Investing.com -- Pinterest, Inc. (NYSE:PINS) beat expectations for revenue and adjusted earnings but projected slower second quarter growth than analysts had forecast.
Revenue of $603 million in the quarter rose 5% from one year ago, beating the consensus for $594M. Earnings were expected to be breakeven, but adjusted earnings before interest, taxes, depreciation and amortization was $27M. Ebitda income was down 65%.
Shares of Pinterest are down 14% in pre-market Friday.
The company announced an advertising partnership with Amazon.com (NASDAQ: NASDAQ:AMZN).
CEO Bill Ready said: “Today, we’re taking meaningful steps towards expanding our ads business by opening up third-party ad demand on Pinterest, starting with Amazon as our first partner. Looking forward, we are excited to further leverage and satisfy the strong commercial intent of our users and deliver long-term shareholder value.”
Monthly active users rose to 463M versus expectations for 454M.
The company said it expects second-quarter revenue to grow “roughly in-line” with the growth in the fourth quarter 2022 and first quarter this year. “We expect our Q2 non-GAAP operating expenses to grow low teens on a percentage basis quarter-over-quarter.”
Goldman Sachs analysts cut the price target to $29 per share but remains long-term positive on PINS stock despite "short term volatility."
"Long-term initiatives remain on track to contribute in future periods; b) mgmt. is balancing investments (incl. COGS tied to engagement) with commitment to margin expansion in ’23 & beyond; & c) user/engagement trends remain robust," the analysts said.
The analysts also weighed in positively on the Amazon partnership, which can server "as a positive catalyst that deliver both an optimized environment for ad impression/monetization and provide a benefit to shopping conversion and look to potential additional partnerships in the coming quarters."
Similarly, Stifel analysts cut the target to $22 per share but also reflected positively on the Amazon cooperation.
"We remain on the sidelines until there is more evidence that the well-received back-end work is translating into more meaningful ad budget allocations," the analysts said in a note.
Additional reporting by Senad Karaahmetovic