SAN FRANCISCO: Pinterest Inc reported first-quarter sales and user growth that surpassed Wall Street’s expectations, bolstered by a push into shopping and a focus on Gen-Z users. Shares soared more than 20% in extended trading.
Revenue rose 23% to US$740mil in the three months ended March 31, the company said in a statement.
Analysts had projected US$700.3mil, on average. The company reported adjusted earnings per share of 20 US cents. That beat the average forecast for 14 US cents.
The pin board-style search company now has 518 million global monthly users, up 12% from a year ago and crossing the half-billion mark for the first time.
More than 40% of Pinterest users are in the demographic cohort known as Gen-Z, generally born since 1997.
The shares rose as high as US$41.65 in extended trading in New York after closing at US$33.45 on Tuesday.
San Francisco-based Pinterest has been investing heavily in its digital advertising business, striking partnerships with Amazon.com Inc and Alphabet Inc’s Google to help fill inventory and offering more targeted, direct-response ads.
Those can be more lucrative than other kinds of marketing because they push users to click on promotions or purchase items rather than just passively raising brand awareness.
Pinterest has also focused on shoppable content, making it easier for consumers to buy items they see on the pin boards.
This shopping mindset distinguishes Pinterest from other social networking companies, chief executive officer Bill Ready has said, since people often show up to the site actively seeking something to buy – not just to scroll through posts.
Such modern “window shopping” has made Pinterest more attractive to young people, he said.
“We have really leaned into creating a more positive environment relative to the toxicity that Gen-Z experiences on much of the rest of social media,” Ready said.
The company has seen a revenue boost from large retailers such as Urban Outfitters and Vuori, plus advertisers in Asia and other international markets that are looking to reach young US consumers. — Bloomberg