Pinterest CEO: We are aiming to 'build a positive platform'
New Pinterest (PINS) CEO Bill Ready is staying focused on the mission at hand despite a tough reaction by the market to fourth-quarter results and first-quarter guidance.
"Our mission is to go build a positive platform where users can find the inspiration to build a life they love, and we're seeing really great progress on that," Ready told Yahoo Finance Live (video above). "The best evidence of that is we grew engagement with users by double-digit percentage points, and we have returned to user growth."
Ready, who took over as CEO in June 2022 after a career spanning the likes of PayPal and Google, stated he is focused on making Pinterest a more "shoppable" platform to drive sales — tapping into his experience in commerce at the aforementioned tech giants. Those efforts, coupled with fresh cost cuts, are expected to drive margin expansion this year for Pinterest in the face of a challenging ad sales market.
Despite the progress on Pinterest's transformation, the stock fell 5% on Tuesday following a soft first-quarter outlook due to the economic-fueled ad market challenges tripping up social media players like Meta (META), Snap (SNAP), and Twitter.
Here is how Pinterest performed compared to Wall Street estimates:
4Q22
Net Sales: $877.2 million vs. $887.2 million
Adjusted EPS: $0.29 vs. $0.27
Monthly Active Users (MAUs): 450 million vs. 449.8 million
Average Revenue Per User (ARPU): $1.96 vs. $1.98
1Q23 Guidance
Net Sales: to grow by "low single digits" percentage year over year
Expenses: to drop by a "low double digits" percentage quarter over quarter
Ready noted it's unclear when the ad market will bottom.
"It's a choppy market overall," he said.
Wall Street analysts continue to eye Pinterest with intrigue as it steers operating margins toward the right trajectory.
"Near-term, we don’t see Pinterest escaping the ad winter pressure that practically every other internet ad company is going through," EvercoreISI analyst Mark Mahaney wrote in a client note. "We are assuming that revenue growth will begin to stabilize or even accelerate in Q2:23, tho there is currently no real evidence that this will happen. We are intrigued by PINS’ very large user base (450MM MAUs), its differentiated and fullfunnel marketing solution for marketers (especially for commerce & brand marketers), its recent cost efficiencies, and the potential for better execution under new CEO Bill Ready."
Mahaney maintained a Neutral rating on Pinterest shares.
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Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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