Pinterest Tuesday stated advertisers had been slowing spending on the image-sharing firm due to the COVID-19 pandemic and reported a bigger-than-expected first-quarter loss as costs surged from new user additions, sending its shares down 18% in extended commerce.
Advertisers have pulled or cut advertising budgets to rein in costs because of the coronavirus-related uncertainty, impacting social media platforms along with Pinterest, Facebook, and Twitter, that rely on digital advertising sales.
Pinterest wrote that it saw a sharp deceleration in sales in the midst of March as advertisers responded to modifications in demand because of the virus pandemic.
Pinterest further stated earnings in April dropped 8%, in comparison with a year earlier.
The firm had withdrawn its full-year outlook in April, citing rising uncertainty because of the impact of the pandemic on the economic environment and its impact on advertiser demand.
The corporate, which calls its users Pinners, stated world month-to-month active users surged 26% to 367 million during the quarter, and it noticed record levels of engagement.
Pinterest’s Q1 income, nevertheless, leaped 35% to $272 million, and beat estimates of $270.1 million, as coronavirus-led lockdowns forced individuals to stay indoors and search engagement and entertainment online.
The use of social media apps has surged recently as the pandemic has pressured individuals to remain at home, and made them more and more reliant on these apps to stay connected.
Pinterest’s net loss widened to $141.2 million in Q1 ended March 31 from $41.4 million, a year ago.