Image-sharing company Pinterest Inc reported better-than- expected quarterly results on Thursday, benefiting from strong user growth and heavy advertising by e-commerce retailers during the holiday season. Shares of the company jumped nearly 10% in extended trading as its first-quarter sales growth forecast of a rise in the low 70% range also beat Wall Street expectations of 56% growth.
Ad spending has rebounded from a slump during the early months of the COVID-19 pandemic as retailers turn to the web to attract home-bound customers, boosting revenues of companies such as Alphabet Inc’s Google and Facebook Inc. The shift to virtual interactions has also increased engagement on social media platforms, with Pinterest’s monthly active users jumping 37% to 459 million in the fourth quarter.
“We welcomed over 100 million additional monthly active users to Pinterest in 2020, more than any other year in our history,” Chief Executive Officer and co-founder Ben Silbermann said in a statement.
Pinterest generates revenue by placing advertisements next to the Pins, or posts, uploaded on the site by users. The company’s revenue from the United States, its biggest market, surged 67% to $582 million. Total revenue soared 76% to $706 million, beating analysts’ estimates of $645.6 million, according to Refinitiv IBES data.