Sports & Competition
Wed, November 5, 2025
Tue, November 4, 2025
Pinterest's weak revenue forecast signals intense competition for ad dollars
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Published in Sports and Competition on Tuesday, November 4th 2025 at 19:22 GMT by reuters.com- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Key Figures
| Metric | Q4 2023 | YoY % | 2024 Forecast |
|---|---|---|---|
| Total Revenue | $2.19 billion | +1.3% | $2.26 billion |
| Ad Revenue | $1.84 billion | -2.1% | $1.89 billion |
| Adjusted EBITDA | $219 million | +6.4% | $240 million |
| Revenue per Ad User | $14.3 | -7.5% | $14.8 |
Pinterest’s adjusted EBITDA rose modestly, but the company’s core ad business remains a concern. The platform’s “Promoted Pins” saw a decline in cost‑per‑click (CPC) rates, with the average CPC dropping from $0.78 in Q3 to $0.73 in Q4. At the same time, competitors such as Meta Platforms (FB) and Alphabet’s YouTube reported increases in their CPC rates, indicating stronger advertiser demand for their inventory.
Drivers of the Weak Forecast
1. Saturated Market and Increased Competition
The visual search market has become increasingly crowded. Meta’s “Shopify” partnership, which allows merchants to set up shoppable posts directly within Facebook and Instagram, has siphoned off a sizable share of Pinterest’s e‑commerce traffic. Alphabet’s YouTube Shorts and TikTok’s “Discover” tab have also captured a large fraction of the 2.8 billion monthly active users who historically scrolled on Pinterest for inspiration.
2. Ad Spending Shifts
Global ad spend is projected to grow by 5.2% in 2024, yet Pinterest’s share of that spend is expected to shrink. The company’s own analyst team cited “an ongoing shift in advertiser spend toward mobile video formats,” a trend that benefits platforms with robust video ad ecosystems like TikTok and YouTube.
3. Monetization Challenges with Shoppable Content
Pinterest launched “Shop the Look” in late 2022, hoping to convert casual browsers into buyers. However, the feature has yet to achieve significant lift in transaction volume. According to the company, the click‑through-to‑purchase ratio for shoppable pins hovered at a low 0.12%, below the 0.2% benchmark set in Q3.
4. User Growth Slowdown
Pinterest’s active monthly users grew by just 4.3% in Q4, down from the 7.6% growth reported in the same quarter last year. The company attributes this to a “mature user base” that is less receptive to new content formats, and the rising popularity of TikTok’s “For You” algorithm that keeps users on the app longer.
Strategic Responses
Pinterest has outlined several initiatives to counter these challenges. The company is expanding its “Pinterest Ads” platform to support longer video creatives, leveraging the fact that its audience is highly intent‑driven. It also announced a partnership with Shopify to enable “Buyable Pins” that allow users to purchase directly from the app. While these steps are promising, investors remain skeptical about how quickly they can translate into incremental revenue.
The company is also investing in AI‑driven recommendation engines to better surface relevant content and improve the relevance of promoted pins. Pinterest’s head of machine learning, Dr. Emily Tran, said that early beta tests of the new recommendation system had improved click‑through rates by 3.7% on average.
Market Reactions
On the day of the earnings release, Pinterest’s stock fell 4.8% to $19.23, the largest one‑day drop since the 2020 pandemic rally. Wall Street analysts downgraded the stock from “Hold” to “Sell” and trimmed their price targets from $30 to $23.
Meta Platforms (NASDAQ: FB) saw a modest 0.3% uptick as the company released its own Q4 earnings, projecting ad revenue growth of 9.2%. Alphabet (NASDAQ: GOOGL) also posted a 3.1% rise, citing a 12% increase in video ad revenue. These moves highlight the divergent fortunes of social media platforms in a rapidly changing advertising landscape.
Looking Ahead
Pinterest’s weak revenue forecast is a signal that the platform’s ad‑centric business model is under stress. While the company’s user base remains strong, it is increasingly unclear whether the current mix of advertising formats can sustain growth. Investors will be watching closely for the next quarterly earnings release to see whether Pinterest can reverse the downward trajectory of its ad revenue and regain the trust of advertisers.
For more detailed financial data, see Reuters’ coverage of Pinterest’s Q4 earnings: https://www.reuters.com/markets/earnings/pinterest-reveals-q4-revenue-details-2024-01-22/ and the comparative performance of Meta and Alphabet: https://www.reuters.com/technology/meta-ads-revenue-2024-q4-2024-04-27/.
Read the Full reuters.com Article at:
[ https://www.reuters.com/business/pinterests-weak-revenue-forecast-signals-intense-competition-ad-dollars-2025-11-04/ ]
