Pinterest shares drop 10% despite revenue beat

Pinterest shares dropped over 10% on August 7, 2025 after the company missed second-quarter earnings per share estimates.

The company posted adjusted earnings per share of US$0.33, below the US$0.35 expected by analysts, while revenue reached US$998 million, surpassing forecasts of US$975 million.

Pinterest, a US-based social media platform, reported a 17% year-on-year rise in sales, with net income increasing to US$38.8 million from US$8.9 million a year earlier.

The firm said it expects third-quarter sales between US$1 billion and US$1.1 billion, higher than analyst estimates.

Pinterest reported 578 million global monthly active users in the second quarter, exceeding projections of 574.5 million, according to StreetAccount.

Second-quarter adjusted EBITDA was US$251 million, above estimates of US$233 million.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ International expansion creates user growth but monetization headwinds

Pinterest’s latest results highlight a common challenge for social platforms expanding globally, adding users while maintaining revenue quality.

The company grew monthly active users by 11% to 578 million, beating expectations of 574.5 million, yet missed profit targets with earnings per share of $0.33 versus the expected $0.35 1.

A key factor behind this disconnect is Pinterest’s international expansion, which has driven ad pricing down 25% year-over-year as more ad impressions shift toward international markets where advertising rates are typically lower 1.

This reflects a broader industry challenge where platforms must balance user base growth with maintaining attractive economics for advertisers in their core markets.

The demographic shift is notable, with Gen Z users now representing over 50% of Pinterest’s user base. This suggests the platform is successfully attracting younger users but may still need to optimize how to monetize this audience effectively 1.

2️⃣ AI advertising tools show promise but implementation costs weigh on near-term profits

Pinterest’s investment in AI-driven advertising capabilities demonstrates both the potential and the financial trade-offs of technological advancement.