Pinterest (NYSE:PINS) saw its shares drop more than 11% in U.S. premarket trading on Friday after the social media platform missed expectations for second-quarter revenue in its largest market, prompting concern among analysts.
Analysts at Stifel highlighted that Pinterest’s sales performance in the U.S. and Canada lagged behind other digital advertising players. They pointed to a policy change by the Trump administration that removed tariff exemptions for low-value imports as a key factor weighing on ad demand in the region. The policy shift, which scrapped the so-called “de minimis” rule, disproportionately affected Asian exporters that had been major advertisers on the platform.
As a result, Pinterest reported an 11% year-over-year rise in U.S. and Canadian revenue to $745 million—slightly below Wall Street’s forecast of $747 million. Analysts had been expecting stronger results in those markets after solid showings from other ad-driven companies like Meta (NASDAQ:META), Alphabet (NASDAQ:GOOGL), and Reddit.
“Demand in the key region had been impacted by the Trump administration’s move earlier this year to suspend an import tariff exemption for items below a certain value shipped to the United States,” Stifel analysts noted. “The halt to the so-called ‘de minimis’ exception has particularly impacted low-cost exporters out of Asia, which led to a downturn in advertising spending by these firms with Pinterest.”
Despite this headwind, Stifel said that some Asian e-commerce advertisers had begun redirecting budgets to other geographic regions, which somewhat cushioned the decline in U.S. spending.
Total revenue for the quarter came in at $998 million, beating expectations of $975 million, even as ad pricing declined. Adjusted EBITDA stood at $251 million, also ahead of projections.
Pinterest’s monthly active users reached 578 million, surpassing forecasts. Stifel credited the rise to Gen Z engagement and new artificial intelligence-driven features on the platform.
Looking ahead, Pinterest forecast third-quarter revenue between $1.033 billion and $1.053 billion, roughly in line with analysts’ estimate of $1.03 billion. The company expects adjusted EBITDA to land between $282 million and $302 million, representing a 28% margin at the midpoint—just shy of the 28.4% analysts had anticipated.
Pinterest continues to face an uncertain economic climate, with advertisers taking a cautious approach as they assess the broader implications of ongoing U.S. trade policies.
“There still remains some uncertainty in planning for advertisers relating to the macro in the third quarter,” Stifel analysts said.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.