Pinterest Soars as Q4 Beat Calms Nerves Over Apple’s Rules
By Dhirendra Tripathi
Investing.com – Pinterest stock (NYSE:PINS) soared 13% in premarket trading Friday after the company easily beat fourth-quarter estimates, setting aside short-term concerns around its business due to changes in Apple's (NASDAQ:AAPL) privacy rules.
Fourth-quarter revenue rose 20% to $847 million, driven by strong advertising revenue. Pinterest said its investments in tech and augmented reality and its efforts to encourage broader user engagement yielded results: ads stayed relevant for longer and that kept the likes of Ikea on its platform.
Fourth-quarter adjusted profit per share was 49 cents, up 14%, and beat estimates.
Pinterest said the strength was driven by retail advertisers. That commentary helped ease concerns that changes to Apple’s privacy rules that have made it tougher to track users are hurting social media companies. Those fears were accentuated two days back when Meta Platforms (NASDAQ:FB) blamed them for a disappointing quarter, setting off speculation the tweaks would engulf others as well.
The growth in advertising offset a 6% year-on-year fall in monthly active users to 431 million. The company blamed “pandemic unwind”, changes in Google’s algorithm and heightened competition from video-centric consumer apps for the decline.
Despite the strength of the fourth quarter, Pinterest said it may still be affected by Apple’s changes in the future.
“The changes in the privacy and regulatory environment are generally unhelpful in our ability to deliver performance advertising results,” Bloomberg quoted Chief Financial Officer Todd Morgenfeld as saying. “We’re not immune to these issues impacting our business over time.”
To counter that, the company is investing more in technology and focusing on scaling up video features like Pinterest TV and Idea Pins. It’s also boosting influencer marketing, a space dominated by YouTube, Instagram and TikTok.
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