue guidance plays out in the coming quarters. Will the social media giant be able to bounce back from this recent slump? Only time will tell.
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