Pinterest revenue misses its own guidance range, with sales of $1.17bn short of the $1.19bn floor

Third-quarter revenue of $1.17bn fell below the bottom of the company's own August range, leaving a new finance chief and the AI shopping push to show growth can recover.

Pinterest missed on both lines in the third quarter, and the revenue shortfall is the part that matters: sales of $1.17bn came in under the bottom of the $1.19bn to $1.21bn range the company set itself in August, according to Investing.com. Earnings per share were $0.46, $0.03 short of expectations. A miss against management's own guidance is harder to excuse than one against analysts' estimates, because the company chose that bar.

The year-earlier quarter brought $1.05bn of revenue, according to MarketBeat, so growth continues but has slowed from the 18% reported for the second quarter, when revenue was $1,180 million.

For the fourth quarter Pinterest expects revenue of $1,425 million to $1,475 million and adjusted EBITDA of $538 million to $588 million. That outlook, more than the quarter, is what the shares will trade on. TIKR says the stock has fallen after four of its last five reports even though revenue beat estimates in four of them, and that it has followed the next-quarter outlook more closely. Options pricing before the report implied a move of about 10%, according to Yahoo Finance.

The gap that worries is between engagement and money. After the second quarter, Investing.com said clicks to advertisers were growing five times faster than revenue, which it described as monetization lagging engagement. Bill Ready, the chief executive, says AI-driven visual search and shopping are lifting value for users and advertisers as the company sharpens execution and scales performance advertising. This quarter says that case is not yet showing in revenue.

The timing is awkward for the new finance chief. Pinterest hired Dibbo from Amazon's advertising unit on a $19.98 million restricted stock package meant to signal confidence in ad monetization, and he started on October 26. A freshly expanded $700 million credit facility gives the company room to keep investing, but the fourth-quarter guidance is the first real measure of whether that spending can close the gap.