Dive Brief:
- Pinterest’s fourth-quarter revenue jumped 14.3% year over year to $1.3 billion, the social media company announced Thursday. Full-year revenue increased 15.8% from a year earlier to $4.2 billion.
- The company’s Q4 net income plummeted 85% from a year prior to $277 million. Its full-year net income dropped 77.6% to $416.9 million.
- In a call with analysts, Pinterest CEO Bill Ready attributed the company's Q4 earnings results, in part, to retailers reducing ad spend due to tariffs.
Dive Insight:
Though Pinterest attracted more users and grew revenue on its platform in Q4, those gains weren’t enough to stave off the overall tariff impact. In its fourth quarter, the company’s global monthly active users rose 12% year over year to 619 million.
During an earnings call with analysts, Ready said the company in Q4 concentrated on major retailers, because they offer shoppers a broad selection of products. “This strategy has been effective as reflected in our user and engagement trends and in our ad supply with paid clicks to advertisers up roughly fivefold over the last three years,” Ready said.
While that strategy contributed to the company’s user and engagement growth, it also left Pinterest more exposed to large retailers’ struggles compared to other social platforms, Ready explained during the call. “We’re not satisfied with our Q4 revenue growth, and we are moving with urgency to close the gap,” he said.
“Many of the largest retailers 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 said. “Our higher mix of large retailers relative to some of our peers has resulted in us feeling more of an impact. This highlights the need for us to further accelerate our growth with a broader set of mid-market, [small and mid-size businesses] and international advertisers with less than $30 billion of [gross merchandise value]. This is the next phase of our sales and go-to-market transformation.”
Meanwhile, Pinterest has been developing tools to connect customers with products. Last September, it unveiled its where-to-buy links feature, which connects users viewing image ads to multiple retailers with items in stock. A month later, the company debuted a series of AI-powered personalization features, including its “boards made for you” section, which uses AI and “editorial expertise” to generate inspirational boards based on users’ tastes.
Last month, Pinterest said it planned to lay off around 15% of its global workforce and shed some of its office space, according to a filing with the U.S. Securities and Exchange Commission. The company said it will redirect those resources toward AI-focused positions and teams, develop AI-powered products and capabilities and change its go-to-market strategy.
