Shares in Reddit and Pinterest sank in U.S. premarket trading Friday after quarterly results showed global audience growth but raised questions about traffic and near-term revenue. Reuters reported Reddit fell 23% and Pinterest 8%.
Reddit’s third-quarter revenue increased 53% year over year to $895 million, while advertising revenue rose 54% to $847 million. Its global daily active uniques averaged 130.3 million, up 12% from a year earlier; the U.S. count fell 2% to 50.7 million.
The company forecast fourth-quarter revenue of $1 billion to $1.03 billion. Investing.com reported that the range was below Wall Street’s $1.05 billion estimate. The release did not include an analyst comparison.
Reuters reported that Reddit CEO Steve Huffman told investors the platform was receiving, on average, more than 1 million fewer search referrals per week during October. He said a low double-digit decline in daily active uniques was possible in the fourth quarter if the pattern continued. Reddit gave no formal user forecast.
Pinterest’s third-quarter revenue rose 12% year over year to $1.174 billion, and monthly active users increased 10% to a record 661 million. Reuters reported revenue missed the LSEG-compiled analyst estimate of $1.21 billion. Pinterest projected fourth-quarter revenue of $1.425 billion to $1.475 billion, equal to year-over-year growth of 8% to 12%; Reuters said the range was below Wall Street expectations.
In Europe, Pinterest monthly active users rose 7% to 161 million. Revenue was $193 million, unchanged year over year on a reported basis, while average revenue per user fell 7% to $1.21.
Pinterest CEO Bill Ready said on the Oct. 29 earnings call that a change to the EU de minimis exemption led cross-border sellers to pull back more than expected. He estimated that the pullback explained about half of the six-point slowdown in global revenue growth between the second and third quarters. Ready said it was expected to keep weighing on international revenue in the fourth quarter.
