Pinterest Stock Plunges 15% As Q1 Losses Three-Times Higher Than Expected

The shares of the social network Pinterest fell 15 percent Thursday soon after its first-quarter 2019 earnings report came out, first time after becoming a public company.

Pinterest went public in April at $19 a share. The stock plunge may erase $2.5 billion from Pinterest’s market cap taking it to $14 billion.

The loss per share at 32 cents was almost three times more than the 11 cent loss analysts had expected. But the revenue $201.9 million for the quarter was better compared to estimates of $200.6 million, according to Refinitiv.

The net loss was $41.4 million, or 33 cents a share. The revenue for the same quarter a year ago was from $131 million documented during the filings for its IPO.

After adjustments, the company said losses will be 32 cents a share. Analysts had expected adjusted losses of 11 cents a share on sales of $200.7 million, per data by FactSet.

The revenue guidance for the whole of 2019 was solid at $1.06 billion. It may be the first time Pinterest would generate at least $1 billion in revenue for the whole year.

Pinterest gained 22 percent more global monthly active users (MAU) for the quarter at 291 million, compared to the same period last year.

The global average revenue per user (ARPU) also jumped 26 percent vis a vis the same period last year. It soared to 73 cents in Q1 of 2019 from the 58 cents in Q1 2018.

Chief Executive Ben Silbermann highlighted that Pinterest nearly doubled the number of international markets where it has been serving ads, from 7 until last year to 13 now.

However, Silbermann clarified that he is not expecting Pinterest’s international hiring and expansion efforts to reflect in the financials at least until next year.

“I wouldn’t expect material financial results from international efforts to accrue to the company’s benefit until 2020, and through the course of the year, I would expect that to accelerate,” he added.

On a call with analysts, CFO Todd Morgenfeld noted that bulk of the company’s international growth came from English-speaking countries like the U.S, U.K., and Canada, and the current focus is an expansion in Europe.

Better placed than many neo-listers

Despite the stock crash, the digital pinboard company is better off than many newly listed tech companies.

Pinterest’s results showed it has been spared from the woes of bumpy stock market debuts of peers like ride-hailing giant Uber and rival Lyft.

Pinterest was able to narrow the losses than a year before after improving revenue by more than 54 percent. But the handicap was in earnings per share (EPS) that fell below the expectations of Wall Street.

Small tech companies that are not losing much money are seeing their share prices soaring after IPOs. They include Zoom, PagerDuty, and Beyond Meat.