(Reuters) -Pinterest forecast current-quarter revenue above Wall Street estimates on Thursday, a sign of growing advertising spend on the social media platform despite uncertainty over marketing budgets.
Shares of the company were up 11% in extended trading.
The company’s emphasis on direct response ads — designed to prompt specific actions like shopping, app downloads or website visits — continues to drive ad spend, even as brand awareness advertising is weak.
Pinterest’s results follow the termination of a duty-free import loophole in the U.S., which, combined with deepening trade tensions, has constrained ad budgets for some social media platforms.
But Facebook-parent Meta and Reddit topped revenue expectations in the first quarter on strong ad sales. In contrast, smaller rival Snap said that it would not issue a quarterly forecast due to economic uncertainty, as advertisers favor bigger platforms in tough times.
“As the macroeconomic and digital ad landscape evolves, our strategy and consistent execution have made Pinterest more resilient than ever,” CEO Bill Ready said in a statement.
Pinterest’s Gen Z users, who comprise over 40% of its user base, along with its artificial intelligence tools for creating personalized ad campaigns, make the social media platform increasingly attractive to advertisers.
The company expects second-quarter revenue of $960 million to $980 million, the midpoint of which was above the analysts’ average estimate of $966.3 million, according to data compiled by LSEG.
It expects adjusted earnings before interest, taxes, depreciation and amortization of $217 million to $237 million for the second quarter, compared with estimates of $233.1 million.
Revenue grew 16% to $855 million for the first quarter ended March 31, beating estimates of $846.6 million.
Global monthly active users on the platform rose 10% to 570 million, exceeding estimates of 564 million.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Alan Barona)
