An American social media platform focusing on image sharing and lifestyle content discovery$Pinterest (PINS.US)$The newly announced first-quarter sales and platform user growth rate both exceeded Wall Street expectations. This was mainly due to the fact that the social networking platform used the advantage of a “content discovery mechanism” to fully enter the online shopping field and that the platform was highly favored by Gen Z users around the world. Following the announcement of first-quarter results, the company's stock price once surged by more than 24% during after-hours trading in US stocks on Tuesday. As of press release, the company's stock price surged more than 15% before the US stock market on Wednesday.
The company's performance report released on Tuesday showed that in the three months ending March 31, 2024, the company's total sales increased 23% year over year to US$740 million, exceeding the average forecast of Wall Street analysts of US$703 million. The company announced adjusted earnings per share of 20 cents under non-GAAP standards. This figure generally exceeded the average estimate of 14 cents and 8 cents in the same period last year.
Under non-GAAP standards, the company's net profit for the first quarter reached US$139 million, a sharp increase of 142% compared to the standard. Under non-GAAP standards, the company's adjusted EBITDA profit reached US$113 million, a year-on-year surge of 319%. The EBITDA margin was 15%, up from 4% in the same period last year.
In terms of performance expectations, Pinterest management expects the total sales range for this quarter to be as high as $835 million to US$850 million, or an increase of 18-20% year over year, which is higher than Wall Street analysts' average forecast of US$828 million.
According to the data, this social networking platform, which focuses on image sharing and lifestyle content discovery, currently has 518 million monthly active users worldwide, an increase of 12% over the same period last year. User data has broken the 500 million mark for the first time. According to the platform's statistics, more than 40% of Pinterest users belong to a large group of young people known as “Gen-Z (Gen-Z)” in the broad sense of the word. They were usually born after 1997.
Pinterest focuses on a “content discovery mechanism,” which is usually used to search for user inspiration on specific topics to help users discover visual content related to personal interests, such as sharing and communicating about movies and TV series, global travel guides, home design, home recipe making, or handicrafts, attracting a large number of young users seeking inspiration for creativity and lifestyle improvement. In contrast, Instagram and Facebook have a wider user base, covering multiple age groups and backgrounds, and suitable for a wide range of social needs and ways to exchange information.
Pinterest users can discover, save, and share a variety of images and videos on its platform, often related to fashion, food, home decor, and personal interests, providing unique visual search and content discovery mechanisms. Pinterest's user interface is mainly based on its unique “artboards,” where users can save relevant content by topic.
Additionally, San Francisco-based Pinterest has recently been investing heavily in its digital advertising business, partnering with Amazon and Alphabet Inc.'s Google (Google) to help fill inventory and provide more targeted direct sponsored ads. These ads may be more profitable than other types of marketing models because they push users to “click to open the artboard” to promote or buy products rather than just passively increasing brand awareness.
Pinterest also focuses on shoppable content, making it easier for young consumers to buy the right products they see on the “drawing board.” The company's CEO Bill Reddy said this shopping mentality distinguishes Pinterest from other social networking companies because younger users often use the platform to search for content and actively look for things to buy rather than just browse through posts. He said this modern “window shopping” makes Pinterest more appealing to young people.
“We do tend to create a more positive environment compared to Gen Z's negative influence on many other social media,” Reddy said in an interview.
Major retailers such as Urban Outfitters and Vuori, as well as advertisers in Asia and other international markets looking to reach younger consumers in North America, have boosted the company's quarterly sales growth.
Editor/Jeffrey