(Reuters) -Pinterest Inc beat fourth-quarter revenue estimates on Thursday as retailers splurged on advertising during the holiday quarter, sending the image-sharing platform’s shares over 20% higher aftermarket.
Revenue rose 20% to $847 million, surpassing analysts’ estimate of $827 million, according to Refinitiv IBES data.
Monthly active users (MAUs), however, declined 6% during the fourth quarter to the lowest since June 2020, signaling that a pandemic-driven surge in demand was cooling off as easing restrictions encourage people to step out more.
MAUs – a key metric that shows engagement levels on the website – was 431 million for the quarter, the company said on Thursday. That missed analysts’ estimate of 447.95 million, according to FactSet.
Facebook owner Meta Platforms also saw a decline in daily active users from the previous quarter for the first time, and doled out a disappointing earnings forecast on Wednesday, blaming Apple’s privacy changes and increased competition from rivals like TikTok.
Like its peers, Pinterest had seen a surge of interest when the pandemic first struck after users took to the digital pinboard to plan DIY projects or “pin” interesting ideas to keep themselves entertained during lockdowns.
Now, social media companies are focusing on advertising efforts to sustain revenue growth, with large retailers and small-business owners taking to these platforms to attract online shoppers.
Pinterest now faces an uphill task to scale its video-first features Pinterest TV and Idea Pins, as well as influencer marketing efforts, especially when platforms YouTube, Instagram and TikTok have a significant lead.
Its net income was $175 million for the quarter ended Dec. 31, compared with $207.8 million a year earlier.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Devika Syamnath)
