Pinterest (Nasdaq: PINS) stock was higher following its better than expected Q4 results as it exceeded analysts' estimates on the top and bottom-line. The company also issued an outlook that was in line with expectations, unlike other social media stocks that warned of poor guidance.
Pinterest seems to be handling the changes in Apple's (NASDAQ: AAPL) iOS better than other companies, however, it's seeing a sharp slowdown in user growth. Overall, the stock is down 73% from its high in February 2021 and has now given up nearly all of its gains since the March 2020 low. The results also reversed a 10% decline that came the previous day due to Meta's (NASDAQ: FB) weak earnings and outlook.
Inside the Numbers
The stock's earnings will ultimately determine whether it will be able to return to its previous heights or if the stock has topped for good. This earnings report dispels the worst-case fears of the business being in decline but also does not hint at any sort of acceleration in growth.
In Q4, the company reported $0.49 in earnings per share which topped expectations of $0.45 per share in earnings. This also marked Pinterest's first full year of profitability. Revenue also beat expectations at $847 million which was better than expectations of $827 million and a 20% increase from last year.
The company expects Q1 revenue to grow in the "high-teens" which is consistent with analysts' expectations of an 18% increase. It said that Q4 revenue was negatively affected by advertisers having less inventory due to supply chain factors and thus feeling less need to spend on ads.
Global monthly active users were down 6% to 431 million, while monthly active users were 86 million, a 12% drop for North America. However, this decline was offset by average revenue per user increasing by 23% to $1.93.
This is the major silver lining in Pinterest's report that it seems to be less affected by the iOS changes as Meta and Snap (NYSE: SNAP) saw downward pressure in terms of revenue per user.