© Reuters. A keyboard is placed in front of a displayed Pinterest logo in this illustration taken February 21, 2023. REUTERS/Dado Ruvic/Illustration
(Reuters) -Image-sharing platform Pinterest (NYSE:) beat Wall Street targets for second-quarter results on Tuesday and forecast higher margins for the year, supported by an advertising market recovery and cost-cutting measures.
Tech giants Meta Platforms and Google parent Alphabet (NASDAQ:) had also recorded strong ad sales, signaling a rebound in marketing spending by businesses as inflation cools and consumer confidence improves.
Pinterest CFO Julia Donnelly said its adjusted core earnings margin will be higher by “roughly 400 basis points” in the current fiscal year. It was 16% in 2022.
The company also forecast current-quarter revenue would grow in the high-single-digit percentage range, compared with analysts’ expectations of 7.7%, according to Refinitiv data.
CEO Bill Ready’s efforts to boost shopping through the platform’s content are helping user and advertising revenues, analysts have said.
“Similar to last quarter, in Q2, we continued to drive a more than 30% increase in our global ad impressions,” Ready said.
“We are also leveraging next-gen AI (artificial intelligence) on our ad products and we’re seeing a profound impact in our ad capabilities,” he added.
Monthly active users (MAUs) on the platform rose 8% to 465 million from a year ago, above estimates of 462.8 million.
Pinterest has also reduced its real estate footprint and laid off about 150 employees in February in an effort to cut costs. In April, it announced an ad partnership with e-commerce giant Amazon.com (NASDAQ:) to bring third-party ad demand.
In the quarter ended June 30, revenue grew 6% to $708 million, beating estimates of $696.1 million. It earned 21 cents per share on an adjusted basis, compared with expectations of 12 cents.
Pinterest’s shares were down 2.6% in volatile trading after the bell, following gains of more than 30% over the past three months.
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