(Reuters) -Pinterest beat analysts' estimates for second-quarter revenue on Thursday, as increased marketing spend on the platform was fueled by its artificial intelligence-powered advertising tools.
However, shares of the company fell around 8.2% in extended trading. The stock has risen about 35% so far this year.
The social media platform’s rapid growth among Gen Z users—who now represent more than half of its user base—combined with the AI-powered tools for personalized and automated campaigns,
has made the platform attractive to advertisers.
Pinterest's results follow Meta and Reddit's strong second quarter performance last week. In contrast, Snap reported its slowest quarterly revenue growth in over a year.
The company's focus on direct-response ads, designed to prompt specific actions like shopping, app downloads, or website visits, continued to drive ad demand.
"We’ve found our best product market fit ever by becoming a personalized shopping destination for users and an AI-powered performance platform for advertisers," CEO Bill Ready said in a statement.
Pinterest has third-party ad deals with Google, Amazon.com and advertising platform Magnite.
Revenue for the second-quarter grew 17% to $998.2 million, beating analysts' average estimate of $974.8 million, according to data compiled by LSEG.
Global monthly active users on the platform rose 11% to 578 million, exceeding estimates of 553 million.
Pinterest expects third quarter revenue to be between $1.03 billion and $1.05 billion, compared with estimates of $1.03 billion.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Tasim Zahid)
