Image sharing social media service Pinterest reported its earnings for the third quarter on Thursday. Despite the fact that the company suffered a decline in monthly users, it reported impressive earnings and revenue for the quarter. The company, after publishing its earnings, saw its stock soar 6 percent in extended trading after closing at its lowest in over a year during the regular trading session.
The company reported earnings per share of 28 cents, surpassing analysts’ expectations of $23 cents, according to Refinitiv. For revenue, analysts expected $630.9 million, according to Refinitiv. The company reported revenue of $633 million for the third quarter. The average revenue per user stood at $1.41 compared to StreetAccount’s forecast of $1.38. The company saw a decline in its monthly active users and failed the beat analysts’ expectations of 460 million. Monthly active users reported by the company stood at 444 million.
According to the company, its monthly active users fell from 2 percent from the 454 million it reported in July. The decline in monthly active users recorded in the third quarter makes it the second consecutive quarter that this is happening. According to Pinterest, as of the 2nd of November, its monthly active users in the U.S. stood at approximately 89 million while globally, the figure stood at 447 million. The figures are down 9 percent and 2.6 percent respectively, from the fourth quarter of 2020.
The only setback the company witnessed was in its monthly active users. It reported positive figures for other listings. Revenue was up 43 percent YoY and net income for the quarter was $94 million. Average revenue per user was also up 37 percent YoY.
Like other companies, Pinterest was also affected by the pandemic and supply chain challenges. A regulatory filing by the company said that the company’s services had been affected by pandemic-induced factors and supply chain issues. The company also mentioned that it is currently having lower user engagement, growth and retention rates as the pandemic is beginning to fade off.
One more thing the company mentioned was Apple’s recently-introduced App Tracking Transparency (ATT) feature. Pinterest said these changes have affected its “ability to track user actions off our platform and connect their interactions with on-platform advertising”. The company failed to give exact information on how the ATT feature rubbed off on its financial results. Like other businesses such as Snap, Pinterest says that the new privacy changes have taken a toll on its business.
Pinterest’s earnings report follow shortly after there was news that the company was being acquired by payments giant PayPal. PayPal has however come out to say it is not acquiring the image sharing and social media company.