Pinterest Inc. overcame a tough online ad environment to grow revenue more than expected and break a streak of sequential user declines in the first quarter, sending its shares higher after close of business on Wednesday.
Pinterest PINS, -2.86% reported a loss of $5.3 million, or a penny per share, in the first quarter on revenue of $574.9 million compared to $485 million in the year-ago quarter. After adjusting for stock compensation and other factors, the social media company reported earnings of 10 cents per share, down from adjusted earnings of 11 cents per share a year ago but better than expected.
“Despite a challenging macroeconomic and geopolitical environment, we grew revenue 18% year over year,” Chief Executive Ben Silbermann said in a statement.
According to FactSet, on average, analysts expected Pinterest to report adjusted earnings of 3 cents a share on sales of $573 million. Shares rose more than 8% in after-hours trading after the results were released after closing down 3.2% at $18.61.
Pinterest makes money from online advertising for its flagship online scrapbooking product, a business that has shown cracks in recent months as Apple Inc. AAPL, -0.15% rolled out new privacy measures and some companies cut marketing spend . Shares are down nearly 50% so far this year, down 48.6%, while the S&P 500 Index SPX, +0.21% is down 12.4%.
It has been a struggle for Pinterest to attract users. Monthly active users, or MAUs, declined sequentially in each of the last three quarters of 2021, but Wall Street analysts on average forecast an increase in the first quarter of 2022 to 437.9 million MAUs from 431 million at the end of 2021. While Pinterest that mark missed, the number of users sequentially rose to 433 million, to the surprise of some.
“Ultimately, we believe investors expect another quarter of sequential MAU declines, with flat to rising considered positive based on recent talk,” wrote JP Morgan analyst Doug Anmuth in a preview of the Pinterest report dated April 22nd.
Pinterest executives expect second-quarter revenue to grow 11% year over year, indicating approximately $680 million in revenue. According to FactSet, analysts were expecting average sales of $693 million in the second quarter.