According to CNBC, Pinterest shares plummeted 15% on Tuesday after the company reported third-quarter earnings that missed analyst expectations and provided weak fourth-quarter guidance. The company posted $92.11 million in net income, up 201% year-over-year, but fell short on earnings per share. Pinterest’s Q4 revenue outlook of $1.31-$1.34 billion trailed Wall Street’s $1.34 billion projection, while global average revenue per user came in at $1.78 versus the expected $1.79. The platform did grow to 600 million monthly active users, beating estimates of 590 million, but U.S. and Canada sales of $786 million missed the $799 million target. CEO Bill Ready claimed the company’s AI investments are paying off, positioning Pinterest as an “AI-powered shopping assistant.”
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The AI Gap
Here’s the thing about Pinterest’s AI shopping assistant narrative—it’s not moving the needle where it counts. While Ready talks up visual search and AI innovation, the numbers tell a different story. Pinterest’s 17% revenue growth looks downright anemic compared to what we’re seeing from the actual digital advertising giants. Meta just posted 26% growth, Amazon’s ad business grew 24%, and even Alphabet managed nearly 13% advertising growth. Basically, Pinterest is getting left behind in the very AI advertising boom it claims to be leading.
User Growth vs Monetization
Pinterest added 22 million monthly active users last quarter, which sounds impressive until you look at the monetization. The company can’t seem to convert that engagement into meaningful revenue per user. At $1.78 globally, Pinterest’s ARPU is basically stuck. And that’s the core problem—they’re growing their audience but failing to make more money from each user. It’s like having a packed store where everyone’s browsing but nobody’s buying at the rates Wall Street expects.
Competitive Squeeze
The timing couldn’t be worse for Pinterest to show weakness. We’re in the middle of an AI arms race where Meta, Google, and Amazon are pouring billions into infrastructure and seeing immediate returns. Even Reddit, which reported last week, showed 68% revenue growth and beat user estimates. So why is Pinterest struggling? They’re getting squeezed from all sides—social commerce, search advertising, and now AI-powered shopping experiences from companies with way deeper pockets.
What’s Next?
Bill Ready’s bet on Pinterest becoming an AI shopping assistant needs to start showing results fast. The problem is they’re trying to compete in a space where the giants are already dominating. Meta’s advertising machine is firing on all cylinders, Amazon owns product discovery, and Google still dominates search. Pinterest’s visual discovery angle is unique, but can it translate into serious revenue? I’m skeptical. They’ve been talking about shopping and commerce for years, and the payoff keeps getting pushed further out. Now with AI, they’re making the same promises with slightly different technology.
