Pinterest, Inc. shares plummeted 8.44% in the 24-hour period ending Tuesday evening, as investors reacted to the company’s second-quarter earnings report released after the market close. The sell-off came despite Pinterest reporting better-than-expected Q2 results, with revenue of $1.18 billion and adjusted earnings of $0.43 per share, surpassing analyst estimates of $1.15 billion and $0.36 respectively.

The sharp decline was driven primarily by the company’s third-quarter revenue outlook, which forecast revenue between $1.19 billion and $1.21 billion, implying year-over-year growth of 13% to 15%. This represents a significant deceleration from the 18% revenue growth achieved in the second quarter, disappointing investors amid intensifying competition for digital advertising dollars from larger rivals such as Meta's Instagram, Reddit, and Google. Additionally, Pinterest swung to a GAAP net loss of $46.67 million in Q2, weighed down by elevated share-based compensation expenses and restructuring costs, which further pressured the stock.

During the post-earnings call, CFO Julia Donnelly highlighted incremental pressure from Asia-based cross-border retailers impacted by regulatory actions in Europe, noting that this headwind is expected to continue into the third quarter. The company also benefited from one-time factors in Q2, including World Cup-related advertising spend and the shift of Amazon Prime Day from Q3 to Q2, which will not repeat, adding to concerns about the sustainability of recent growth momentum.