Pinterest Q3 sales up 43 percent, advertising spending is booming in the Christmas season

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Pinterest was forecasting top ten percent revenue growth for the fourth quarter after online retailers who spent on ads before the holiday season helped the image sharing company beat quarterly estimates.

The company’s shares rose 6.5 percent after the bell on Thursday as increased demand from large retail advertisers and growth in international business added 43 percent to sales in the third quarter.

However, consumer product advertisers suffered from global supply chain constraints, which impacted Pinterest’s revenue growth rate.

In a conference call following the results, the company also said it had no material impact from Apple’s privacy changes, which have made it difficult for social media companies to target audiences and measure ad capacity.

The monthly active users of Pinterest (MAU), on the other hand, grew by only 1 percent to 444 million and missed the factset estimates of 460 million. Last year, the company saw a 37 percent increase as users who stayed at home turned to social media for entertainment.

“We believe the slowdown is due to the slowdown in the pandemic,” CFO Todd Morgenfeld said in an interview. Many GenZ users are returning to school, while others who used the app to explore cooking and home decor projects during the lockdown are now venturing more, he added.

Still, Pinterest’s quarterly revenue of $ 633 million (approximately Rs.4,708 billion) exceeded analysts’ average estimate of 630.9 million on Refinitiv’s IBES data.

The users, known as “pinners”, use the app’s shopping functions by 60 percent compared to the previous year.

Net income was $ 94 million (approximately Rs.698 billion) or 14 cents (approximately Rs.10 million) per share for the quarter ended September 30, compared to a loss of $ 94.2 million (approximately Rs.700 billion) or 16 cents (about 12 rupees) a share, a year ago.

Without items, it gained 28 cents (about 21 rupees) per share, up from estimates of 23 cents (about 17 rupees) per share.

© Thomson Reuters 2021

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