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Pinterest Profit Miss Overshadows Strong Gen Z User and AI-Driven Growth

Pinterest reported second-quarter results that missed profit expectations, causing shares to drop over 11% in after-hours trading despite strong revenue and user growth. The company posted adjusted earnings per share of 33 cents, below analysts’ estimate of 35 cents.

Pinterest’s revenue grew 17% year-over-year to $998.2 million, surpassing expectations of $974.8 million. The platform’s user base has expanded significantly, with Gen Z now making up more than half of its users, fueling growth. Additionally, Pinterest’s AI-powered advertising suite, Performance+, has gained traction among mid-market advertisers, cutting campaign creation times by half.

Looking ahead, Pinterest forecast third-quarter revenue between $1.03 billion and $1.05 billion, roughly in line with analyst expectations but signaling no acceleration from the previous quarter’s growth rate. Analysts noted that high market expectations may have contributed to the selloff following the earnings report.

The company faces competitive pressure from peers like Meta and Reddit, which reported strong quarterly results, while Snap saw its slowest revenue growth in over a year. Changes in U.S. import duty rules also tightened advertising budgets for smaller platforms like Snap, indirectly benefiting larger platforms like Pinterest.

Pinterest’s ad pricing fell 25% year-over-year, impacted by a growing share of international ad impressions where rates are lower. The company’s monthly active users (MAUs) reached 578 million, up 11% year-over-year and beating estimates, though user growth slowed compared to the previous quarter.

Analysts suggest that Pinterest’s user base may be nearing saturation despite ongoing AI enhancements aimed at driving growth.

Pinterest Forecasts Strong Q1 Revenue, Shares Surge on AI Advertising Boost

Pinterest (PINS.N) announced Thursday that it expects first-quarter revenue to exceed market expectations, with a forecast between $837 million and $852 million, driven by the platform’s AI-powered advertising tools. The forecast came after a successful fourth-quarter performance, with record monthly active users and revenue, bolstered by a strong holiday shopping season.

Pinterest’s Performance+ suite, which leverages artificial intelligence to help advertisers target users more effectively, has become a major driver of ad spend. CEO Bill Ready highlighted the platform’s increasing engagement, stating that users are visiting Pinterest more frequently and finding the platform more actionable. The growth is particularly fueled by a rise in Gen Z users and the expansion of shoppable content, making Pinterest increasingly appealing to marketers.

The platform is also benefiting from growing third-party ad deals with major players like Google and Amazon, helping to diversify Pinterest’s revenue streams. However, experts note that ad spend remains heavily concentrated in North America, and the company has historically been slow to execute on expanding these third-party integrations.

Pinterest’s global monthly active users reached 553 million, surpassing estimates of 545.8 million, marking an 11% increase from the previous year. Despite an 18% year-on-year revenue growth to $1.15 billion in Q4, the company’s adjusted profit per share of 56 cents missed analyst expectations of 65 cents due to tax adjustments.

 

Study Finds Chimpanzees Perform Better on Tasks When Observed by Humans

Chimpanzees have demonstrated improved performance on challenging tasks when they are observed by humans, according to a study published in iScience on November 8. Conducted at Kyoto University, the research focused on chimpanzees performing number-based tasks on touchscreens. The study found that their task performance improved with increased task difficulty when a greater number of human observers were present. However, for simpler tasks, chimpanzees performed worse when observed by larger audiences, suggesting that the presence of humans has a complex impact on their behavior and task outcomes.

The study, led by Shinya Yamamoto and Akiho Muramatsu, sought to explore whether chimpanzees experience what is known as an “audience effect,” a phenomenon often associated with humans who modify their behavior based on the presence of others. In this case, the researchers were interested in understanding if chimpanzees, who are regularly exposed to human interaction, would exhibit a similar response. The study’s participants were chimpanzees familiar with touchscreen tasks and accustomed to receiving food rewards for correct answers. The comfortable relationship between the animals and humans allowed the researchers to assess how the presence of an audience might affect the chimpanzees’ performance.

Over six years and thousands of experimental sessions, the researchers measured the chimpanzees’ ability to complete tasks of varying difficulty levels. The results were striking: chimpanzees performed better on more complex tasks when watched by a larger human audience. However, their accuracy declined when performing simpler tasks in the presence of more observers. This nuanced response challenges previous assumptions about animal cognition, suggesting that chimpanzees are capable of some level of social awareness, similar to the audience effects seen in humans.

This finding sheds light on the cognitive abilities of chimpanzees and raises interesting questions about the role of social dynamics in animal behavior. The researchers’ conclusion that chimpanzees may adjust their performance based on the presence of others opens up new avenues for studying animal intelligence and social interaction. The study suggests that, like humans, chimpanzees may be influenced by the social context in which they perform tasks, revealing a more complex and socially-aware animal behavior than previously understood.