Pinterest stock rockets on user growth, advertising in the second quarter

Pedestrians pass in front of the Pinterest signage displayed outside the New York Stock Exchange.

Michael Nagle | Bloomberg | fake pictures

Pinterest shares rose as much as 38% in premarket trades on Friday morning after the company reported second-quarter earnings reflecting how people turned to home cooking, remote working, and activities during home stay requests.

Shares rose more than 28% in morning trading.

The company posted total revenue of $ 272 million, a 4% increase year-over-year, although it said advertiser demand continued to be affected by the pandemic. After a sharp drop in growth in mid-March when advertisers responded to the pandemic, the company said in a letter to shareholders that revenue growth stabilized in April and continued to improve as marketing restrictions were eased. refuge in some states. Pinterest reported that its global monthly active users grew 39% year-over-year to 416 million.

“People needed Pinterest in the second quarter,” the company said in the letter. “They needed a service that would help them adapt to radically changed circumstances, one that inspired them to cook at home, build gardens, plan activities for their children, and establish remote offices and home gyms, to name just a few of the typical COVIDs- 19 related to the use cases we saw during the quarter. “

The company said users who started using Pinterest during Covid-19 continued to have high engagement even after shelter-in-place restrictions were lowered, it said while overall engagement peaked in mid-April and early May and decreased as stricter locks ended, commitments remain stable “well above pre-Covid-19 levels.”

The company said total growth for its advertisers accelerated year-over-year during the second quarter and that small and medium-sized business expenses accounted for almost half of its total revenue.

Aaron Goldman, chief marketing officer for 4C (who recently announced an acquisition by adware company Mediaocean), said advertisers on the company’s platform increased Pinterest budgets by 20% year-over-year in the quarter. . He said that is in part because Pinterest is a place with strong business intent and where advertisers can get traction without showing ads near controversial content.