(Reuters) – Pinterest Inc reported its first full-year profit on Thursday as strong cash advertising boosted its fourth-quarter effects above Wall Street expectations and cushioned the blow from a shrinking user base.
Shares of the image-sharing company rose as much as 20% in prolonged trading, recovering after a dark query on Thursday in which tech stocks were rattled by Meta Platforms Inc’s disappointing earnings outlook and low user numbers.
Pinterest’s monthly active users (MAUs) also declined, falling 6% to the lowest level since June 2020, as pandemic-induced demand calmed.
But the company has stepped up its efforts to boost its ad revenue, focusing on scaling video features like Pinterest TV and Idea Pins, and bolstering influencer marketing in an area governed by YouTube, Instagram and TikTok.
Chief Financial Officer Todd Morgenfeld said Pinterest is investing in local video content and creator-driven content because it believes it increases engagement and revenue.
“Early knowledge makes us cautiously optimistic,” he said.
Pinterest’s earnings for the quarter ended Dec. 31 rose 20 million to $846. 7 million, beating analysts’ estimate of $827 million, according to Refinitiv IBES.
Snap Inc also reported effects on Thursday, as its advertising business recovered faster than expected from the effects of Apple Inc’s privacy changes.
However, Pinterest experienced a 12% drop in the US. In the U. S. , its domestic market, after some tweaks to Google’s set of search rules that limited traffic.
“The headwinds of engagement due to the search for adjustments to the rule set and the time spent on competing platforms are more persistent and can potentially alter overall seasonal trends,” Morgenfeld said.
Pinterest’s MAUs, a key metric showing engagement degrees in it, were 431 million for the quarter, with no estimates of 447. 95 million, according to FactSet.
Net revenue stream of $175 million, compared to $207. 8 million a year earlier.
Excluding items, it earned 49 cents per share, also above the forty-five cent estimate.
(Reports by Yuvraj Malik from Bengaluru; Edited via Devika Syamnath)
Subscribe
Subscribe to our explosion of news.