The Pinterest stock jumped 13% in premarket trade Friday after the firm easily topped fourth-quarter projections, putting short-term concerns about its business owing to changes in Apple's privacy guidelines to the side.
Strong advertising sales drove up revenue by 20% to $847 million in the fourth quarter. Pinterest claimed that its investments in technology and augmented reality, as well as its attempts to foster greater user involvement, paid off: ads stayed relevant for longer, which kept companies like Ikea on the site.
The adjusted profit per share for the fourth quarter was 49 cents, up 14% from the previous quarter and above expectations.
Retail advertisers, according to Pinterest, are driving the growth. That remark allayed fears that Apple's new privacy restrictions, which make it more difficult to follow users, are hurting social media companies. Fears were heightened two days ago when Meta Platforms blamed them for a poor quarter, sparking concern that the changes might spread to other companies as well.
Advertising revenue increased by 6% year over year, bringing the total number of monthly active users to 431 million. The business attributed the drop to "pandemic unraveling," changes in Google's algorithm, and more competition from video-centric consumer apps.
Despite the fourth quarter's success, Pinterest warned that Apple's adjustments could have an impact on the company in the future.
According to a major Newswire, Chief Financial Officer Todd Morgenfeld stated, "Changes in the privacy and legal environment are generally unhelpful in our ability to offer performance advertising results." "We're not immune to these concerns having a long-term impact on our business."
To combat this, the firm is increasing its technological investments and focusing on expanding video products such as Pinterest TV and Idea Pins. Influencer marketing, which is dominated by YouTube, Instagram, and TikTok, is also gaining traction.