Pinterest reports strong revenue growth thanks to holidays, pandemic lockdowns
- Pinterest reported fourth-quarter 2020 results Thursday.
- The company beat on both the top and bottom lines.
- Pinterest also reported strong user growth.
Pinterest reported fourth-quarter financial results Thursday that beat on both the top and bottom lines and showed strong user growth.
The company's stock jumped more than 10% in after-hours trading.
Here are the key numbers:
- Earnings per share: 43 cents vs. 32 cents expected in a Refinitiv survey of analysts
- Revenue: $706 million vs. $645.6 million expected by Refinitiv
- Monthly active users: 459 million vs. 449.4 million expected in a FactSet survey
- Average revenue per user: $1.57 vs. $1.44 per FactSet
The company's total U.S. revenue jumped 67% year over year, to $582 million. Its international revenue was up 145% year over year, to $123 million. Pinterest said the increases in both groups were driven by a growth in average revenue per user. Pinterest said that its U.S. monthly active users came in at 98 million, an increase of 11% year over year. The company's international user base also continued to rapidly expand, up 46% to 361 million.
The company said in its letter to investors that it continued to see users engage with its app amid the ongoing Covid-19 pandemic that's left people at home and in need of entertainment. Pinterest said that its revenue growth was mostly driven by an earlier and sustained holiday season and product improvements in advertising. Pinterest added that its shopping ad revenue grew faster than its overall business and it saw a six-times increase in the number of businesses that used its shopping ads format.
"Our investments in ad tools and sales coverage continued to pay off, especially during a strong holiday season. Advertising demand was healthy across different advertiser sizes and verticals, with Retail demand further building off last quarter's recovery," the company said in its report.
Pinterest said it continues to see strong ad momentum in its international markets.
"International revenue more than doubled in Q4 from the prior year, speaking to how important Pinterest has become to advertisers reaching a global audience of Pinners. And we're just getting started here: in 2021, we plan to expand our presence in existing international markets and are excited to enter new geographies in Latin America in the first half of the year," the company said.
Analysts expected the social media company to post a strong quarter, pointing toward last week's earnings from Facebook, which benefited in 2020 by a shift toward online commerce and products during the pandemic.
The company also gave better first-quarter 2021 guidance than expected. Pinterest said it expects revenue to grow in the low 70% range year over year.