(Reuters) - Image sharing company Pinterest Inc beat analysts’ estimates for fourth-quarter revenue and profit on Thursday, as efforts to improve user interaction and expand globally paid off, sending its shares surging 17% in extended trading.
The company also beat estimates for average revenue per user and provided a bullish 2020 sales forecast as measures like adding augmented reality features to its platform and expanding into markets like Denmark, Norway and Switzerland attracted more users.
“We’ve seen great success in monetizing in English-speaking countries outside of the U.S. and the investments we’ve made in Western Europe are paying off nicely,” Chief Financial Officer Todd Morgenfeld said on a post-earnings call.
Total revenue jumped 46% to $400 million in the fourth quarter, while monthly active users climbed 26% to 335 million globally.
Financial analysts tracked by Refinitiv had expected revenue of $371.2 million, while user additions were projected at 331.3 million by market research firm FactSet.
“The impressive revenue upside shows Pinterest is back on track following the air pocket the company hit in Q3,” said Atlantic Equities analyst James Cordwell.
Pinterest missed Wall Street estimates for quarterly revenue in the third quarter on lower-than-expected average revenue per user. Shares tumbled 19% on Oct. 31 after the release.
The company on Thursday also beat estimates for average revenue per user, reporting $1.22 per user globally compared with expectation of $1.14, according to FactSet. Average revenue per user was $1.06 a year earlier.
Pinterest generates revenue by placing ads next to pins or posts in the feed that users, or “Pinners”, upload to its platform.
The company overtook Snap Inc’s Snapchat as the third-biggest social media platform in the United States in 2019, according to market researcher eMarketer and its worldwide digital ad market share grew slightly to 0.3%.
“This year, we plan to focus on improving the experience from mid-sized and international advertisers,” said Chief Executive Officer Benjamin Silbermann.
Pinterest is one of the exceptions among the so-called unicorns, or startups valued at more than $1 billion, that went public last year.
The company’s shares are up 22% since the listing in April, while Uber Technologies Inc’s stock is down 17% and its rival Lyft Inc 34% since their IPOs.
Pinterest forecast 2020 revenue of up to $1.52 billion, while analysts were expecting $1.50 billion.
Excluding certain items, the company earned 12 cents per share in the latest quarter, beating estimates of 8 cents.
Reporting by Amal S in Bengaluru; Editing by Sriraj Kalluvila