Pinterest warns of year-end ad slowdown in Q3 earnings

As 2024 winds down, Pinterest is warning of an advertising slowdown, especially among food and beverage brands.

Pinterest reported its Q3 numbers Thursday, posting earnings per share of 40 cents on an adjusted basis and quarterly revenue of $898 million. Pinterest has 537 million global monthly active users, up 11% year over year.

During a call with analysts, Pinterest CFO Julia Donnelly warned of “softness” among food and beverage advertisers, which have scaled back as a result of lower sales. The platform expects this trend to continue through the final quarter of 2024.

Restaurants and some consumer product goods are seeing a slowdown in demand. The National Restaurant Association found 38% of adults are not ordering takeout as much as they would like, a signal that people may be cutting expenses. Other companies, such as Procter & Gamble, have noted lower sales in China, which may not bounce back for a few quarters.

Although Pinterest is forging ahead with AI integrations, it may face headwinds with adoption. In October, Pinterest released its AI-enhanced Performance+ advertising suite, allowing for better targeting and automated campaign creation. However, brands are just dipping their toes into the capabilities.

"Performance+ is still in the early rollout phase, with many advertisers limiting budget shifts and adoption of new features during holiday peak period," Donnelly said.

While the company’s net income grew an impressive 354% compared to the same quarter last year, its Q3 expenses reached $904 million.

Most of the 17% year-over-year increase was due to additional costs in AI development and integration, such as hiring specialized staff. Other companies including Meta and Amazon warned of large capital expenditure budget increases as they deploy more AI capabilities.