Pinterest shares fell 9.6% in after-hours trading on Thursday after the social media company reported third-quarter earnings and revenue below Wall Street expectations, despite reaching a record 661 million monthly active users worldwide.
The company posted adjusted earnings per share of $0.46, missing the analyst consensus of $0.49 by $0.03. Revenue rose 12% year on year to $1.17 billion from $1.05 billion in the same quarter last year, but fell short of analysts’ $1.21 billion estimate.
Pinterest’s global monthly active users increased by 10% year on year to an all-time high of 661 million, reflecting continued growth in its user base.
“Pinterest reached an all-time high of 661 million monthly active users in Q3, with revenue growing 12% year over year,” said chief executive Bill Ready.
He added that the company’s artificial intelligence-driven visual search and shopping experiences were making the platform increasingly valuable to users and advertisers.
For the fourth quarter, Pinterest forecast revenue of between $1.425 billion and $1.475 billion, representing year-on-year growth of 8% to 12%. The midpoint of the range, at $1.45 billion, incorporates a modest foreign exchange headwind based on current spot rates.
The company expects adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of between $538 million and $588 million for the quarter.
Regional revenue performance
Revenue growth varied across Pinterest’s geographical markets during the third quarter.
The United States and Canada generated $894 million, up 14% year on year. Revenue in Europe remained flat at $193 million, while the rest of the world recorded 24% growth to $87 million.
Global average revenue per user increased slightly to $1.80 from $1.78 in the corresponding period last year.
Profitability and cash flow
Pinterest reported GAAP net income of $22 million and adjusted EBITDA of $339 million, representing an adjusted EBITDA margin of 29%.
Free cash flow, however, declined by 6% to $300 million from $318 million in the same quarter a year earlier.
The results showed continued growth in Pinterest’s user base and revenue, although the company fell short of analysts’ expectations for both earnings and sales.
