((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Updated share movements in paragraph 1, added details on third-party advertising deals in paragraph 3, CEO comments in paragraphs 4.5, analyst comment in paragraph 9) by Jaspreet Singh
Pinterest company PINS.N forecast second-quarter revenue above Wall Street estimates on Tuesday, expecting a boost from its advertising partnerships with Amazon and Google, sending its shares up by more than 16% in after-market trading.
The company has benefited as marketers have turned to the platform to reach Gen Z users – more than 40% of its user base – and take advantage of its new AI-driven advertising tools and its latest advertising formats, which offer better user engagement.
In early February, Pinterest announced a third-party advertising deal with Alphabet’s Google GOOGL.O, allowing the company to serve ads through Google’s ad manager, after striking a deal with Amazon.com AMZN.O last year .
“The first quarter was a landmark quarter for Pinterest as we reached new highs…our fastest growth in users and revenue since 2021,” Chief Executive Officer Bill Ready said in a statement. .
Pinterest saw an “emerging contribution” in the first quarter from third-party partnerships, which are ramping up and complementing “really strong growth” in first-party advertising demand, Ready added in a post-results call.
The company expects second-quarter revenue to be between $835 million and $850 million, compared with analysts’ average estimate of $826.5 million, according to LSEG data.
In the first quarter, the number of monthly active users increased 12% to 518 million, compared to estimates of 503.2 million users.
First-quarter revenue rose 23% from a year earlier to $740 million, beating estimates of $699.9 million. Adjusted earnings per share came in at 20 cents, also beating estimates of 13 cents.
“As Pinterest continues to refine its advertising tools and refine its targeting algorithms, we can expect the platform to become a performance marketing hub, providing unparalleled opportunities for brands,” said Jeremy Goldman, Senior Director of Briefings at Emarketer.
The majority of Pinterest’s first-quarter ad spending in the United States came from the shopping category (50%), followed by 20% from consumer packaged goods (CPG), market intelligence firm Sensor Tower told Reuters on Monday .
The top three U.S. advertisers for Pinterest during the quarter were Amazon, Target TGT.N , and PDD Holdings’ PDD.O Temu, Sensor Tower added.