Pinterest (PINS:US) stock traded over 16% higher on Tuesday after its sales exceeded expectations, driven by efforts to enhance the platform's e-commerce capabilities.
Sales for the third quarter reached $763 million, a growth of 11%, surpassing analyst expectations. Pinterest's outperformance was mainly due to its international operations, with the fastest growth coming from users outside the U.S., Canada, and Europe, constituting over half of its user base.
Pinterest's strategic investments in making the platform more shoppable and deploying artificial intelligence across its recommendation engine are paying off, as highlighted by CFO Julia Brau Donnelly on the earnings call.
Over the past year, Pinterest has refocused on increasing user engagement, improving monetization strategies, and enhancing operational efficiency. This approach has attracted users in a commercial mindset and driven better engagement through relevant ads.
“As we lean into Pinterest’s unique differentiators as a visual search, discovery, and shopping platform, we’re finding our best product market fit in years. Our users are engaging deeply and we’re delivering better results for advertisers through improved measurement and innovation across the full funnel,” said CEO Bill Ready.
Pinterest also reached a record 482 million monthly active users, surpassing its previous peak during the pandemic. Analysts were looking for 473.5 million.