Pinterest Surpasses Expectations with Strong Q3 Growth in Ad Revenue and Gen Z Engagement
Pinterest’s latest financial performance highlights impressive gains in ad sales and a surge in Gen Z users, driving shares to new heights.
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Highlights
- Pinterest’s stock surged following an outstanding third quarter that exceeded all forecasts.
- Key metrics including earnings, revenue, monthly active users, and average revenue per user all outperformed expectations.
- The company’s growth was fueled by a rebound in advertising revenue and a growing base of engaged Gen Z users.
Pinterest (PINS) experienced a significant boost in shares after announcing third quarter results that outpaced analyst predictions, driven by a revival in advertising demand and increasing popularity among Gen Z audiences.
For Q3 fiscal 2023, Pinterest reported a net income of $6.73 million, a remarkable turnaround from a $65.18 million loss in 2022, shifting its net profit margin from negative 10% to a positive 1%.
Earnings per share (EPS) reached $0.28, while revenue climbed 11.5% to $763.2 million. Monthly active users (MAU) hit a record 482 million, up 8.3%, and average revenue per user (ARPU) increased by 3.2% to $1.61, all surpassing market estimates.
CEO Bill Ready emphasized Pinterest’s strengthened position as a leading visual search, discovery, and shopping platform, stating, “We’re experiencing our strongest product-market fit in years.” He also highlighted that Gen Z users, highly valued by advertisers, represent the company’s fastest-growing and most engaged demographic.
Looking ahead, Pinterest projects Q4 revenue between $974 million and $991 million, aligning closely with analyst expectations of approximately $977 million.
Following these results, Bank of America upgraded Pinterest’s stock rating from Neutral to Buy, anticipating continued growth in advertising revenue.
Pinterest shares traded near their yearly peak, gaining nearly 19% on the day and achieving a 30% increase year-to-date.
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