Pinterest Q4 Earnings Fall Short of Estimates, Revenues Rise Y/Y

Pinterest, Inc. PINS reported mixed fourth-quarter 2024 results, wherein adjusted earnings missed the Zacks Consensus Estimate while revenues beat the same. Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The San Francisco-based Internet content provider reported revenue growth year over year, driven by strong momentum in all regions. Management’s focus on improving shoppability and monetization potential across the platform and the incorporation of advanced AI-integrated tools to support advertisers and retailers led to top-line growth. Weakness within the food & beverage sub-sector of consumer-packaged goods remains a headwind. Net IncomeOn a GAAP basis, net income was $1.85 billion or $2.68 per share compared with $201.2 million or 29 cents per share in the prior-year quarter. Top-line growth and income tax benefit led to an improvement in net income.Non-GAAP net income was $385.6 million or 56 cents per share, up from $370.7 million or 53 cents per share in the year-ago quarter. However, the bottom line missed the Zacks Consensus Estimate by 7 cents.In 2024, the company reported a GAAP net income of $1.86 billion or $2.67 per share against a loss of $35.6 million or a loss of 5 cents per share in 2023. For 2024, non-GAAP net income was $901 million or $1.29 per share compared with $783.5 million or $1.13 cents per share in 2023.Pinterest, Inc. Price, Consensus and EPS Surprise Pinterest, Inc. price-consensus-eps-surprise-chart | Pinterest, Inc. QuoteRevenuesDuring the quarter, revenues rose to $1.15 billion from $981.3 million in the prior-year quarter, beating the Zacks Consensus Estimate of $1.14 million. Pinterest witnessed 11% year-over-year growth in global monthly active users (MAUs) to 553 million, which is an all-time record.In the fourth quarter, Pinterest unveiled the Pinterest Performance+ suite, a new set of AI and automation ad products designed to enhance lower-funnel advertising for global advertisers. By integrating AI and automation features, the solution enables advertisers to optimize targeting, manage budgets and set bids automatically, reducing campaign creation time by about half while offering flexibility for brands to mix and match features. These developments are enabling the company to enhance the relevancy and personalization of the content, which, in turn, is driving more user engagement. Several lower funnel products, such as Mobile Deep Linking and Direct Links, are boosting customer conversion and driving return on investment for advertisers and retailers. Partnerships with third parties, including Amazon and Google, are enabling Pinterest to monetize several unmonetized markets. For 2024, the company reported revenues of $3.65 billion, up 19% from the prior-year quarter’s revenues of $3.06 billion. The United States and Canada generated $900 million in revenues, up 16% year over year. Net sales surpassed our revenue estimate of $899 million. Solid momentum in retail and emerging verticals, including financial services and technology, supported the net sales. Revenues from Europe totaled $196 million, up 21% from $162 million in the year-ago quarter. The top line surpassed our estimate of $183.6 million. Healthy traction in retail boosted the top line.Net sales from the Rest of World rose to $58 million from $41 million recorded in the prior-year quarter, exceeding our revenue estimate of $53.3 million.MAUs from the United States and Canada were 101 million, up 4% year over year. The quarterly figure surpassed our estimate of 100 million. The Rest of World registered MAUs of 307 million, up 15% from 266 million in the year-earlier quarter. MAUs from Europe increased to 145 million from 135 million in the year-ago quarter and beat our estimate of 142 million.In the December quarter, the global average revenues per user (ARPU) stood at $2.12 compared with the year-ago quarter’s figure of $2.00. ARPU in Europe improved 12% year over year to $1.38, while the United States and Canada rose 12% year over year to $9. ARPU from the Rest of World increased 24% year over year to 19 cents.Other DetailsAdjusted EBITDA was $470.9 million in fourth-quarter 2024, up from the prior-year quarter’s tally of $369.3 million. Disciplined expense management and operational efficiency led to a 28% year-over-year improvement.Total costs and expenses were $892.5 million, up from $785 million in the year-ago quarter. On a GAAP basis, research and development expenses rose to $320.8 million from $268 million.Cash Flow & LiquidityIn 2024, the company generated $964.6 million of cash from operating activities compared with $613 million in 2023. As of Dec 31, 2024, Pinterest had $1.14 billion in cash and cash equivalents and $151.4 million of operating lease liabilities compared with $1.36 billion in cash and cash equivalents and $160.6 million of operating lease liabilities.OutlookFor the first quarter of 2025, Pinterest expects revenue in the range of $837-852 million, indicating 13-15% year-over-year growth. Management expects adjusted EBITDA to be in the range of $155-$170 million.PINS’ Zacks RankPinterest currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Upcoming ReleasesKeysight Technologies, Inc. KEYS is scheduled to release first-quarter fiscal 2025 earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.69 per share, indicating growth of 3.68% from the year-ago figure.  Zillow Group, Inc. ZG is scheduled to release fourth-quarter earnings on Feb. 11. The Zacks Consensus Estimate for earnings is pegged at 34 cents per share, indicating growth of 50% from the year-ago figure. Light and Wonder LNW is scheduled to release fourth-quarter earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.08 per share, indicating growth of 47.95% from the year-ago figure. Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. 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