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Pinterest (PINS) revenue for the second quarter of 2022

A woman walks past the sign at the headquarters of Pinterest in the South of Market area of ​​San Francisco.

Smith Collection | Gado | Stock Photos | Getty Images

Pinterest shares jumped on better-than-expected user numbers, even as earnings and revenue missed estimates and the company gave weak guidance for the third quarter.

Activist investor Elliott Management separately confirmed it is Pinterest̵[ads1]7;s top investor and said it has “conviction in the value creation opportunity” in the company.

Here’s how the company did it.

  • Earnings: 11 cents adjusted per share against the expected 18 cents per share, according to Refinitiv.
  • Income: $666 million vs. $667 million expected, according to Refinitiv.

Pinterest said global monthly active users fell 5% from a year earlier to 433 million. While that kind of drop-off is alarming for a social media app that relies on eyeballs to attract advertisers, analysts expected a steeper decline to 431 million.

The company’s finances were dismal, following a trend in the social media market. Facebook parent Meta, Twitter and Snap all reported second-quarter earnings that missed the top and bottom lines, and all attributed their dismal results to a weak online advertising market.

More troubling than the second quarter results was Pinterest’s comment about what is expected this quarter. The company said it expects third-quarter revenue to grow “mid-single digits on a year-over-year percentage basis,” below analysts’ estimates for sales growth of 12.7%.

In a letter to investors, Pinterest said financial challenges are causing marketers to pour in cash.

“The macroeconomic environment has created meaningful uncertainty for our advertiser partners,” Pinterest said in the letter. The company said it saw “lower-than-expected demand from U.S. big-box retailers and mid-market advertisers, who pulled back ad spending amid concerns about weakening consumer demand.”

Pinterest said its third-quarter guidance takes into account “slightly greater currency headwinds” than the previous quarter.

In June, Pinterest co-founder Ben Silbermann stepped down as the company’s CEO, and was replaced by Bill Ready, former head of Google’s commerce unit. Pinterest’s hiring of Ready pointed to a deeper push into e-commerce and online shopping.

Elliott’s involvement in the company was reported in July by The Wall Street Journal, which said at the time that the firm had built a stake of over 9% in the company. After Pinterest’s results were released on Monday, Elliott confirmed it is the company’s largest shareholder and said it is pleased with Ready’s progress.

“As the market-leading platform at the intersection of social media, search and commerce, Pinterest occupies a unique position in the advertising and shopping ecosystems, and CEO Bill Ready is the right leader to oversee Pinterest’s next phase of growth,” Elliott said in a statement.

SEE: Earnings Exchange looks at Pinterest, Caterpillar and JetBlue

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