Advertisement demand drives Pinterest's quarterly results; shares surge 28%

Image sharing company Pinterest Inc said advertising demand began to improve in May as it reported better-than-expected quarterly results, sending its shares nearly 28% higher.
 

More people turned to Pinterest's platform for content to keep themselves entertained during coronavirus lockdowns, leading to a 39% jump in monthly active users to 416 million in the quarter, beating estimates of 372.7 million.
 

In a post-earnings call, Chief Financial Officer Todd Morgenfeld said the ad boycott on Facebook's platform gave Pinterest "an opportunity to win some budgets and educate advertisers about how and why Pinterest is different." Ad spend recovered from a slump since mid-March as economic activity resumed following the easing of lockdowns, Morgenfeld said.
 

Both Google and Facebook, which rely heavily on digital advertisement, reported strong ad sales on Thursday.
 

Pinterest also benefited from its updated shopping feature, with a 50% growth in users who visited shopping-only feeds in the first half of the year.
 

Pinterest, which had withdrawn its full-year outlook in April, now expects current-quarter revenue to increase in the mid-30% range year-over-year, with revenue growth of about 50% for this month through July 29.
 

The company slashed total expenses by about 74%, helping it narrow net loss to $100.7 million in the quarter ended June 30 from a loss of $1.16 billion last year.
 

Excluding items, Pinterest reported a loss of 7 cents per share, smaller than an estimate of 14 cents.
 

Total revenue rose 4% to $272 million, beating analysts' average estimate of $251.2 million, according to Refinitiv IBES data.