Pinterest CFO Julia Donnelly is leaving to join an early-stage company

Pinterest’s chief financial officer is leaving for a private, early-stage company, and investors reacted quickly. Julia Donnelly will step down on October 30, Reuters reported, with the company’s shares falling as much as 3.8% in after-hours trading on Friday.

Donnelly joined Pinterest in 2023 from Wayfair, where she was global head of finance, and has been the company’s CFO for roughly three years. Pinterest has started an external search for a permanent successor, while Vikram Naidu will take over as principal financial officer on an interim basis from the same date.

Naidu, 40, has been Pinterest’s vice president of finance and business operations since March 2024. Before joining the company, he worked at Verkada and Lyft, where he led financial planning and analysis.

The 8-K records that Donnelly’s departure was not the result of any disagreement with Pinterest over the company’s operations, policies, or practices. That is standard language in an executive departure filing, but it matters here because the filing gives no indication of a dispute or internal conflict behind the move.

Bill Ready, Pinterest’s chief executive, credited Donnelly with helping the company deliver eleven consecutive quarters of double-digit revenue growth. She will remain through October to support what Pinterest describes as an orderly transition.

The financial results behind that run are strong. Second-quarter revenue reached $1.18 billion, up 18% year over year, while global monthly active users reached a record 640 million.

Cash generation has been particularly strong. Adjusted EBITDA was $311 million, representing a 26% margin, while free cash flow reached $270 million, even as Pinterest reported a GAAP net loss of $47 million.

That net loss needs some context. Share-based compensation can push otherwise cash-generative consumer technology companies into GAAP losses, making free cash flow a more useful measure of the underlying business in this case.

Pinterest has been putting that cash back into the company, completing more than $2 billion in share repurchases so far this year at an average price of $18.17. The pace of those buybacks reflects management’s view that the stock is worth buying at those levels, although the decision also leaves the next finance chief with a significant capital allocation programme already under way.

The more complicated part of the picture is the outlook. Pinterest expects third-quarter revenue of between $1.19 billion and $1.21 billion, representing growth of 13% to 15%. That would mark a noticeable slowdown from the 18% growth reported in the second quarter.

Part of the pressure comes from the advertising market in which Pinterest operates. It competes for budgets with platforms that are many times its size, while Meta is on course to overtake Google in digital advertising revenue this year, with Instagram accounting for much of that growth.

Pinterest occupies an awkward position within that market. It is large enough to matter to advertisers, but lacks the scale of the biggest platforms, leaving it more exposed when competitors improve their targeting, measurement or ability to capture advertising spend.

Two deals completed during Donnelly’s tenure will also shape the company after she leaves. Pinterest acquired tvScientific as it expanded into connected TV advertising, and signed a $4 billion cloud services partnership with Amazon Web Services.

A commitment of that size is something a CFO negotiates but a successor has to manage. It also represents a significant long-term obligation at a time when the company’s revenue growth is beginning to slow, creating one of the clearest financial tensions for the incoming CFO.

The interim appointment offers another clue about how Pinterest is approaching the transition. By putting an internal finance executive in place while conducting an external search, the company can preserve continuity in the short term while leaving itself room to bring in a different kind of finance chief for the next stage of its growth.

Ready has increasingly framed artificial intelligence as a source of acceleration for Pinterest, describing it as a clear accelerant for the business during the company’s most recent earnings call. The question for investors is whether that investment eventually shows up in the growth rate, rather than remaining primarily part of the company’s narrative around its future.

Donnelly’s move to an early-stage private company is another interesting part of the story, although it does not necessarily say anything negative about Pinterest. Finance executives moving from established public companies into startups has become a more common trade-off in recent years, exchanging the relative security and liquidity of a public company for the greater risk and potential upside of an earlier-stage business.

The 3.8% decline in Pinterest’s shares is therefore difficult to read as a judgement on Donnelly herself or on the company’s financial position. It is a relatively immediate reaction to the loss of an executive who has been responsible for explaining those numbers to investors for the past three years, at a moment when the business is still growing strongly but the rate of that growth is beginning to come down.