“Pinterest rides the wave of ad market recovery, surpassing expectations in Q3 with impressive growth and solidifying its position as a formidable player in the digital advertising landscape.”
Pinterest, the popular image-sharing platform, has reported better-than-expected revenue and profit for the third quarter. The company’s performance has been boosted by a stabilizing digital advertising market, which has attracted marketers ahead of the holiday season.
Following the announcement, Pinterest’s shares rose by more than 10% in extended trading. This positive outcome has sparked optimism about a broader market rebound after other industry giants, including Alphabet, Meta Platforms, and Snap, also surpassed revenue expectations last week, thanks to an uptick in their advertising business.
Pinterest’s success can also be attributed to its efforts to drive shopping on its app through partnerships with major retailers like Amazon.com. Analysts, including those at Bernstein, have been optimistic about the potential benefits of these collaborations, predicting that they could significantly increase the company’s revenue in the fourth quarter.
In terms of financials, Pinterest’s revenue for the quarter ended September 30 rose by 11% to $763.2 million, surpassing Wall Street estimates. The platform also experienced an 8% increase in global monthly active users, reaching a total of 482 million.
Furthermore, Pinterest exceeded analysts’ expectations for profit, reporting earnings of 28 cents per share, compared to the estimated 20 cents per share.
Looking ahead, Pinterest anticipates continued revenue growth in the 11-13% range year-over-year for the current quarter, outperforming the estimated growth of 11.3%. CEO Bill Ready, speaking at Pinterest’s first investor day, shared the company’s long-term goals, aiming for revenue growth in the mid-to-high teens and an improvement in its adjusted EBITDA margin to the low 30% range over the next three to five years.
This positive outlook for Pinterest aligns with recent forecasts by media research and investment firm Magna, which raised its projection for U.S. ad spending growth to 5.2% in 2023. Additionally, Magna expects digital ad sales to rise by 9.6% during that period.
Overall, Pinterest’s strong performance in the third quarter, fueled by a stabilizing digital advertising market and successful partnerships, is positioning the company for continued growth and success in the coming years.
