2 years ago
114 The image-sharing platform Pinterest Inc (PINS.N) benefited from higher ad spending by businesses, sending its shares 9% higher in extended trading. In that context, its first-quarter revenue and profit surpassed market estimates on April 27.
In the early months of the pandemic, Pinterest –like its peers– posted strong user growth as home-bound consumers sought projects to keep themselves entertained. With the easing of lockdowns, however, that boom has faded, prompting the company to double down on efforts to grow its ad business.
Steered by strength in the international business and retail advertising, revenue grew by 18% in the first three months of the year to $575 million. According to Refinitiv IBES data, analysts on average were expecting a figure of $572.5 million.
On a post-earnings call, Chief Financial Officer Todd Morgenfeld said:
“We benefited significantly from strength in retail. And I would imagine that based on what we’re seeing that, that will continue.”
User growth in the younger demographic, especially Gen Z, was pointed to by company executives. The company posted a rise in mobile app monthly active users (MAUs), the group which accounts for most of its revenue, although its overall MAUs declined 9% to 433 million.
However, Pinterest’s revenue growth projection of 11% for the second quarter was below market expectations. Echoing commentary from larger peer Meta Platforms Inc (FB.O), the company blamed the weakness on the Ukraine crisis.
The impact of the Ukraine conflict on digital ad spending has also been highlighted by recent earnings reports from Snap Inc (SNAP.N) and Google parent Alphabet Inc (GOOGL.O).
On an adjusted basis, Pinterest exceeded Wall Street estimates of 4 cents per share by earning 10 cents per share in the first quarter.
