Pinterest is winning over Gen Z and finding success with AI, but the stock price is down double digits today

Pinterest reported its second-quarter earnings on Thursday, August 7, and, in many ways, it was good news—though you wouldn’t know it from how much its shares have dropped. Here’s what to know:

What did Pinterest report?

The social media company’s global revenue rose to $998.2 million from $853.6 million year-over-year (YOY). The 17% jump beat Wall Street’s expectations of $975 million, according to consensus estimates cited by CNBC. Its net income also increased by 336% YOY, to $38.8 million from $8.9 million. 

Moreover, Pinterest also projected a better-than-expected third quarter, with revenue between $1.03 billion and $1.05 billion. 

Plus, it’s doing well when it comes to actual users, particularly younger ones. Pinterest reports an 11% increase YOY, coming in at 578 million global monthly active users. According to Pinterest CEO Bill Ready, over 50% of those users are Gen Z.  

What has the CEO said about the earnings?

“Three years into our business transformation, I’ve never been more confident in Pinterest’s ability to deliver for our users and advertisers,” Ready said in a statement. “We’ve found our best product market fit ever by becoming a personalized shopping destination for users and an AI-powered performance platform for advertisers. With this focus, we believe we’re well-positioned to further capture market share.”

Ready further called Pinterest an “AI winner” in an earnings call, stating that the technology is “deeply integrated” throughout almost every aspect of the company.

This quarter, it launched a new “proprietary generative retrieval model” for search, built in-house. 

“Due to the sophistication of this model and the breadth of content and activity [it] is trained on, it can recommend more relevant and deeply personalized content for our users while also balancing the distribution of fresh content,” Ready said. 

How is the stock performing after the earnings?

Not well. Alongside all of Pinterest’s great news was lower-than-expected earnings per share. The company reported adjusted EPS of 33 cents, rather than the 35 cents that Wall Street expected.

Pinterest’s stock (NYSE: PINS) was down more than 13% in premarket trading on Friday as of this writing.

Julia Brau Donnelly, Pinterest’s CFO, added that advertisers are also worried about tariffs and market uncertainty.

“As we talk to advertisers about Q3, we do hear that some of that tariff-related and broader market uncertainty has continued into how they’re thinking about spend for Q3, though this varies by advertiser,” she said during the call. “Again, it’s definitely a relatively more constructive environment than feared.”