Shares of Pinterest rose sharply following its second-ever earnings report. (Photo Illustration by ... [+]
Pinterest shares surged more than 15% late Thursday after it reported a smaller-than-forecast loss in its second-ever quarterly earnings report as a public company.
The image-based search, share and shopping platform [PINS] said revenue rose 62% to $261 million, beating forecasts of $235.53 million, according to Refinitiv. Pinterest also raised its 2019 revenue outlook to between $1.095 billion and $1.115 billion, above the $1.08 billion consensus. If the forecast holds, it will be the first time Pinterest generates more than $1 billion in annual revenue.
The rosy view overshadowed a net loss that ballooned to $1.2 billion, or $2.62 a share, thanks to restricted stock expenses associated with its IPO. Without the expense, its 6 cent-a-share loss was better than the 8 cent loss forecast by analysts polled by Refinitiv.
Pinterest reported 300 million monthly active users (MAUs) in the second quarter, a 30% increase from a year ago, boosted by international users. Monthly active users outside the U.S. rose 38% to 215 million versus 85 million in the U.S.
The San Francisco company has updated several major features since its initial public offering in February, launching improved search recommendations, more video content and shoppable products in the second quarter.
Advertising remains the company’s major source revenue as Pinterest increasingly relies on artificial intelligence to enhance reach and boost merchandise sales on the platform. Second quarter results suggest that those efforts are paying off.
CEO Ben Silbermann told investors the company is focused on developing more tools for small businesses to advertise on the platform, and that the mobile interface tool that launched one week ago should help the company increase ad spending through this year and heading into next. He also believes it will help Pinterest compete with rivals such as Facebook, Twitter and Snap.
Executives are also betting on video advertising. Videos are an increasingly preferred medium by Pinterest advertisers, and a natural fit for some of the most popular categories on the platform, which lend themselves to tutorial videos: exercise, recipes, and do-it-yourself projects. Silbermann said that in the second quarter, there were more videos viewed on Pinterest than all of last year put together.
The company's privacy controls are likely to become an increasingly important point of differentiation for the platform. Silbermann said users currently have the option to make Pinterest boards private and to opt-out of product recommendations based on certain boards they create.
Pinterest launched a new shopping tool on Tuesday that helps users discover similar products to ones they've engaged with. The company also rolled out new wellness and stress-relieving tools for distressed users searching the site.
