Pinterest's Popularity in the U.S. Is Driving the Stock to New Heights

Pinterest (PINS 0.21%) has built a massive $1.7 billion annual revenue business by growing and monetizing its U.S. user base. Shareholders are thrilled with the results as they've been rewarded by a stock that's more than tripled over the past 12 months. But for those investors who might think they've missed out, you haven't. The company has barely tapped into its international opportunity, which could propel growth long into the future.

On an episode of Motley Fool Live, recorded on Feb. 4, Motley Fool contributor Brian Feroldi dives into the company's most recent results and examines the massive runway of opportunity this social inspiration platform has around the world. 

Brian Feroldi: Yes, let's get into Pinterest. Pinterest reported fabulous results across the board, is the 10-second takeaway for Pinterest. If you want more details, here we go. Do you own Pinterest? No. Maybe we can convince you to change that after seeing this.

So Pinterest fourth-quarter results. Let's go with the headline number that Wall Street cares about. So monthly active users. Monthly is the key word there. Facebook reports daily, Twitter reports daily, Pinterest is a monthly [number]. It's not it's not an addictive social network that you go to on a daily basis, you go there to look for inspiration. So that's the metric that they report.

Monthly active users of 459 million, that was up 37% year over year. Better yet for investors, is they monetize those users at a higher rate. So average revenue per user, ARPU, that's the key metric for social networks, was up 22% to a $1.57. So they're doing a great job in growing the total number of users and squeezing more revenue out of each one. Add that together, revenue was up 76% to $705 million. Wall Street only expected $646 million. So, much faster growth than expectations. Earnings per share were up to 43 cents on a non-GAAP basis. The year-ago period was negative earnings on a non-GAAP basis, so there isn't a comparison other than to say it was a tremendous turnaround that was also well ahead of Wall Street's expectations. So headline numbers were fantastic is the big takeaway.

I thought that Brian Stoffel will get a kick out of this. Right in the beginning of their shareholder letter, "our mission is to bring everyone the inspiration to create a life they love." So this is a mission-driven company, and they regularly say that, not only in the shareholder letter, they also said that on the conference call, Brian.

So here are, again, the headline numbers. We will look on the left-hand side here first, which is the month-over-month. Revenue globally was up 76%. Revenue in the United States, which is their biggest market by far, although we'll get into the user difference, was up 67%. International revenue, which is very early on in the monetization days, more than doubled from $50 million to $123 million. So international revenue is really growing fast, although revenue domestically also growing fast.

From a user perspective, monthly average users in the United States was only up 11%, they've captured 98 million. I don't know how much higher this number is going to go because Pinterest is a more niche products than something like Facebook would be, so it's hard for me to gauge how big this number could go. Maybe 250 million over a long period of time, but I got to say double-digit growth and there is a fantastic result.

International number is a different story. This is a very user-focused international company, so user growth there was 46%, 361 million. Here's what's interesting, look at the difference in average revenue per user between the United States and international. Almost $6 in average revenue per user for each U.S. customer and only 35 cents for international. So you mix them together and that get's a global of a $1.57, and both of these numbers were up significantly again with international really driving the big gains.

The numbers look really good for the full year. Revenue was up almost 50%. That was impressive because COVID, the first quarter, which is when they were in the teeth of COVID, their revenue growth really slowed to a crawl, and boy, has it reaccelerated since there. So pretty good year-over-year numbers, too.

Here's more look at that user [metrics]. You can see graphically the difference between the two and how many more users are on the international stage. This paints a picture of about how much revenue is coming from the U.S. versus international. But again, both categories are growing very strongly in the international one in particular. I think it has a long way to go, and there's ARPU. Now, I put this slide in here just to showcase the differences. So again, the average U.S. customer of almost $6 in average revenue and international, 35 cents.