Pinterest (NYSE: $PINS) Stock Slumps on Disappointing Q4 Results

Pinterest (NYSE: $PINS) is an image-sharing and social media platform that lets users share and discover interest visually by posting, called pinning, videos or images to their’ or others’ boards, called collections. Based in San Francisco, CA, it was founded in December 2009 and has over 450 million monthly active users. 

On Thursday, February 8, 2024, Pinterest released its fourth quarter fiscal 2023 results after the closing bell to a negative market reaction.

Pinterest’s Q4 and Full Year Results

On Thursday, Pinterest released its fourth quarter and full-year earnings, revealing record margins and user growth. However, the social media giant misses out on analyst expectations for the fourth quarter.

The fourth quarter revenue increased 12% year-over-year, totaling $981 million, but below analysts’ expectations of $990.2 million. The company reported an EPS of 53 cents per share, beating analyst expectations of 51 cents per share. Moreover, the full-year revenue amounted to $3.06 billion, a year-over-year gain of 9%.

In the fourth quarter, monthly active users increased by 11% to reach 498 million, surpassing analyst predictions of 487 million. The company reported a global average revenue per user of $2, which fell short of analyst expectations of $2.05.

CEO Announces Google Partnership 

Bill Ready, the CEO of Pinterest, said, “We had a strong Q4, bookending a transformative year for Pinterest.” Adding, “2023 was our most productive year yet as we accelerated our product velocity and launched more solutions than ever before. Brands are responding by using our full suite of products to drive even better campaign performance.” 

The CEO announced “third-party app integration with Google.” He said, “We see Pinterest as significantly under-monetized across the board, but the most under-monetized internationally.” According to the CEO, the Google integration has been up for the past few weeks. 

He added that it “was not a significant revenue contributor” for Pinterest’s fourth quarter but could help in the first quarter and “going forward.”

The CEO mentioned that the Google integration is similar to the partnership with Amazon, targeting third-party ads. The integration is predicted to be out in upcoming quarters.

This partnership will help Pinterest in revenue and future growth, as 80% of the users are from outside the US. Executives are hopeful that the partnership with Google will be instrumental in increasing the average revenue per user in international markets.

Pinterest’s Q1 Revenue Guidance

Pinterest forecasts the first quarter fiscal 2024 revenue of between $690 million and $705 million, a year-to-year growth of 15%, compared to 17%  this quarter. The midpoint of $697.5 million falls below the consensus estimate of $703 million.

PINS Stock Performance 

Immediately after the Q4 results came out, the stock sunk by as much as 28% to a low of $29.40 during after-hours trading. It rebounded by 10% after the CEO announced their Google partnership during a conference call. 

During regular trading hours, PINS is trading at $36.60, down by 10.29% as of Friday, February 9, 2024, at 02:34 PM in New York. The drop was due to the company forecasting its first-quarter revenue below estimates. At the time of writing, the market cap is $24.77 billion, with a volume of 33,417,295.  

Is PINS Stock A Buy? 

Pinterest’s Q4 and full-year results were impressive but came in below estimates. The company’s integration with Google for third-party ads will also be phased in in upcoming quarters, creating more paths for user engagement and revenue growth. 

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