Pinterest surges on July sales lift as advertisers, users return
Pinterest Inc. surged as much as 30 percent in early trading Friday after it said revenue in July jumped from a year earlier as advertisers and users returned to the social-sharing service.
The company estimated year-over-year sales growth of about 50 percent for this month, through July 29. “We are encouraged by the performance of our business,” it said in a statement on Friday. “But a tremendous amount of uncertainty remains given the ongoing COVID-19 pandemic and other factors.”
For the whole of the third quarter, Pinterest expects sales to grow in the mid-30 percent range, year over year. The shares rose as high as $32.87 in pre-market trading after closing at $25.29 on Thursday in New York. They had gained about 35 percent this year through Thursday.
The San Francisco-based company lets users “pin” photos, web links and other content to digital boards with different themes. The app is popular among fans of fashion, home decorating, cooking and other hobbies. During the COVID-19 pandemic, Pinterest has attracted more users, but it has suffered financially as some advertisers cut spending.
On Friday, the company had better news, saying second-quarter advertiser growth accelerated year over year. Spending by small and medium-sized marketers comprised almost half of revenue, thanks to better automated buying tools and momentum overseas.
Revenue came in at about $272 million in the second quarter, up 4 percent from a year earlier and ahead of Wall Street estimates, according to data compiled by Bloomberg.
“I’m pleased with the way we responded and remained engaged with our advertising partners,” said Chief Financial Officer Todd Morgenfeld. “It has been encouraging to see the recovery in our business over the past few months.”
The company also said it had 416 million monthly active users, up 39 percent from a year ago and again above analysts’ expectations. Growth was particularly strong in the U.S., driven by existing users returning to the service. However, the company expects slower growth in monthly active users going forward.
“In these tough times, we’re seeing more and more people rely on Pinterest to cook at home, plan kids activities and set up a home office,” Ben Silbermann, chief executive officer of Pinterest, said in a statement. “Businesses are helping them turn their ideas into reality as people are increasingly discovering and buying products on Pinterest.”