On August 4, Pinterest, Inc. (NYSE:PINS) beat Wall Street's second-quarter targets, then told investors to expect a slower ride ahead. Shares dropped as much as 9% in extended trading anyway. The firm posted adjusted earnings of 43 cents a share, well past the 36 cents **** ysts had expected. Revenue was $1.18 billion against a $1.15 billion estimate. However, the guidance told a different story: third-quarter revenue of $1.19 billion to $1.21 billion implies growth of just 13% to 15%, a real step down from the 18% pace investors had gotten used to.
CEO Bill Ready spent part of the earnings call making a case that stuck with people: He said that any company still ignoring open-source AI models is probably wasting its shareholders' money. Pinterest is leaning into that idea itself, mixing pricier proprietary models with cheaper open-weight ones through what CFO Julia Donnelly called "model routing infrastructure," sending the hard stuff to expensive models and routine tasks to cheap ones. Donnelly also explained why growth is slowing: the ad boost from the World Cup won't repeat next quarter, while European regulators are squeezing the Asian retailers who buy heavily on Pinterest.
Etsy, Inc. (NYSE:ETSY) had its own rough week for a different reason. On August 5, the marketplace beat estimates and raised its full-year sales outlook. The firm then cut 220 jobs, about 12% of its staff, the same day.
Pinterest, Inc. (NYSE:PINS)'s user numbers held up well, with monthly actives up 11% to 640 million, ahead of the 635 million **** ysts wanted. Adjusted EBITDA of $311 million beat both the company's own guidance and Street estimates of $270 million. CEO Ready's push into cheap open-source AI could keep a lid on costs even as usage climbs.
However, growth itself is the problem. Revenue is decelerating from 18% down to a guided 13% to 15%. CFO Donnelly warns that European pressure on Asian advertisers could mean this slowdown will last longer than one quarter.
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CEO Bill Ready spent part of the earnings call making a case that stuck with people: He said that any company still ignoring open-source AI models is probably wasting its shareholders' money. Pinterest is leaning into that idea itself, mixing pricier proprietary models with cheaper open-weight ones through what CFO Julia Donnelly called "model routing infrastructure," sending the hard stuff to expensive models and routine tasks to cheap ones. Donnelly also explained why growth is slowing: the ad boost from the World Cup won't repeat next quarter, while European regulators are squeezing the Asian retailers who buy heavily on Pinterest.
Etsy, Inc. (NYSE:ETSY) had its own rough week for a different reason. On August 5, the marketplace beat estimates and raised its full-year sales outlook. The firm then cut 220 jobs, about 12% of its staff, the same day.
Pinterest, Inc. (NYSE:PINS)'s user numbers held up well, with monthly actives up 11% to 640 million, ahead of the 635 million **** ysts wanted. Adjusted EBITDA of $311 million beat both the company's own guidance and Street estimates of $270 million. CEO Ready's push into cheap open-source AI could keep a lid on costs even as usage climbs.
However, growth itself is the problem. Revenue is decelerating from 18% down to a guided 13% to 15%. CFO Donnelly warns that European pressure on Asian advertisers could mean this slowdown will last longer than one quarter.
#billion
2 months ago
