Pinterest shares closed nearly 17% lower on Friday, after the company cited tariff-related shocks in disappointing fourth-quarter earnings.
The social media company’s Q4 earnings came in below analysts’ expectations, with revenue of $1.32 billion compared with LSEG consensus estimates of $1.33 billion. Net income for the quarter plunged 85% to $277 million from $1.85 billion the prior year.
It also recorded $541.5 million in adjusted earnings before interest, taxes, depreciation, and amortization, or EBIDTA, below the $550 million that analysts were projecting.
Pinterest expects first-quarter sales to be between $951 million and $971 million, which is also below analysts’ forecasts of $980 million.
CEO Bill Ready said the company “absorbed an exogenous shock this year related to tariffs” and was more exposed to reduced advertising spend from large retailers.
Pinterest also announced plans in January to lay off less than 15% of its workforce and cut back on office space, in a bid to go all in on AI. It said it’s “reallocating resources” to AI-focused teams and prioritizing “AI-powered products and capabilities.”
Pinterest one-day stock chart.
What analysts are saying
In a Friday note, Citi said it was downgrading shares of Pinterest from Buy to Neutral, “given more limited visibility from larger UCAN & EU advertisers due in part to tariffs and challenges across specific verticals,” such as home furnishing, the rebuilding of its go-to-market sales function as Pinterest broadens its advertiser base, and greater investments impacting margins.
Pinterest’s revenue performance is expected to continue to be “pressured near-term by macro-related headwinds,” such as tariffs and consumer spending, Goldman Sachs analysts said in a note on Friday.
But they added: “Despite these near-term headwinds, management remains optimistic around its long-term growth strategy centered around diversifying its advertiser base, automation, and performance-oriented objectives.
The analysts noted that user growth remains particularly strong amongst Gen Z users.
The company reported that its fourth-quarter global monthly active users jumped 12% year-over-year to 619 million, representing an all-time high.
— CNBC’s Jonathan Vanian contributed to this report
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