Pinterest, an image-sharing platform, reported lower-than-expected revenue for the quarter on Monday, growing only 4% to $877 million. Analysts had expected $886.3 million. Pinterest joins companies like Alphabet and Snap in facing challenges in the ad market. Despite a projected increase in sales growth for the first quarter, the company’s shares fell 15% before settling at a 3% decrease in extended trading.
Advertisers have reduced their marketing budgets due to high inflation and interest rate hikes from global central banks, which has impacted the economic outlook. The past year was tough for advertising-dependent companies, with shrinking budgets and declining stock prices, but recent results from companies like Alphabet and Meta Platforms Inc have shown that the situation is not yet improving.
Pinterest expects revenue to grow in the low single digits in the first quarter, which is lower than the estimated 7% growth, according to Refinitiv data. The company’s Chief Financial Officer, Todd Morgenfeld, warned that the company expects weakness to persist among US small and medium businesses and mid-market advertisers in the first quarter. To reduce its expenses, Pinterest has taken cost-cutting measures such as reducing staff and closing some office spaces.
The company’s global monthly active users grew 4% to 450 million, below the estimated 452 million.
