Snap, Pinterest Tumble As Costs Soar

Shares of social media networks Pinterest (PINS:US) and Snap (SNAP:US) trade around 18% in red on Friday, after both companies delivered soft earnings reports.

Pinterest reported a profit per share of $0.08 on revenue of $602.6 million, topping the analyst expectations for EPS of $0.03 on sales of $592.8 million.

Monthly active users (MAUs), a closely-watched metric for social media companies, rose to 463 million to top the 454.6 million expected. Pinterest said it generated average revenue per user (ARPU) of $1.32.

For Q2, the company expects revenue growth to be “in line with prior two quarters,” seen as soft by market commentators. 

“We expect our Q2 non-GAAP operating expenses to grow low teens on a percentage basis quarter-over-quarter,” the company also said. 

Similarly, Snapchat-operator said its year-over-year revenue fell 7% to $988.6 million, missing the analyst target of $1.01 billion. The weaker-than-expected performance was fueled by a 16% drop in North American sales.

Adjusted EPS was reported at $0.01, better than the expected loss per share of $0.05. Daily active users (DAUs) rose 15% YoY to 383 million, however, ARPU fell 19% to $2.58, below the expected $2.62.

The company’s “internal” guidance calls for Q2 revenue of $1 billion to $1.09 billion and adjusted EBITDA between negative $100 million to negative $50 million. Snap also said it expects to report DAUs of 394 - 395 million at the end of Q2. 

As a result, PINS and SNAP shares are now trading below 1.5% and below 2% in red year-to-date, respectively. 

Congress members Ro Khanna and Josh Gottheimer both reported transactions involving shares of these companies in 2023,  with the latter most recently acquiring Snap shares on January 31.