Pinterest's Revenue Soars as Pandemic Boosts Engagement -- Update
By Sarah E. Needleman
Pinterest Inc. posted strong revenue and user growth in the
third quarter, as the social-media company saw significantly
greater pandemic-fueled engagement than it did in the spring and
said it benefited from an advertiser boycott at Facebook Inc.
The image-sharing company that makes money exclusively through
advertising sales said revenue rose 58% from a year earlier to $443
million, compared with 4% growth in the second quarter. Analysts
surveyed by FactSet expected sales of $383 million.
An advertiser boycott against Facebook over the summer helped
Pinterest, the company said. But it added that it isn't clear how
long that trend will last, particularly after the U.S. presidential
election takes place. Facebook and Twitter Inc. report
third-quarter results Thursday.
In the third quarter, advertiser demand was driven by strength
from small and medium businesses, Pinterest said.
For the current quarter, San Francisco-based Pinterest expects
revenue to grow approximately 60%. The company said it would have
projected a bigger increase if not for uncertainty about the
pandemic's impact on the wider economy and the fact that it is
operating a largely remote workforce.
Monthly users world-wide rose by 37% in the third quarter to 442
million, beating analysts' expectations of an 11% increase.
International user numbers soared 46% compared with 13% for the
U.S. Growth was particularly strong among users under the age of
25, the company said, keeping up a trend it has seen for the past
Pinterest reported a third-quarter loss of $94 million. That
figure, it said, reflects a one-time charge of $90 million during
the period for the termination of an office lease in San Francisco.
It compares with a loss of $125 million in the same quarter a year
The company reported adjusted earnings before interest, tax,
depreciation and amortization of $93 million, up from $4 million in
the same quarter a year ago. Wall Street expected $28 million of
earnings on that adjusted basis.
Pinterest's strong results come about a week after Snap Inc.
also reported a surge in revenue and users in the latest quarter
driven by strong user engagement with people stuck at home.
In recent months Pinterest has made efforts to become more
attractive to advertisers. It formed a partnership with software
provider Shopify Inc. to help brands get discovered and generate
sales and created a verified merchant program that places a blue
check mark on profiles of retailers verified by its employees for
having fair return policies and shipping rates and in-stock
Pinterest, which launched in 2010 and now has more than 2,400
employees world-wide, has previously said it is working to build a
more inclusive culture and make sure its product reflects those
values. In recent months it has added two Black women to its board
The company was sued in August by its former operating chief,
Francoise Brougher, for wrongful termination and retaliation. The
suit alleged a culture of secretiveness among top male executives
that resulted in Ms. Brougher being left out of key meetings and
decision-making. A trial could take place next year. Pinterest has
declined to comment on the case.
Separately, two former female employees in June alleged gender
and race discrimination, as well as pay inequities, while working
at Pinterest. Shortly after the company said it hired a law firm to
conduct an independent review of its workplace culture. That review
hasn't yet come out and a company spokesman declined to say if or
when it would be made public.
Write to Sarah E. Needleman at email@example.com
(END) Dow Jones Newswires
October 28, 2020 16:46 ET (20:46 GMT)
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