(Bloomberg) -- Pinterest Inc. reported sales that missed analysts’ estimates as it confronts an advertising slump, sending shares down as much as 16%.
The company, which makes a website for visual lifestyle inspiration, reported $877 million in fourth-quarter sales, falling short of analysts’ estimates of $887.2 million, according to an average of those surveyed by Bloomberg.
“Pinterest has some interesting innovations, but they’re doing them in a tough market,” said Mark Mahaney, head of internet research at Evercore ISI. At a time when advertisers are pulling back their spending, “people will still buy Google and Meta, and there will be less appetite for the secondary platforms,” he said.
Monthly active users rose to 450 million, up from 431 million in the same period a year ago, following a stretch of lower engagement.
Bill Ready, Pinterest’s chief executive officer, says that engagement – a metric that encompasses user interactions like pins, comments and saves – is up 10%, and has become a top priority for Pinterest. It’s emphasizing that benchmark over monthly active users, or MAUs, a key focus for many of its social networking peers.
“We are very much focused on making sure that we return to user growth, but we are more concerned about driving deeper engagement and deeper monetization per user versus chasing MAUs as a vanity metric,” Ready said in an interview. He added that companies often add users from international markets where they can’t make much money, making the MAU metric less valuable.
Separately, Todd Morgenfeld, the chief financial officer, is stepping down, just a week after the company laid off 150 employees. Morgenfeld, who has held the role since 2016, will leave on July 1.
©2023 Bloomberg L.P.
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