Aug 4 (Reuters) – Image-sharing platform Pinterest forecast slower revenue growth for the third quarter on Tuesday, signaling tough competition for digital advertising from bigger players including Meta’s Instagram, sending its shares down 6% in extended trading.
Pinterest has been expanding Performance+, its AI-powered suite for advertisers, to attract more marketers by helping them optimize and scale their campaigns with less manual effort.
As Meta continues to improve its Advantage+ ad automation tools, Reddit launched a broadly similar product and with ads becoming a larger focus for OpenAI, competition is expected to increase further.
Last month, Google revamped Google Images with AI-powered personalized feeds and visual discovery features resembling Pinterest, indicating a broader push for AI-driven search and shopping by the search-engine giant.
Pinterest expects its current-quarter revenue to be in the range of $1.19 billion to $1.21 billion, representing a 13% to 15% growth, compared with analysts’ average estimate of $1.20 billion, according to data compiled by LSEG.
That is slower than the 18% revenue growth in its second quarter. The company reported $1.18 billion in revenue for the three months ended June 30, beating estimates of $1.15 billion.
“AI is at the heart of our momentum and is a clear accelerant for our business,” Pinterest CEO Bill Ready said in a statement.
Its global monthly active users rose 11% to 640 million in the second quarter from a year ago, while average revenue per user rose 7% to $1.86.
Earlier this year, the company completed its acquisition of tvScientific, a move aimed at extending advertisers’ reach beyond social media and into connected TV and giving Pinterest a broader pool of ad budgets.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Shreya Biswas)
