Pinterest Forecasts Higher Quarterly Revenue as Advertiser Spending Holds Firm
Pinterest's Strong Financial Outlook Driven by AI and Advertiser Confidence
Revenue Forecast and Market Reaction
May 4 (Reuters) - Pinterest forecast second-quarter revenue above analysts' estimates on Monday, helped by steady spending from advertisers as the image-sharing platform sharpens its ad offerings with deeper artificial intelligence integration.
Shares of the California-based company jumped 16% in extended trading.
AI Investments and Ad Suite Enhancements
Performance+ Ad Suite Improvements
The company has been stepping up investments in AI, rolling out enhancements to its Performance+ ad suite to automate ad creation and improve personalized targeting, which have started to bear fruit.
Support from Investors and Share Repurchase Program
The results come a month after activist investor Elliott disclosed a fresh $1 billion equity stake, backing Pinterest's strategy for ad revenue and supporting a newly announced $3.5 billion share repurchase program.
Competitive Landscape and Industry Trends
Challenges from Rivals and Market Shifts
Pinterest has struggled to keep pace with deep-pocketed rivals such as Meta's Instagram and Facebook, as major advertisers scaled back spending on its platform as AI tools rapidly reshape the online advertising market and tariff-driven costs force brands to protect margins.
Industry-Wide AI Adoption
Rival platforms are also leaning into AI to boost growth. Reddit last week forecast strong revenue gains driven by rising returns from its own AI-powered advertising tools.
Pinterest's Expansion Beyond Social Media
Pinterest closed its acquisition of tvScientific in February, aiming to extend advertisers' reach beyond social media and into connected TV.
Financial Performance and User Growth
Revenue Projections and Analyst Estimates
The company expects second-quarter revenue in the range of $1.13 billion to $1.15 billion, above analysts' estimates of $1.11 billion, according to data compiled by LSEG.
Growth in Monthly Active Users
It ended the first quarter with 631 million global monthly active users, up from the 570 million it had reported last year, a sign that its core product remains appealing to consumers seeking inspiration for everything from home decor to fashion and recipes.
First Quarter Revenue Results
Revenue for the first quarter rose 18% to $1.01 billion, above estimates of $966.25 million.
Reporting and Editorial Credits
(Reporting by Kritika Lamba in Bengaluru; Editing by Sahal Muhammed)
