Pinterest Inc. reported quarterly sales that topped analysts’ estimates after advertiser demand bounced back from budget cuts seen during the initial outbreak of COVID-19. The shares surged.
Third-quarter revenue jumped 58 per cent to US$443 million, the digital search and scrapbooking company said Wednesday in a statement. Analysts, on average, projected US$387.8 million, according to data compiled by Bloomberg. The company also predicted that sales would increase about 60% in the holiday quarter, which would be higher than analysts’ projections of 38 per cent growth.
Pinterest said it had 442 million monthly users at the end of the period, a gain of 37 per cent from a year earlier and higher than the average estimate of about 431 million. The shares jumped as much as 17 per cent in extended trading to US$56.95.
The San Francisco-based company said in July that revenue growth increased about 50 per cent in the month, though it expected the numbers to decline throughout the quarter. But advertiser demand stayed high during the three-month period ending in September as advertisers adapted to the new reality brought on by the coronavirus. Pinterest specifically cited an uptick in small business advertisers, retailers and large advertisers of consumer packaged goods.
Chief Executive Officer Ben Silbermann attributed some of Pinterest’s user growth to the changing environment as more people move communication and activities online. “More than ever before, people are coming to Pinterest to get inspiration for their lives,” Silbermann said in the statement.
Pinterest also said it received a boost of almost 4 million monthly active users when young people upgraded their iPhones to Apple Inc.’s new operating system, iOS 14, and used Pinterest to come up with ideas for new background filters.
Pinterest’s third-quarter revenue growth is another sign the digital ad industry has returned to pre-COVIDlevels -- an idea that was reinforced last week when Snap Inc. also reported better-than-expected sales. Facebook Inc., Alphabet Inc. and Twitter Inc. report earnings on Thursday.