Pinterest Inc. (NYSE:PINS) witnessed its most significant surge in over three years following the release of first-quarter sales and user growth figures that surpassed expectations on Wall Street, driven by an emphasis on shopping features and targeting Gen Z users.
Chief Executive Officer Bill Ready highlighted the company’s efforts to create a more positive online environment, contrasting it with the toxicity often experienced by Gen Z on other social media platforms.
Shares surged by as much as 23% to $40.98 during Wednesday afternoon trading in New York, marking the largest intraday increase since October 2020.
Revenue for the quarter ending March 31 climbed by 23% to $740 million, exceeding the average analyst projection of $700.3 million. Pinterest reported adjusted earnings per share of 20 cents, surpassing the consensus estimate of 14 cents.
The pinboard-style search platform now boasts 518 million global monthly users, representing a 12% increase from the previous year and surpassing the half-billion mark for the first time. Over 40% of Pinterest users belong to the Gen Z demographic, typically born starting around 1997.
Pinterest, headquartered in San Francisco, has been heavily investing in its digital advertising business, forging partnerships with Amazon.com Inc. (AMZN) and Alphabet Inc.’s Google (NASDAQ:GOOGL) to enhance ad inventory and offer more targeted, direct-response advertisements. This strategic shift aims to capitalize on ads that prompt users to click on promotions or make purchases, rather than solely focusing on brand awareness.
The platform has also intensified its focus on shoppable content, streamlining the process for users to purchase items they discover on pinboards. Ready emphasized that Pinterest stands out from other social networks as users often visit the site with the intent to shop rather than passively scroll through content. This modern “window shopping” form has resonated with younger audiences, making Pinterest increasingly appealing.
The company has experienced a revenue boost from major retailers such as Urban Outfitters and Vuori, as well as advertisers in Asian and other international markets seeking to target young American consumers.
Pinterest anticipates revenue in the range of $835 million to $850 million for the current quarter, surpassing analysts’ estimates of $828 million.
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