Pinterest just delivered its second-worst trading day in company history, with shares cratering 21% after the visual platform blamed tariff pressures for weaker-than-expected ad revenue. The earnings miss reveals how trade tensions are now rippling through digital advertising markets, hitting platforms that depend heavily on retail advertisers.
Pinterest just served up a brutal reminder of how quickly the digital advertising landscape can shift. The visual discovery platform's shares collapsed 21% Wednesday after the company revealed that tariff pressures are now bleeding into its core advertising business in ways that caught Wall Street off guard.
The numbers tell a stark story. Pinterest managed only 38 cents per share in adjusted earnings, missing analyst expectations of 42 cents. More concerning was the geographic breakdown - US and Canada revenue hit $786 million, falling short of StreetAccount's $799 million projection. That miss might seem modest, but it signals something bigger brewing beneath the surface.
"Tariff-related weakness showed up for the first time in our digital ads universe," RBC analysts wrote in their post-earnings note. The firm pointed to Pinterest's "lack of customer diversity" as a vulnerability that tariff pressures are now exploiting.
Pinterest CFO Julia Donnelly didn't mince words during the earnings call. The platform faced "some pockets of moderating ad spend" from "larger U.S. retailers" dealing with margin pressure from tariff-related costs, she explained. But here's the kicker - Donnelly expects these headwinds to intensify under President Donald Trump's renewed trade policies, particularly hitting the home furnishings category where Pinterest traditionally dominates.
The timing couldn't be worse for Pinterest, which has been fighting an uphill battle against larger social platforms like Instagram and TikTok for advertiser dollars. Citi analyst Ronald Josey flagged concerns that the company's international monetization efforts could "plateau or decelerate faster than expected," adding another layer of complexity to Pinterest's growth story.
Yet the platform isn't standing still. CEO Bill Ready has been pushing hard into AI territory, recently launching an AI-powered personal shopping assistant that aims to transform Pinterest's 600 million users into active buyers rather than just browsers. "We've become a leader in visual search and have effectively turned our platform into an AI-powered shopping assistant," Ready said in the earnings statement.
