Over the last year, Wall Street has had its doubts about Pinterest’s (PINS) ability to monetize its massive base of users – and for good reason. The online scrapbooking site has been around since 2010 and it has yet to report an annual profit, much less break even and turn a profit. As an internet company, Pinterest was at the mercy of the trend of users spending more time on social media and less on search engines or e-commerce sites.
Following the release of the company’s third-quarter earnings, Pinterest shares increased by over 12% in extended trading.
Here is how the business fared.
Refinitiv reports that earnings came in at 11 cents per adjusted share compared to the predicted 6 cents per adjusted share.
Refinitiv estimates that revenue was $684.6 million as opposed to the $666.7 million forecast.
Pinterest reported an 8% year-over-year increase in sales with a $65 million loss.
At 445 million, the company’s average monthly user base remained almost stable.
According to Pinterest’s statement, “our current projection is that Q4 2022 revenue will rise in the mid-single digits on an annual percentage basis, which takes into account slightly stronger foreign exchange headwinds than in Q3 2022.” “We anticipate low double digit quarterly growth in our non-GAAP operational expenditures for Q4 2022.
The business also stated that operational expenditures should increase by about 35% from year to year in 2022.
In contrast to the general trend of online advertising firms, Pinterest’s most recent earnings report outperformed analysts’ forecasts. Businesses have cut back on their internet advertising budgets because to worries about a potential recession, which has an impact on many organisations, including digital behemoths like Meta and Alphabet.
Investors were on the lookout for any encouraging indications after other competitors missed on their separate earnings releases, despite Pinterest’s third quarter revenue growth rate of 8% being far lower than the 43% growth rate it recorded the prior year in the same period.
For instance, shares of Snap fell more than 30% last week the day after the firm revealed a $1.13 billion sales shortfall.
This week, Alphabet followed suit by announcing third-quarter revenue growth that was down from 41% to 6% year over year and advertising sales in its YouTube segment that fell short of analysts’ expectations by 2% to $7.07 billion.
The next day, Meta reported its second consecutive quarter of declining revenue and provided dismal fourth-quarter projections, preparing investors for yet another quarter of declining sales. The day after the parent company of Facebook released its quarterly earnings, shares fell 24%.