Pinterest surges following better-than-expected quarter
Pinterest shares soared nearly 17% in after-hours trading on Monday, after releasing quarterly results that beat expectations, a sharp rebound for a stock that had fallen about 20% YTD. The group generated revenue of $1.01bn in Q1, up 18% y-o-y, above the consensus, which was targeting $965.8m. Adjusted EPS reached $0.27, above the $0.229 expected.
Commercial momentum is driven by audience growth and improved monetization of the platform. Pinterest now has 631 million monthly active users worldwide, up 11% y-o-y, while average revenue per user rose by 6% to $1.61. Revenue (+18%) grew across all regions, with particularly strong growth in Europe (+27%) and the Rest of World (+59%), where monetization potential remains significant.
This release comes amid a relatively favorable environment for digital advertising, just days after solid results from Meta. The owner of Facebook, Instagram, and WhatsApp reported quarterly revenue of $56.3bn, up 33%, including $55bn in advertising revenue, showing that major advertisers continue to invest in platforms capable of improving targeting and conversion through artificial intelligence.
In his comments, CEO Bill Ready emphasized Pinterest's ability to transform inspiration into concrete action, while highlighting efforts undertaken to better convert user engagement into advertising revenue. This strategy notably relies on artificial intelligence and Performance+ campaigns, which now represent about 30% of lower-funnel advertising revenue.
Despite this well-received publication, Pinterest recorded a net loss of $73.6m, weighed on by restructuring charges related to the plan announced in January, which involves cutting nearly 15% of the workforce and reducing office space to reallocate more resources towards AI. For Q2, the group is targeting revenue between $1.133bn and $1.153bn, above current market expectations.
Pinterest, Inc. (Pinterest) offers visual search and discovery platform. The Company’s primary service, Pinterest, can be accessed through its mobile application or the Web. People use Pinterest to find ideas. As they browse Pinterest content, Pins, they fine-tune their tastes and find the idea. Users interact with the platform in multi-session journeys to find inspiration, curate their latest look, plan their next project and shop from brands. It has approximately 553 million monthly active users across the world. Content on Pinterest comes from a variety of sources, including retailers, brands, creators, publishers and users. It acquires that content via a range of methods, including product catalog uploads, direct publishing, and user curation. Content formats include images that allow the user to click into an idea to learn more, videos that provide the steps of an idea, and products that brands and merchants upload from catalogs.
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