Shares of the San Francisco, California-based company fell more than 14% in extended trading.
Pinterest faces competition from the likes of TikTok and Meta Platforms-owned (META.O) Facebook and Instagram, which have become the go-to platforms for advertisers in an uncertain economy because of their more extensive user base and higher engagement for target ads.
Ad spending in the shopping category, which is generally a large advertiser in the quarter, grew by less than 1% sequentially, market intelligence firm Sensor Tower told Reuters on Tuesday.
Pintrest's software and gaming categories in the U.S. saw sequential increases of 34% and 22% respectively in the fourth-quarter.
Rival Snap (SNAP.N) missed Wall Street estimates for quarterly revenue earlier in the week, as the Snapchat owner has also struggled to compete against larger rivals for digital advertising dollars.
Global monthly active users (MAUs) on the platform, which lets users create online pinboards, rose by 11% to 498 million in the fourth quarter compared with estimates of 484.5 million.
Pinterest posted revenue of $981.3 million for the fourth-quarter ended Dec. 31 missing market estimates of $990.6 million.
