Pinterest (PINS.US) stock price suffered a "bloodbath"! Q4 revenue guidance falls short of expectations. Slowdown in advertising spending and impact of tariffs pose hidden dangers.

Due to intense competition from large platforms such as Meta (META.US) during the holiday season, the image sharing social platform Pinterest (PINS.US) reported lower-than-expected earnings per share for the third quarter on Tuesday, along with weak performance guidance, leading to a nearly 20% drop in the company's stock price after hours. The financial report showed that Pinterest's third quarter revenue was $1.05 billion, a 17% increase year-over-year, in line with market expectations; net profit was $92.11 million, a significant increase of 201% from $30.56 million in the same period last year, but its adjusted earnings per share were 38 cents, lower than Wall Street's expected 42 cents. Looking ahead, the company expects fourth quarter revenue to be between $1.31 billion and $1.34 billion. The midpoint of its revenue guidance is $1.325 billion, lower than analysts' expectations of $1.34 billion. After the financial report was released, Pinterest's stock price continued to fluctuate in the post-market trading on Tuesday, completely erasing its year-to-date gains. It is understood that almost all of Pinterest's revenue comes from advertising business, and the company continues to strengthen its positioning as a "visual search" engine to help users discover creative inspiration in fashion, home decoration, and other fields. The company's newly launched "Pinterest Assistant" last week is positioned as the first AI-driven visual shopping companion, allowing users to communicate their shopping needs through conversation and replicate a real shopping experience. "Our investments in AI and product innovation are paying off," CEO Bill Ready said in a statement. "We have become a leader in the visual search field, successfully transforming the platform into an AI shopping assistant serving 600 million consumers." However, CFO Julia Donnelly mentioned during the financial report conference call that there was a slowdown in advertising spending in the U.S. and Canada regions in the third quarter. She pointed out that the slowdown in revenue growth was related to some "large U.S. retailers" facing tariff-related issues and declining profit margins. In the third quarter, the company's most profitable North American market saw a month-over-month increase of only 1 million to 103 million monthly active users, with revenue of $786 million, lower than the market's expected $799 million. Regarding fourth quarter performance guidance, Donnelly said: "We believe that the current overall trends and market uncertainty will continue, and the new tariff policies in the fourth quarter will also impact the home category." Before Pinterest announced its performance, digital advertising benchmarks such as Meta (META.US), Alphabet Inc. Class C (GOOGL.US), Amazon.com, Inc. (AMZN.US), and Reddit (RDDT.US) had already released their latest quarterly financial reports. Thanks to strong advertising spending, these companies all showed optimistic revenue performance in the third quarter. Data shows that Meta's third quarter revenue (98% from online advertising) surged by 26% year-over-year to $51.24 billion, marking the highest year-over-year growth since the first quarter of 2024; Amazon.com, Inc.'s online advertising sales grew by 24% year-over-year to $17.7 billion, exceeding the growth rate of the company's AWS cloud computing department; Alphabet Inc. Class C's third quarter total advertising sales were $74.18 billion, nearly 13% higher than the $65.85 billion in the same period last year. The company's YouTube department saw a 15% increase in online revenue in the third quarter, reaching $10.26 billion; Reddit's third quarter revenue soared by 68% year-over-year to $585 million, with a 19% increase in global daily active users to 116 million, higher than the expected 114 million. Pinterest noted that after the termination of the "minimal" exemption clause, spending by Asian e-commerce retailers on its U.S. platform continued to decline in the third quarter, but there has been "partial recovery" compared to the previous quarter. Earlier, the U.S. canceled the tax-exempt import clause for low-value packages from mainland China and Hong Kong, prompting Chinese retailers such as Temu and Shein to adjust their marketing budgets. Overall, Pinterest's global monthly active users continued to grow steadily, reaching a historic high of 600 million in the third quarter, higher than the market's expected 590 million. Jeremy Goldman, Senior Director of Emarketer Briefing, commented, "The current challenge is how to prove that the monetization efficiency of these new users can keep pace with North American users. This not only poses a significant challenge, but objectively speaking, it will also take some time." In other financial indicators, Pinterest's third quarter adjusted EBITDA was $306 million, higher than the expected $295 million. The global average revenue per user (ARPU) was $1.78, slightly lower than the expected $1.79.