A slowdown in Pinterest Inc’s user growth tarnished an otherwise strong quarterly report card, sending shares down about 10% aftermarket on Tuesday even though the company forecast current-quarter revenue above estimates.
With pandemic restrictions easing across the world, people are dialling down time spent on social media, but a boom in ad spending by companies helped soften the hit from tepid user growth.
Pinterest’s monthly active users (MAU), a widely watched metric, grew only 30% to 478 million in the first quarter. That was in contrast to last quarter’s 37% jump on a year-over-year basis.
“Starting in mid-March, the easing of pandemic restrictions slowed US MAU growth and lowered engagement year-over-year as people spent less time online,” Pinterest said.
Besides the slowdown in user growth, Pinterest reported better-than-expected numbers in its reported quarter.
The image-sharing company said it expected revenue to rise 105% in the second quarter, which implies a figure of about $558 million, compared with a Refinitiv IBES estimate of $530 million.
Ad spending has recovered further this year from the slump in the early months of the COVID-19 crisis as an economic recovery picks up steam, prompting retailers to step up efforts to attract customers.
Pinterest forecast a mid-teens jump in global monthly active users in the current quarter.
Revenue, which is generated by placing advertisements next to users’ Pins or posts, soared 78% to $485 million, beating expectations of $473.7 million.
The team at Platform Executive hope you have enjoyed this news article. Automatic translation from English to a growing list of languages via Google AI Cloud Translation. Initial reporting via our official content partners at Thomson Reuters. Reporting by Nilanjana Basu in Bengaluru. Editing by Aditya Soni and Devika Syamnath.
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