Pinterest on Monday announced its financial results for the second quarter ended June 30, reporting a 9% growth in revenue which reached $665.9 million. While this marks the lowest revenue growth the company reported in the last two years, and also missed Wall Street’s prediction of over 10% growth, Pinterest’s shares rose 21% to $24.36 after the American investment firm Elliott Investment Management announced that it’s now the largest investor of the social media company.
‘’Pinterest is a highly strategic business with significant potential for growth, and our conviction in the value-creation opportunity at Pinterest today has led us to become the Company’s largest investor,’’ the company said in a statement. ‘’As the market-leading platform at the intersection of social media, search and commerce, Pinterest occupies a unique position in the advertising and shopping ecosystems, and CEO Bill Ready is the right leader to oversee Pinterest’s next phase of growth.’’
While Elliott didn’t share the percentage of the stake it now owns in Pinterest, the WSJ reported last month that it acquired over 9%.
Meanwhile, the social media company reported a net loss of $43 million, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $92 million for the second quarter. The number of its monthly active users was down 5% to 433 million.
Pinterest CEO Bill Ready said that the company continued investing in shopping and e-commerce during the quarter. In June, the company announced the acquisition of THE YES, an AI-powered shopping platform, for an undisclosed amount. It also recently launched a new shopping API for merchants, introduced the AR Try ON feature in January to improve virtual shopping experience and launched Pinterest TV in November last year to enable live shopping on the popular platform.
Although the company is striving hard to make its platform more shoppable, its biggest revenue source is still digital advertising, which is still suffering from the post-pandemic economic slowdown.
“The macroeconomic environment has created meaningful uncertainty for our advertiser partners,” CEO Ready wrote in a letter to shareholders.
Due to the rising costs and decreasing ad budgets, many tech giants including Facebook, Twitter and Snapchat have reported sharp declines in their ad revenues for the second quarter of 2022. Meanwhile, Google’s search ads revenue managed to beat expectations in spite of the economic downturn.