(Reuters) – Image sharing company Pinterest Inc <PINS.N> 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 <FB.O> 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 <GOOGL.O> and Facebook <FB.O>, 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.
Graphic: Rise in Pinterest’s monthly active users – https://graphics.reuters.com/PINTEREST-RESULTS/jbyprkxbyve/chart.png
Pinterest, which had withdrawn its full-year outlook in April, now expects current-quarter revenue to increase in the mid-30% range year-over-year, with revenue growth of about 50% for this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.
(Reporting by Ayanti Bera in Bengaluru; Editing by Devika Syamnath)