Pinterest jumps 18% after reporting its first-ever $1 billion quarter and a strong sales outlook

• Pinterest stock surged 18% after reporting bumper earnings and a strong sales outlook.
• Revenue hit $1.15 billion, surpassing forecasts and marking its first billion-dollar quarter.
• Ad impressions rose more than 40% in the final quarter of 2024, the company's CFO said.

Pinterest stock jumped 18% in early trading on Friday after the social media platform reported better-than-expected fourth-quarter earnings and a strong sales outlook as its advertisement business booms.

The San Francisco-based firm said revenue was $1.15 billion, up from $981 million in the fourth quarter of 2023 and just above analyst expectations of $1.14 billion. It marks Pinterest's first-ever billion-dollar quarter.

Pinterest's chief financial officer, Julia Brau Donnelly, told investors on the company's earnings call that advertisement impressions increased by 43% in the most recent quarter.

"Ad impressions are growing while clicks to advertisers are growing faster than ad impressions, and ad relevance on our search surface doubled over the past two years," she said.

According to Brian J. Pitz, an internet analyst at BMO Capital Markets, Performance+, Pinterest's AI ad optimization tool, becoming available to all advertisers in the first quarter will help to create sustainable revenue growth in 2025.

The company said it expects sales in the first quarter of 2025 to reach between $837 million and $852 million, topping earlier estimates of $833 million.

Referring to Pinterest's record 553 million monthly active users, CEO Bill Ready said, "People are coming to Pinterest more often, the platform has never been more actionable, and our lower funnel focus is driving results for users and advertisers."

Ready told investors that the critical holiday season "kicked off with a bang" as products that featured in the firm's gift guides received 40% more clicks than the average item on the app.

Alongside its Q4 results, Pinterest also made public its annual report, in which it flagged that its efforts around DEI could be a potential business risk. Such initiatives have come under the spotlight in the first weeks of the second Trump administration.

It said that doing too much or too little regarding DEI could impact hiring, retention, and even the company's share price.

"If efforts around diversity, equity and inclusion are perceived as insufficient or overdone, we may not be able to attract and retain talent, we may be subject to investigations, litigation and other proceedings and our brand and reputation and stock price may be harmed."

Following its strong earnings, Bernstein has upgraded Pinterest's stock price target to $47, up from $34, citing the social media company as "executing across the board" and saying it was "hard to pick holes anywhere."