pinterest Shares soared more than 20% on Friday after the company cited tariff-related shocks in disappointing fourth-quarter results.
The social media company’s fourth-quarter profit was lower than analysts expected, with revenue of $1.32 billion, compared to LSEG’s consensus estimate of $1.33 billion. Net income for the quarter was $277 million, down 85% from $1.85 billion a year earlier.
Additionally, adjusted earnings before interest, taxes, depreciation and amortization (EBIDTA) were $541.5 million, lower than analysts’ expectations of $550 million.
Pinterest expects first-quarter revenue to be between $951 million and $971 million, also below analysts’ expectations of $980 million.
Chief Executive Bill Ready said the company had “absorbed this year’s exogenous shock related to tariffs” and was further affected by advertising cuts from major retailers.
In January, Pinterest also announced plans to lay off less than 15% of its employees and reduce its office space in an effort to make a full-scale push into AI. It said it was “reallocating resources” to AI-focused teams and prioritizing “AI-powered products and features.”
Pinterest’s 1-day stock price chart.
Analyst opinion
In a note Friday, Citi said it was downgrading Pinterest shares to “neutral” from “buy” due to “further limited visibility from large UCAN and EU advertisers due to some of the challenges across tariffs and certain verticals, including furniture, restructuring of go-to-market sales capabilities as Pinterest’s advertiser base grows, and increased investments that impact margins.”
Goldman Sachs analysts said in a note Friday that Pinterest’s revenue performance is expected to “continue to be weighed down in the near term by macro-related headwinds” such as tariffs and consumer spending.
However, it added, “Despite these short-term headwinds, management remains optimistic about its long-term growth strategy, which is centered around a diversification of its advertiser base, automation, and performance-oriented goals.”
Analysts noted that user growth remains particularly strong among Gen Z users.
The company reported that the number of monthly active users worldwide in the fourth quarter rose 12% year-on-year to 619 million, a record high.
— CNBC’s Jonathan Vanian contributed to this report
