Published on 25 Apr 2024 on Zacks via Yahoo Finance

Will Top-Line Expansion Boost Pinterest's (PINS) Q1 Earnings?

Pinterest, Inc. PINS is scheduled to report first-quarter 2024 results on Apr 30, after the closing bell. The company pulled off a trailing four-quarter earnings surprise of 37.42%, on average. In the last reported quarter, it reported an earnings surprise of 3.92%.The company is expected to witness a top line expansion year over year, driven by growing demand for its comprehensive set of ad tools, increasing user engagement on the platform. Management’s initiative to increase shoppable content and efforts to enhance personalization for users will act as a tailwind. Focus on operational efficiency and investments in AI integrated tools are positive factors.

Factors at Play

During the quarter, Pinterest introduced the “The P is for Performance” campaign to promote its comprehensive product suites that include Mobile deep links, Direct Links, The Pinterest API for Conversions and Shopping ads. The company is aiming to garner the attention of advertisers who are looking to increase their conversion rate on the platform.The campaign emphasizes that Pinterest serves as a powerful tool for advertisers throughout the entire marketing funnel, driving conversions, increasing traffic, and offering measurable outcomes and is not just a platform for brand awareness. The campaign reveals that advertisers on Pinterest are witnessing 28% growth in conversion and 96% growth in traffic. These initiatives are likely to have translated into higher revenues in the quarter.In the quarter under review, Pinterest launched its streaming show, “Deliciously Entertaining,” in partnership with Tastemade. It enables users to scan on-screen QR codes from each episode that links to Pinterest boards with shoppable pins. The first-ever streaming show by Pinterest will enhance user engagement by providing shoppable and actionable content directly on the platform. In a bid to offer its users more personalized and relevant search results, the company introduced a tool called ‘body type ranges.’ The tool is currently available for women's fashion and wedding-related content. This is likely to have been reflected in the upcoming quarterly results.Our estimate for average revenues per user (ARPU) from the United States and Canada is pegged at $5.56. Our estimate for Europe’s ARPU is pegged at $0.87. Per our estimate, monthly active users (MAUs) from the United States and Canada are expected at 97 million in the first quarter. MAUs from Europe are approximated to be 142.7 million. MAUs from the rest of the world are estimated at 288.2 million.For the March quarter, the Zacks Consensus Estimate for total revenues is pegged at $699 million, suggesting an increase from the year-ago quarter’s reported figure of $603 million. The consensus estimate for adjusted earnings per share is pegged at 14 cents, up from 8 cents reported in the prior year.