Pinterest up 20% on revenue not as bad as expected

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If Pinterest is the leader in consumer spending, then so far things are not going well. However, investors in the social network rallied as second-quarter revenue was roughly in line with expectations and the decline in user numbers wasn’t as bad as they thought. This does not mean that Pinterest earnings were good. pinterest missed earnings and posted zero user growth in the most recent quarter, citing a combination of factors including the ongoing effects of the pandemic, declining search engine traffic, the rise of TikTok and, like many companies relying on digital advertising, broader macroeconomic uncertainty that has slammed other tech stocks. , including Meta, Twitter and Snap.

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Last week’s meta delivered its first quarterly decline in revenue, while Snap skipped and rejected to predict its future results. Twitter, amid disputed acquisition by Elon Musk, also fought back advertiser exit due to uncertainty about Musk’s sale.

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Meanwhile, Pinterest posted its rather disappointing second-quarter results, with revenue up 9% year-over-year to $665.9 million, below Wall Street’s estimate of $667 million. Or, as The Wall St. journal, it was lowest revenue growth in two years. The company also posted a new loss of $43.1 million and adjusted earnings of 11 cents per share from the prior year. Expected 18 cents. More worryingly, the company has told investors that third-quarter revenue growth will be in “mid single digits” when analysts forecasting revenue growth of 12.7%.

Users numbers remained unchanged at 433 million monthly assets – same number it reported in the previous quarter and was down 5% year on year. However, it was one of the few bright spots amid the disturbing news as analysts predicted a larger drop to 431 million users.

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Shares jumped on news that losses weren’t as big as expected and because revenue was close to expectations. After hours, stocks are up more than 20% as Pinterest also benefited from Investor Praise Elliott Management, which the recently acquired more than 9% of the shares in company. (Pinterest confirmed the investment on the earnings report.)

In its letter to shareholders, Pinterest acknowledged that “work needs to be done to increase the number of users”, especially in mature markets in the US, Canada and Europe.

It was also the first quarterly profit according to new Pinterest CEO Bill Readywho joined the social media image-sharing service after previously leading payments and commerce at Google and prior to that serving as chief operating officer at PayPal.

Ready spoke about his plans for the future of Pinterest with optimism and urgency, calling it a “unique platform” that needs to be made more attractive to advertisers and content creators alike. His letter also spoke of the threat posed by short videos such as TikTok, which were listed as a headwind among competition factors.

“It is clear… that the market is rapidly evolving and we should be doing the same,” Ready wrote.

The company is in transition not only because of TikTok, but also because TikTok represents a broader market transition to video as an input to e-commerce transactions, while Pinterest’s roots were in being an image bookmarking site. Traditional social networks are also giving way”recommendation mediawhere creator-filled feeds are driven by algorithms, not by friends’ posts.

Pinterest is trying to cope with this change by engaging creators and offering new video creation tools. The company said it expects its operating expenses to rise in the low double-digit quarter-on-quarter in the third quarter due to the brand’s new global marketing campaign, which it intends to launch in mid-September and run until the end of October. The company said it will continue to invest in native content and creator efforts.

Not all…


Credit: techcrunch.com /

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