Pinterest's forecast disappoints investors looking for an advertising boost for the holiday season

(Reuters) – Pinterest's fourth-quarter revenue forecast failed to impress investors hoping for a boost from the holiday shopping season, as its larger online advertising sellers fared far better and the company's shares fell 12% in extended trading on Thursday .

The company also announced a new share repurchase program of up to $2 billion and terminated the September 2023 program that had $500 million available for repurchase.

Pinterest's results follow quarterly reports from digital advertising leaders – including Google parent Alphabet, Meta Platforms, Reddit and Snap – which posted positive revenue in the third quarter thanks to robust advertising spending.

Pinterest released the Performance+ suite in October to better engage users by improving advertising campaigns with new AI tools and automation features on the platform.

“Performance+ is still in the early adoption phase as many advertisers limit budget shifts and new feature launches during the holiday peak period,” CFO Julia Donnelly said in a post-earnings conference call.

The company is also seeing “softening” among food and beverage advertisers, Donnelly said.

Pinterest forecast fourth-quarter revenue between $1.13 billion and $1.15 billion, with the midpoint in line with analysts' average estimates of $1.14 billion, according to data compiled by LSEG.

The company's revenue rose 18% to $898.4 million in the reported quarter, compared to estimates of $896.4 million.

Adjusted earnings per share for the quarter were 40 cents, compared with estimates of 34 cents.

The platform's global monthly active users rose 11% to 537 million in the July-September period, compared with estimates of 531.5 million.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Shailesh Kuber)