Pinterest shares soar on third-quarter revenue beat as it bucks online ads trend

Pinterest shares soar on third-quarter revenue beat as it bucks online ads trend

Pedestrians pass in front of Pinterest signage displayed outside of the New York Stock Exchange.

Michael Nagle | Bloomberg | Getty Images

Pinterest shares soared over 12% in extended trading after the company reported third-quarter earnings.

Here’s how the company did.

  • Earnings: 11 cents per share (adjusted) vs. 6 cents per share (adjusted) expected, according to Refinitiv.
  • Revenue: $684.6 million vs. $666.7 million expected, according to Refinitiv.

Pinterest said its revenue grew 8% year-over-year on a loss of $65 million.

The company’s monthly average users remained relatively flat at 445 million.

“Our current expectation is that Q4 2022 revenue will grow mid-single digits on a year-over-year percentage basis, which takes into account slightly greater foreign exchange headwinds than in Q3 2022,” Pinterest said in a statement. “We expect our Q4 2022 non-GAAP operating expenses to grow low double digits percent quarter-over-quarter.

The company added that operating expenses should grow around 35% year-over-year for 2022.

Pinterest’s latest earnings report bucked the trend of online advertising companies posting results that missed analysts’ expectations. Concerns about a possible recession have caused businesses to reduce spending on online advertising, affecting a number of companies including tech giants like Meta and Alphabet.

Although Pinterest’s revenue growth rate of 8% during the third quarter was considerably lower than the 43% growth rate it reported the prior year in the same quarter, investors were looking for any positive signs after multiple rivals missed on their respective earnings reports.

Shares in Snap, for instance, plummeted last week over 30% the day after the company reported a revenue miss of $1.13 billion.

Earlier this week, Alphabet followed suit when it reported third-quarter revenue growth that declined from 41% a year ago to 6%, and said that advertising sales in its YouTube division fell 2% year over year to $7.07 billion, missing analysts’ estimates.

The next day, Meta announced its second-straight quarterly revenue decline and gave weak fourth-quarter guidance, prepping investors for another sales decline. Shares in the Facebook parent sank 24% the day after it reported its quarterly results.

Watch: Weakening ad revenue could compromise Meta’s free cash flow.

Weakening ad revenue could compromise Meta's free cash flow