Pinterest beats on earnings and revenue even as monthly user number drops

Pinterest on Thursday reported better-than-expected earnings and revenue for the third quarter despite a decline in monthly users.

The company’s stock price was up more than 6% in extended trading after closing at its lowest in over a year.

Here are the key numbers:

Adjusted earnings per share: 28 cents vs. 23 cents expected by RefinitivRevenue: $633 million vs. $630.9 million expected by RefinitivMonthly active users: 444 million vs. 460 million expected by StreetAccountAverage revenue per user: $1.41 vs. $1.38 forecast by StreetAccount

Pinterest said monthly active users fell 2% from the 454 million the company reported in July. This was the second quarter in a row that Pinterest saw a decline in monthly users.

The company said that, as of Nov. 2, its U.S. MAUs were approximately 89 million while global MAUs were 447 million. Those numbers are down 9% and 2.6%, respectively, from the fourth quarter.

Revenue climbed almost 43% from a year earlier. Pinterest also posted a net income of $94 million, even with its profit from a year ago.

The company was able to show optimistic revenue and profit numbers by generating more money from each user. The company’s average revenue per user was up 37% compared to a year prior.

Pinterest provided a fourth-quarter revenue growth estimate “in the high teens” on a year-to-year basis. That was below Refinitiv expectations of 23.9% growth.

Advertisers’ willingness to spend on Pinterest’s services has fluctuated due to pandemic-related factors, including supply chain issues, rising commodity prices and labor shortages, the company said in a financial filing. The company also said that it’s experienced and may continue to see lower levels of user engagement, growth and retention rates as pandemic restrictions begin to lessen.

Pinterest noted that Apple’s iOS privacy changes have affected its “ability to track user actions off our platform and connect their interactions with on-platform advertising.”

While the company didn’t provide specific details about how Apple’s new feature affected its financial results, other social media apps like Snap and Facebook said the change was a significant drag on their business in the latest quarter.

The company did not address reports about a potential takeover by PayPal.

PayPal was reportedly in talks last month to buy Pinterest, though the payments company subsequently said it was not pursuing a deal.