Why Pinterest Is Getting Crushed

Chris Lange

When Pinterest Inc. (NYSE: PINS) released its third-quarter financial results after the markets closed on Thursday, the social media firm said that it had a net loss of $0.23 per share and $280 million in revenue. The consensus estimates had called for a net loss of $0.04 per share and $280.62 million in revenue. In the same period of last year, it posted a net loss of $0.15 per share and $190.20 million in revenue.

Monthly active users (MAUs) hit 322 million during the third quarter, consisting of 87 MAUs in the US and 235 million MAUs internationally.

Average revenue per user (ARPU) increased 14% year over year to $0.90. ARPU in the US grew 26% to $2.93 and international ARPU increased 127% to $0.13.

Looking ahead to the full year, the company expects to see total revenue in the range of $1.10 billion to $1.115 billion and adjusted EBITDA loss of $30 million to $10 million. Consensus estimates call for a net loss of $0.15 per share and $1.12 billion in revenue for the year.

Ben Silbermann, Pinterest CEO, commented:

In Q3, we redesigned Pinterest to make the service more intuitive and improved recommendations quality to help people discover new ideas they didn’t know about before. We are also expanding the number of shoppable products on Pinterest, which makes it easy for our users to go from inspiration to action.

Todd Morgenfeld, Pinterest CFO, added:

In the third quarter, revenue grew 47% year over year and MAUs grew 28% to 322 million. We saw double-digit user growth in nearly all international countries. We are thrilled to serve Pinterest ads in 28 markets currently, compared to seven at the end of 2018. Pinterest also realized adjusted EBITDA profitability in Q3.

Shares of Pinterest closed Thursday at $25.13, with a post-IPO range of $23.05 to $36.83. The consensus analyst price target is $33.30. Following the announcement, the stock was down about 19% at $20.37 in the after-hours session.