(Reuters) -A slowdown in Pinterest Inc’s user growth tarnished an otherwise strong quarterly report card, sending shares down about 10% aftermarket on Tuesday even though the company forecast current-quarter revenue above estimates.
With pandemic restrictions easing across the world, people are dialing down time spent on social media, but a boom in ad spending by companies helped soften the hit from tepid user growth.
Pinterest’s monthly active users (MAU), a widely watched metric, grew only 30% to 478 million in the first quarter. That was in contrast to last quarter’s 37% jump on a year-over-year basis.
“Starting in mid-March, the easing of pandemic restrictions slowed U.S. MAU growth and lowered engagement year-over-year as people spent less time online,” Pinterest said.
Besides the slowdown in user growth, Pinterest reported better-than-expected numbers in its reported quarter.
The image-sharing company said it expected revenue to rise 105% in the second quarter, which implies a figure of about $558 million, compared with a Refinitiv IBES estimate of $530 million.
Ad spending has recovered further this year from the slump in the early months of the COVID-19 crisis as an economic recovery picks up steam, prompting retailers to step up efforts to attract customers.
Pinterest forecast a mid-teens jump in global monthly active users in the current quarter.
Revenue, which is generated by placing advertisements next to users’ Pins or posts, soared 78% to $485 million, beating expectations of $473.7 million.
(Reporting by Nilanjana Basu in Bengaluru; Editing by Aditya Soni and Devika Syamnath)