What happened
Shares of newly public social-media company Pinterest (NYSE: PINS) jumped 18.7% in August, according to data from S&P Global Market Intelligence. For context, the S&P 500, including dividends, fell 1.6% last month.
While shares pulled back 11.8% during the holiday-shortened first week of September, they’re still up more than 59% since the San Francisco-based company’s April initial public offering at $19 per share.
Pinterest’s platform allows users to visually share — by “pinning” images and videos to their boards — and discover products and projects by browsing what others have pinned. As with social-media titan Facebook, the company makes it money from advertising.
Image source: Getty Images.
So what
We can attribute Pinterest stock’s strong performance last month to the company’s Aug. 1 release of second-quarter results that crushed Wall Street’s expectations and to management increasing full-year 2019 guidance. Shares surged 18.6% on the day following the release.
In Q2, Pinterest’s revenue soared 62% year over year to $261.2 million, easily beating the consensus estimate of $235.5 million. Revenue growth was driven by a 30% increase in monthly active users (MAUs) to 300 million and a 29% rise in average revenue per user to $0.88.
As is typical for a newly public company, Pinterest isn’t profitable. It posted an adjusted net loss of $24.5 million, or $0.06 per share, a 28% improvement from the year-ago period’s $34.2 million net loss. Nonetheless, the adjusted bottom line beat the $0.08 loss-per-share that the Street was expecting. On the basis of GAAP (generally accepted accounting principles), Pinterest turned in a net loss of $1.16 billion, though much of that loss was due to expenses associated with the company’s IPO.
Now what
For full-year 2019, Pinterest now expects revenue to be $1.095 billion to $1.115 billion, up from its previous outlook of $1.055 billion to $1.08 billion. It also guided for adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of negative $50 million to negative $25 million, up from its prior expectation of negative $70 million to negative $45 million.
