Pinterest has delivered better-than-expected results for the second quarter, surpassing Wall Street’s projections and predicting increased profit margins for the year. The company attributes its success to the recovery of the advertising market and cost-cutting measures that have been put in place.

Much like other prominent technology companies, including Meta Platforms and Alphabet, Pinterest experienced a resurgence in advertising sales. This suggests that marketing spending is rebounding as inflation eases and consumer confidence improves. Julia Donnelly, the Chief Financial Officer of Pinterest, stated that the adjusted core earnings margin is expected to rise by approximately 400 basis points in the current fiscal year, compared to 16% in 2022.

Furthermore, Pinterest foresees high-single-digit percentage growth in revenue for the current quarter, surpassing the 7.7% expectations set by analysts. Bill Ready, the CEO of Pinterest, has been instrumental in enhancing the platform’s shopping capabilities, which have contributed to the increase in user and advertising revenues. Ready highlighted that the use of next-generation artificial intelligence in their ad products has resulted in a more than 30% growth in global ad impressions during the second quarter.

Notably, Pinterest witnessed an 8% growth in monthly active users, reaching 465 million compared to the previous year. This figure exceeded estimates of 462.8 million. The company has also taken cost-cutting measures, such as reducing its real estate footprint and laying off about 150 employees in February. Additionally, in April, Pinterest announced a partnership with e-commerce giant to expand third-party ad demand.

In the quarter that ended on June 30, Pinterest recorded a 6% growth in revenue, which amounted to $708 million. This exceeded expectations of $696.1 million. Moreover, the adjusted earnings per share were 21 cents, surpassing the projected 12 cents.

However, despite these positive results, Pinterest’s shares experienced a 2.6% decline in after-hours trading following significant gains of over 30% in the past three months. Nevertheless, the strong recovery illustrated by the company’s quarterly report underscores its potential for further growth in the advertising market.

Useful links:
1. CNBC: Pinterest Reports Strong Q2 Results
2. Bloomberg: Pinterest Exceeds Estimates on Ad Revenue Recovery