What happened

Shares of social media phenomenon Pinterest (NYSE:PINS) are marching higher -- up 11.8% as of 9:55 a.m. EST -- after the image-posting website announced powerful sales and earnings growth after-hours Thursday.  

Analysts had predicted that Pinterest would earn $0.08 per share (pro forma) on sales of $371.2 million. Instead, Pinterest reported pro forma profits of $0.12, and sales of $399.9 million.  

Finger pointing at pushpins on a blue field

Image source: Getty Images.

So what

Rounding up ever so slightly, Pinterest boasted that it hit "$400 million" in sales in Q4 2019, 46% year over year growth, and "exceeded $1 billion in revenue for the first time as a company. 2019 sales grew 51% year over year to $1.14 billion. On the downside, while Pinterest says it was more profitable than Wall Street expected on a non-GAAP (i.e. pro forma) basis, when judged under generally accepted accounting principles, the company still lost $0.06 per share for the quarter -- and lost $3.24 per share for the year.

On the plus side, operating cash flow finally turned positive in 2019 ($657,000). Subtracting capital spending from that, free cash flow ended 2019 at negative $33.1 million -- which was still less than half the cash burn Pinterest suffered in 2018, so a marked improvement.

Now what

Looking ahead to 2020, Pinterest made no promises of profitability, nor free cash flow. The company did, however, say it expects sales to surge ahead by a third, to $1.52 billion, with an "adjusted EBITDA margin of 1%," laying the foundations for continued "long-term growth and ... a more scalable business over time."

Judging from today's share price action, it seems investors agree with that prediction.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.