Pinterest Q4 2022 Underperformance Sees Stock Slip

UTC by Tolu Ajiboye · 3 min read
Pinterest Q4 2022 Underperformance Sees Stock Slip
Photo: Depositphotos

Pinterest experienced an initial 12% decline in stock value following its less-than-expected Q4 2022 revenue haul. 

Pinterest (NYSE: PINS) recently saw its shares slip after posting a weaker-than-expected Q4 2022 earnings report. For last year’s fourth quarter, the image-sharing and social media service raked in revenue of $877 million, where analysts expected a much higher revenue haul of $886.3. Pinterest also reported 29 cents in earnings per share (EPS) for Q4 2022 compared to the marginally higher consensus estimate of 27 cents per share.

Pinterest’s Q4 revenue grew 4% year-over-year (YoY), while the ear’s overall sales climbed 9% YoY to $2.8 billion. Although the social media platform raked $17 million in net income last quarter, it sustained a net loss of $96 million for the full year.

Other Key Takeaways

According to Pinterest, there was a 4% increase to 450 million in its global monthly active user base compared to last year. It also said the average revenue per user (ARPU) for the US and Canada rose 6% in the last quarter to $7.60.

The company’s shares declined in extended trading following its underwhelming quarterly performance, initially dropping as much as 12%. This informed a weak forecast for the first quarter of the new year. The San Francisco-based internet company now expects 2023 first-quarter sales to increase in the “low single digits” YoY. Meanwhile, analysts had expected an increase of 6.9% to $614.8 million.

Pinterest also revealed the impending exit of Todd Morgenfeld, the company’s chief financial officer and head of business operations. Morgenfeld will depart the company on July 1st of this year.

Pinterest chief executive officer Bill Ready touched on the company’s performance vis-à-vis its projections to remain competitive. According to Ready, “while the industry as a whole is facing headwinds, we are adapting quickly to a changing macro environment and are committed to creating a more positive online experience for our users and advertisers.”

Pinterest Q4 2022 Earnings Follow Meta, Alphabet, Amazon

Pinterest’s Q4 earnings come amid several other ad-supported companies, including Meta Platforms (NASDAQ: META) and Alphabet Inc (NASDAQ: GOOGL). The latter two companies also posted lukewarm numbers as the tech space tried to shake off last year’s debilitating selloffs.

Last week, Meta reported a Q4 sales decline of 4% YoY to $32.2 billion, with Alphabet’s Google ad business seeing $59 billion in Q4 revenue. The Alphabet development represents a 3.6% drop from the year-ago period.

Alphabet’s YouTube unit also pulled in 8% less than what it made in the same period last year. For the fourth quarter of 2022, the unit made $7.96 billion.

Meanwhile, Snapchat parent Snap Inc (NYSE: SNAP) reported slightly higher Q4 sales of $1.3 billion. However, this figure still missed the consensus estimate of $1.31 billion for the same period.

Despite the general slump in quarterly performance across tech mainstays, Amazon’s (NASDAQ: AMZN) digital advertising unit was a notable outlier. In the fourth quarter, the unit reported a 19% jump in sales to $11.6 billion.

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