Like other online platforms, Pinterest reaped the benefits of an uptick in e-commerce advertising during the holiday season.
The image-sharing platform saw a 76 percent year-over-year jump in fourth quarter revenue, to $706 million, the company said Thursday. Pinterest had 459 global million monthly active users (MAUs) in the fourth quarter, up from 442 million in its third quarter.
Pinterest said in its letter to investors that its revenue growth was mostly driven by a robust holiday season and product improvements in advertising. It saw a six-fold increase in the number of businesses that used its shopping ads format during the fourth quarter.
“We welcomed over 100 million additional monthly active users to Pinterest in 2020, more than any other year in our history,” CEO and co-founder Ben Silbermann said in a statement. During a call with analysts Thursday, Silbermann said the company was encouraged by its growth among Gen Z consumers, who he said are well-served by other social media platforms, but come to Pinterest “because they want spaces where they can explore their own interests and hobbies.”
Pinterest saw revenue in the US — its biggest market — rise 67 percent in the fourth quarter, to $582 million.
“Our investments in ad tools and sales coverage continued to pay off, especially during a strong holiday season. Advertising demand was healthy across different advertiser sizes and verticals, with retail demand further building off last quarter’s recovery,” the letter said.
In response to an analyst question about Pinterest’s roadmap for helping creators make money on the platform, Silbermann said the company was bringing on creators known for their ability to teach something rather than pure entertainment. And Pinterest content has a much longer shelf life than other online platforms, he said.
“[Pinterest] creators are in an environment where there’s a strong search dynamic, more like YouTube than other social spaces that tend to be more ephemeral,” he said. The company also is experimenting with things like sponsored story pins, Silbermann added.
The company’s growth comes amid allegations of a toxic work environment; a group of shareholders is suing Silbermann and other top Pinterest executives for “marginalizing women who dared to challenge Pinterest’s White, male leadership clique,” and hurting the company’s reputation, the complaint alleges. Several women sued the company last year, alleging racial discrimination, and its former COO said she was underpaid compared to her male colleagues.
Pinterest shares were up more than 10 percent in after-market trading Thursday.