Pinterest Inc (NYSE:PINS) shares fell more than 20% to about $15 on Friday morning after the company issued a softer-than-expected outlook as well as disappointing fourth quarter earnings.
The social media platform guided first quarter 2026 revenue to between $951 million and $971 million, representing year-over-year growth of about 11% to 14% but below the Wall Street consensus of $980 million. The company said it expects first-quarter adjusted EBITDA of $166 million to $186 million.
The company noted its first quarter outlook assumes foreign exchange will provide roughly a three-percentage-point tailwind based on current spot rates.
For the fourth quarter ended December 31, Pinterest reported revenue of $1.319 billion, up 14% year-over-year but slightly below the $1.33 billion consensus estimate.
Adjusted earnings per share were $0.67, below expectations of $0.69. Adjusted EBITDA came in at $541.5 million, just under expectations of about $550 million.
Pinterest said global monthly active users reached a record 619 million in the quarter, up 12% from a year earlier.
“As we navigate a dynamic environment, we’re laser-focused on execution and transforming our sales and go-to-market efforts so monetization better reflects the valuable commercial intent we see on Pinterest,” Pinterest CEO Bill Ready said in a statement. “We’re confident these important changes will make us a stronger company and position us to realize the long-term opportunity ahead.”
Wedbush analysts maintained a ‘Neutral’ rating on Pinterest following the results, but lowered its price target to $16 from $30.
“The current valuation is more balanced relative to prior periods given the execution risks related to recent strategic shifts and the lack of catalysts that could meaningfully reaccelerate growth,” they wrote.
They noted that fourth quarter revenue of $1.3 billion was below expectations by roughly 1% and at the low end of management’s guidance, while adjusted EBITDA of $542 million came in about 2% below consensus, with year-over-year margin expansion of just 20 basis points.
At the midpoint, Pinterest’s first-quarter guidance implies revenue growth of 12.5% year over year, roughly 230 basis points below Street estimates, and adjusted EBITDA guidance of $166 million to $186 million is below initial expectations by $29 million.
Wedbush highlighted moderating ad spend in the US and Canada, noting that Pinterest’s higher mix of large retailers amplified the impact. Although ad impressions rose 41% year-over-year in Q4, ad pricing fell 19% due to a continued shift toward under-monetized regions.
Management’s guidance also reflects potential risks from a new tariff affecting the home furnishings category and competition from emerging commerce tools,” the firm noted. “Pinterest has struggled to capitalize on key growth initiatives, limiting the company's ability to reinvigorate growth to the high-teens range.”
They expect a three-year revenue CAGR of 13.6%, below management’s framework and roughly 100 basis points lower than their prior estimate.