Pinterest Shares Plunge After Earnings Miss, Cites Tariff Impact
Pinterest shares fell sharply in after-hours trading , after the company reported fourth-quarter earnings that missed analyst expectations and issued weaker-than-anticipated guidance for the first quarter. The stock was down around 20% following the release of the results.
The company reported fourth-quarter revenue of $1.32 billion, a 14% increase year-over-year, but slightly below the $1.33 billion projected by LSEG analysts. Adjusted earnings per share came in at $0.67, falling short of the expected $0.69. Despite the revenue miss, full-year revenue for 2025 reached $4.22 billion, also up 14% compared to the previous year.
However, the outlook for the current quarter is dimming investor sentiment. Pinterest forecasts first-quarter revenue between $951 million and $971 million, trailing analyst estimates of $980 million. Adjusted EBITDA for the first quarter is expected to be in the range of $166 million to $186 million, also below expectations.
Tariffs Blamed for Advertising Slowdown
In a call with investors, Pinterest CEO Bill Ready attributed the disappointing revenue performance, in part, to the impact of tariffs imposed during the Trump administration. He stated that many of the largest retailers, a significant portion of Pinterest’s advertiser base, have been “disproportionately impacted by tariffs and have been pulling back on advertising spend across the industry as they seek to protect their margins.”
Ready emphasized that Pinterest’s large share of major retail advertisers meant the company felt a greater impact from this trend. The company also noted a pullback in ad spend from retailers in Europe, compounding the issue.
User Growth Remains Strong
Despite the financial headwinds, Pinterest continues to experience robust user growth. Global monthly active users reached 619 million in the fourth quarter, a 12% increase year-over-year and an all-time high. The company highlighted accelerating growth in the second half of 2025, with Gen Z now representing over half of its user base.
Investing in AI and Commerce
Pinterest is actively investing in artificial intelligence (AI) to enhance its platform and drive future growth. The company has expanded its measurement capabilities and introduced Pinterest Performance+, an AI-powered campaign management platform designed to automate advertising processes. In December, Pinterest announced its acquisition of tvScientific, signaling a move to expand its presence in the connected TV (CTV) advertising space.
The company is also leveraging AI to improve its commerce capabilities, with features like Pinterest Assistant, an AI-backed shopping companion that allows users to search and purchase products using voice or text prompts. AI-powered visual search remains a core focus for the platform.
Focus on Mid-Sized Businesses
Looking ahead, Pinterest plans to broaden its revenue mix and accelerate its sales transformation. The company sees significant potential in attracting advertising dollars from mid-sized enterprises and small-to-medium businesses (SMBs), which represent a substantial opportunity for scaling advertiser demand. Ready noted that these advertisers typically have annual gross merchandise value (GMV) ranging from $30 billion down to $10 million.
Organizational Changes Underway
Pinterest’s earnings report comes amid a period of significant organizational change. The company recently announced layoffs affecting approximately 15% of its workforce as part of a strategic shift towards AI. Lee Brown joined the company in late January as its first Chief Business Officer to lead these efforts.
“We need to further broaden our revenue mix and accelerate the next phase of our sales and go to market transformation,” said Bill Ready, CEO of Pinterest. “These efforts will be led by Lee Brown, who joined in late January as our first Chief Business Officer.”
The company’s adjusted EBITDA for the fourth quarter was $541.5 million, falling short of Wall Street’s expectation of $550 million. Net income for the quarter was $277 million, a significant decrease from the $1.85 billion reported in the same period last year, which included a deferred tax benefit.
This marks the second consecutive quarter in which Pinterest’s stock has experienced a substantial decline following disappointing earnings results. The company acknowledged its dissatisfaction with the Q4 revenue performance, stating that it does not reflect Pinterest’s potential for future growth.
