Pinterest, Inc. (NYSE:PINS) is set to unveil its third-quarter 2023 financial results on October 30, following the market’s close. The company has consistently surprised investors with its earnings over the past four quarters, averaging a remarkable 66.19% earnings surprise. In the previous quarter, Pinterest reported an astonishing earnings surprise of 75%.
Pinterest is actively pursuing various strategies to enhance engagement between brands and customers on its platform. They’ve introduced a wide array of enhancements in their automated tools to boost the effectiveness of advertising campaigns and, in turn, increase revenue potential for retailers. Their focus on improving personalization on the platform is expected to drive user engagement and result in year-over-year revenue growth during this quarter.
Key Developments
Throughout the quarter, Pinterest rolled out several product updates and new features aimed at helping advertisers and agencies better connect with their user base of 465 million monthly users. The premium spotlight feature provides premium advertising spaces on the platform to improve ad visibility. This feature has been extended from search results to users’ home feeds, allowing advertisers to reach users as soon as they access the platform.
The introduction of quiz ad features enhances personalization on the platform. It enables brands to incorporate up to three questions per quiz, guiding consumers towards more informed decisions. These initiatives are expected to contribute to increased revenues in this quarter.
In the period under review, Pinterest has enhanced the capabilities of its automated business tools, including the Pinterest Business Manager. These tools are designed to assist agencies in better managing their clients’ presence on the platform. The advanced features include a comprehensive business dashboard for assessing the impact of advertising investments. Additionally, the introduction of the audience-sharing feature will help in the development of effective audience-targeting strategies. Pinterest is also developing a new tool, Creative Studio, which allows for the rapid creation of lifestyle images for brands’ product pins.
Pinterest is actively working to enhance the shopping experience on its platform. They’ve added direct links with mobile deep links, streamlining the user journey from product discovery to checkout. This feature also improves the sales conversion rate for retailers, as users can access the retailer’s website with a single click through a Pinterest ad, reducing the steps required for a purchase.
The company’s strong emphasis on e-commerce integration aims to create new revenue opportunities for retailers. Pinterest has collaborated with Salesforce Commerce Cloud and Adobe Commerce native applications to expand its e-commerce ecosystem. These strategic initiatives are expected to have a positive impact on the company’s third-quarter earnings.
Outlook
For the third quarter, we estimate the average revenue per user (ARPU) to be $6.30 for the United States and Canada and $0.90 for Europe. We anticipate approximately 95 million monthly active users (MAUs) from the United States and Canada in the third quarter, with an estimated 125.3 million MAUs from Europe and 239 million MAUs from the rest of the world.
The Zacks Consensus Estimate for total revenues in the September quarter stands at $743 million, indicating an increase from the year-ago figure of $685 million. Furthermore, the consensus estimate for adjusted earnings per share is pegged at 21 cents, up from the 11 cents reported in the previous year.
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