Pinterest: Stabilizing users, alignment with top investor are priorities

Pinterest takes public stock on the New York Stock Exchange

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Pinterest’s (NYSE: PINS) Investors enjoyed a post-IPO recovery rally on Monday, as the company’s shares rose more than 21% in after-hours trading after an earnings report was released showing earnings came in line with expectations, the company modestly forecast growth in the third quarter, and top investor Elliott Management expressed support for Bill Ready, the company’s new CEO.

Ready took over as Pinterest (PINS) top executive over a month ago, and on his first quarterly earnings call, he said he joined the company because it “gives people a digital experience that’s really unique and positive because we are just beginning to unlock the possibility that experience must create value for users and advertisers.”

E-commerce is in Ready’s background, and Henne said it’s key to his interest in Pinterest.

“Having spent most of my career in commerce and payments, I know there are many places to shop online, but there are very few online destinations where you can actually shop,” said Ready. “That means browsing and discovering and being inspired before you buy. Pinterest is very unique, offering inspiration, discovery, and strong user intent all in one place.”

Activist investor Elliott Management was quick to speak out following the Pinterest (PINS) results, as he confirmed he is the company’s key stakeholder and also offered a vote of confidence in the CEO change from co-founder Ben Silbermann to ex-Googler Ready on.

Ready said the call will focus on results rather than Elliott, but commented in response.

“We recently had a very collaborative and engaging dialogue with Elliott; they agree with our vision and what Pinterest can become; they support our team and our efforts and see the same tremendous potential for long-term value creation. I do,” said Ready. “I look forward to continuing to work with Elliott, as they will with our other shareholders, and see their investment as a vote of confidence in Pinterest’s future.”

Revenue came in as expected, but Pinterest (PINS) found that it was losing users in all regions year-over-year. The company said earlier this year that it wouldn’t provide a user growth outlook, but would provide some context on engagement for the second half.

“With the pandemic largely behind us, we believe monthly active users worldwide will return to more typical seasonal engagement patterns in the second half of the year,” said Todd Morgenfeld, Pinterest’s (PINS) chief financial officer and head of business operations.

Morgenfeld said these seasonal patterns “typically show modest sequential growth” as the company moves into the third and fourth quarters of the year. However, Morgenfeld said those trends “may be a bit more muted than they have been in the past. And specifically for the US, Canada and Europe, we hope to stabilize our user base in the second half of the year.”

Morgenfeld also said that Ready is evaluating the company’s capital position and that Pinterest (PINS) has accelerated many desired investments into 2022 — and they expect to see the benefits of those investments over the next year, so “as such, we plan to make a significant one.” Marge to return for expansion in 2023.”

The company has about $2.7 billion in cash on its balance sheet and is discussing how to allocate it, including “prudently and strategically” with respect to future mergers and acquisitions. In Q2, Pinterest (PINS) got the yes, a move to boost commercial intent on the platform.

See the Pinterest Results Views (PINS) presentation for more details. Pinterest: Stabilizing users, alignment with top investor are priorities

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