Pinterest shares drop 20% after missing Q4 earnings targets

Pinterest experienced a sharp decline in market activity outside standard hours, with its shares dropping 20% in after-hours trading. The drop followed the release of its fourth-quarter financial results, which missed analyst expectations for both revenue and earnings per share (a key profitability metric). Despite the financial miss, the platform’s user base grew faster than expected, with monthly active users increasing 12% year-over-year to 619 million, compared to the 613 million users forecast by Wall Street.

The company’s fourth-quarter performance contrasted with expectations:

• Revenue: $1.32 billion, compared to the $1.33 billion expected.
• Earnings per share: 67 cents, compared to the 69 cents projected.

Pinterest attributed the revenue shortfall to larger advertisers pulling back on spending, particularly in Europe, alongside a new furniture tariff implemented in October that disrupted its home category. The company warned that these negative trends could worsen during the first quarter. For the first quarter of 2026, Pinterest forecast sales to be between $951 million to $971 million, falling below the $980 million expected by analysts.

To counter the disappointing financial results, Pinterest CEO Bill Ready highlighted the platform’s scale as a search destination, comparing its search volume favorably to ChatGPT. Ready asserted that Pinterest sees 80 billion monthly searches and generates 1.7 billion monthly clicks, compared to the 75 billion monthly searches recorded by ChatGPT. Furthermore, Ready emphasized the commercial intent of Pinterest’s users, stating that more than half of its searches are commercial in nature, compared to approximately 2% of searches on ChatGPT.

To address how the platform will navigate the rise of artificial intelligence in shopping, Ready pointed to visual search and personalization features. “We’re helping them complete those commercial journeys without having to type in a single prompt,” Ready said, referencing the platform’s integration with partners like Amazon to simplify checkout flows. He added that while customers do not yet seem ready to permit an AI to make purchases on their behalf, Pinterest would be prepared if that shift occurs, claiming that solving this would be one of the easiest parts of the commercial journey.

Why it matters

Pinterest is struggling to monetize its user base effectively, a challenge that intensifies as AI-driven search platforms increasingly compete for the same commercial intent and advertising dollars.