Pinterest Sees Strong Revenue Growth in Q3 and Expects 60% Sales Growth in Q4

Image-sharing company Pinterest reported third quarter financial results this week, with the stock soaring as much as 30% after hours on Wednesday.

The company posted strong revenue and user growth in the quarter. Adjusted earnings per share came in at 13 cents vs. 3 cents expected per Refinitiv. Revenue was $443 million versus $383.5 million per Refinitiv.

Looking forward, the company has informally projected a 60% sales growth for the current quarter. This compares to a 35% growth modeled by Wall Street analysts, according to Refinitiv data.

Pinterest however warned that it is continuing to navigate uncertainty given the pandemic.

The company had said it benefited as advertisers redirected spending to its platform following a social media ad boycott campaign that started this past July.

“Advertisers tell us that Pinterest is brand safe relative to other consumer internet platforms,” Chief Financial Officer Todd Morgenfeld said.

That boost may wane after the U.S. election cycle is over in November, Morgenfeld warned.

The company saw a growth of four million monthly active users (MAUs) in late September as well which coincided with younger users getting design ideas for customized wallpapers for Apple Inc’s new iOS version for iPhones.

“We expect these 4 million MAUs are more likely to churn in Q4,” Morgenfeld said.

Monthly active users jumped 37% to 442 million during the third quarter.

Revenue in the United States, the company’s largest market, saw a growth of 49% to $374 million. It reported average revenue of $1.03 per user, above FactSet estimates of 90 cents.

Pinterest’s total revenue skyrocketed 58% to $443 million, ahead of analysts’ estimates of $383.5 million.

President and CEO Ben Silbermann said on the earnings call, “In particular, we saw strong growth from resurrected users, as well as users under the age of 25, who grew twice as fast as users over 25. These users came looking for ideas as they adjusted to life during a global pandemic.
And with new tools like the Today tab, we help connect them to new use cases. Everything from home office setups to recipes to cook at home to different summer activities for kids.”

He added “We also continue to make our content more inspirational and one example of this is video, which offers pinners another dynamic and engaging way to discover ideas. During Q2, total daily video views, which include both organic and paid, grew over 150% year over year, and we’re looking to do more in this space. In addition, we also connected pinners to more shoppable content so they can turn their plans into a reality. We saw catalog uploads from businesses increased by more than 350% from Q1 to Q2, and we built new features like our Shop tab and the ability to shop from boards to make it easier for pinners to find this content.”

He continued, “So, in total, we’re making a lot of progress in helping pinners find inspiration for their lives. This is work that, in my mind, because of everything happening in the world is as meaningful and relevant as it has been in the last decade.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.