- Pinterest shares sank to a two-month low Friday after the company said it lost active users in the second quarter.
- Easing COVID restrictions led more people to take up other activities away from social media.
- Second-quarter adjusted earnings of $0.25 a share handily beat expectations of $0.13 a share.
- See more stories on Insider’s business page.
Pinterest shares tumbled to a two-month low on Friday, with a double-digit percentage decline induced by a quarterly loss in active users on the social media site as easing of COVID-19 restrictions led more people to engage in other activities.
Shares of Pinterest plunged 19% to a session low of $58.13, the lowest price since May 19. The stock this year has lost roughly 11% but has shot up by 71% over the past 12 months.
Pinterest late Thursday reported second-quarter adjusted earnings and revenue well ahead of Wall Street’s targets. But the company, whose online platform allows people to save and share pictures and videos, posted a 5% decline in monthly active users, to 454 million from 478 million in the first quarter.
The decline has stretched into this month, with US monthly active users down by 7% as of July 27. Global active users, meanwhile, have increased by 5% year over year.
A ramp-up in COVID-19 vaccinations this year has led more businesses to reopen their doors, pulling attention away from Pinterest’s site.
“Since mid-March, however, we believe engagement on Pinterest was disproportionately lower as people began spending more time socializing with friends outside their homes, eating in restaurants, and generally participating in activities that are not our core use cases,” the company said in its letter to stakeholders.
The company said it wouldn’t provide third-quarter guidance on monthly active users because it lacks visibility into some key drivers of engagement as the COVID-19 pandemic and related restrictions evolve. Coronavirus cases recently have been rising in all 50 states because of the highly transmissible Delta strain.
For the second quarter, Pinterest swung to adjusted earnings of $0.25 a share, trouncing the FactSet estimate of $0.13 cents a share. Total revenue more than doubled to $613.2 million on stronger demand from large retail advertisers and growth internationally, outstripping the $562 million estimate from FactSet.