Pinterest Beats Earnings Expectations

The popular social media platform, Pinterest, reported impressive third-quarter earnings on Monday, surpassing expectations from analysts. As a result, the company’s stock soared more than 11% in after-hours trading.

Financial Results

• Income: $763.2 million, beating the expected $743.5 million.
• Earnings per Share: 28 cents (adjusted), exceeding the projected 20 cents.

Strong Growth in Revenue and User Base

Pinterest experienced a remarkable 11% increase in revenue compared to the third quarter of the previous year, reaching $684.6 million. Additionally, the number of monthly active users rose by 8% to 482 million, surpassing analysts’ expectations of 473 million. The average revenue per user came in at $1.61, higher than the projected $1.59.

Positive Outlook from Pinterest CEO

Bill Ready, CEO of Pinterest, expressed optimism about the company’s future prospects, stating that they have found their best product-market fit in years. He emphasized Pinterest’s unique value as a visual search, discovery, and shopping platform. Ready also highlighted improved measurement and innovation, resulting in better results for advertisers.

Fourth Quarter Outlook

Pinterest anticipates a growth range of 11% to 13% for the fourth quarter, surpassing analyst estimates of 11.3% growth.

Comparisons with Meta and Snap

Last week, Meta (formerly Facebook) reported strong third-quarter financial results. However, its stock price dropped due to concerns about softer ads in the beginning of the fourth quarter caused by the Israel-Hamas war. Snap also faced detrimental effects from the conflict, resulting in breaks in spending from advertising campaigns. Both Meta and Snap adjusted their revenue guidance due to the unpredictable nature of the situation.

Financial Performance and Future Expenses

For the third quarter, Pinterest reported a net income of $6.73 million, a significant improvement compared to the loss of $65.2 million in the same period of the previous year. The company’s expenses rose slightly to $768.2 million. However, Pinterest expects a decline in its non-GAAP operating expenses for the fourth quarter of 2023.

Conference Call with Analysts

Pinterest executives will hold a conference call with analysts on Monday at 4:30 pm ET to discuss the company’s financial results and future plans.

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