Pinterest Inc forecast second-quarter revenue growth below Wall Street estimates on Thursday, as the image-sharing platform grapples with a pullback in advertising spending, sending its shares down 9% in trading after the bell.
Smaller digital ad sellers such as Pinterest and Snap Inc are losing ground in a weak economy to big tech rivals Alphabet and Meta Platforms as advertisers stick with tried and tested platforms.
This followed robust epidemic era sales when advertising paid substantially to reach customers online.
Shares of peer Snap fell about 18% in aftermarket trading after the company missed revenue expectations for the first quarter and warned it could miss estimates for the second as well.
Refintiv records show that the monthly active users (MAUs) of the image-sharing network increased by 7% to 463 million, surpassing estimates of 454.03 million.
In the first quarter that ended on March 31, the company’s revenue increased 5% to $602.58 million. Analysts on average had expecting $592.99 million, according to Refinitiv data.
Pinterest said it expected revenue growth in the current quarter to be in line with revenue growth in the first quarter and the fourth quarter of 2022. Fourth quarter revenue grew 4%. 6.15% growth was what Wall Street projected, according to Refinitiv data.