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PINS shares slide on earnings but bounce back as it announces Alphabet partnership

AInvestThursday, Feb 8, 2024 9:38 pm ET
1min read

$PINS(PINS)The company reported a strong quarter with earnings per share (EPS) of $0.53, which was $0.01 better than estimates. Revenues for the quarter rose 11.9% year-over-year to $981.26 million, which missed expectations of $991.31 million. 

The company's adjusted EBITDA was $365 million and $683 million for the quarter and the year, respectively. Total costs and expenses were $785 million and $3,181 million for the quarter and the year, respectively.

The company's global monthly active users (MAUs) increased by 11% year-over-year to 498 million. This growth in MAUs can be attributed to the company's focus on product innovation and the increasing popularity of visual discovery platforms. 

Pinterest issued in-line guidance for the first quarter of 2024, with revenue expected to be in the range of $690 million to $705 million, representing 15-17% growth year-over-year. The company also expects its Non-GAAP operating expenses to be in the range of $450 million to $465 million, representing 9-13% growth year-over-year.

Pinterest's unique business model, where the interests of users and advertisers are aligned, has helped the company achieve double-digit revenue growth and an all-time high for global MAUs.

Shares initially sold off in reaction to earnings as the top line miss and lighter than expected ARPU weighed on the stock. PINS would erase those gains as it announced on its conference call that it was entering a partnership with Alphabet (GOOG). The partnership is focusing on the International markets for starters. The company believes partnering with Alphabet will allow it to raise its ARPU in other countries.

In conclusion, Pinterest reported a strong fourth quarter with growth in revenue, MAUs, and adjusted EBITDA. The company's in-line guidance for the first quarter of 2024 and focus on product innovation and user growth bode well for the company's future prospects.


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