Pinterest Inc (NYSE:PINS) shares tumbled by more than 11% ahead of the open as it warned that earnings could be under pressure in the following months.
The social media platform saw its second-quarter earnings beat forecasts, but investors focused more on the lower guidance.
Looking at the third quarter, the company said it expects sales to be between US$885 million and US$900 million, down compared to Wall Street guidance of US$907 million.
Despite the weak outlook, second-quarter sales lifted 21% annually to US$854 million, ahead of analyst estimates of US848 million.
Earnings per share reached US$0.29, beating the expected US$0.28.
“Our monetization efforts are paying off,” Pinterest CEO Bill Ready said.
“Advertisers are seeing improved performance across key objectives on Pinterest — from brand awareness to conversion — as we continue to roll out AI-powered products and experiences.
“As a result, we’re gaining share of advertising budgets with some of the world’s largest brands.”
Monthly active users during the second quarter hit 522 million, beating estimates which predicted 520.1 million.