Pinterest Inc. ended its resounding 2020 by adding a record of over 100 million users in the year and posting 76% year-over-year growth in fourth quarter revenue with the strength of holiday retail, the company said Thursday. market.
Pinterest PINS,
shares rose sharply, reaching 10% after hours, after rising 0.9% in the regular session, closing at $ 77.85.
The online pinboard company, which said its global monthly active users increased 37% year over year to 459 million, reported fourth quarter net profit of $ 207.8 million, or 30 cents per share, compared to a loss of $ 35.7 million, or 6 cents a share, over the past year. Adjusted earnings were 43 cents per share, adjusted for share-based compensation and more. Revenue increased to $ 705.6 million from $ 399.9 million in the same quarter last year. Analysts surveyed by FactSet predicted earnings of 34 cents per share and revenue of $ 645.7 million.
In the company’s press release, Chief Financial Officer Todd Morgenfeld attributed a “remarkable year of growth” to “continuous product innovation, execution and a longer and earlier holiday season”.
Pinterest made pins more “buyable” and launched new formats, like video, while trying to make its platform more engaging, and Chief Executive Ben Silbermann promised more efforts in these areas.
In addition to investing in automated advertising tools, he said the company plans new technologies and products “to improve the way people explore and find the products they love with tools … [to] visualize and plan ”, citing a tool that allows the user to experience the shadow in the Pinterest app, for example.
In the entire year, the company had a loss of 22 cents per share and revenue of $ 1.69 billion. Analysts had predicted a loss of 35 cents per share on revenue of $ 1.6 billion.
In the San Francisco-based company’s earnings conference call, Morgenfeld said he expects first quarter revenue to grow by about 70% year over year, but said he would be “eyeing the impact of COVID on engagement”, which could be negatively affected if restrictions lessen.
Another thing the company is looking at, according to Morgenfeld, is privacy and the regulatory environment around the issue. He mentioned that a change in the Apple operating system update that will allow users to opt out of receiving targeted advertising could affect Pinterest. (Facebook and Apple are in a war of words about oncoming change.)
As for record annual user growth, Silbermann said on the call that he was helped by an increase in Generation Z users. He said the next wave of growth could come from international markets, which represent 17% of total revenue: “We are still relatively sub-penetrated there ”.
Pinterest shares increased 17% YTD (and 245% over the past 52 weeks), compared to a 2% increase in the S&P 500 SPX index,
so far this year.