At the point when a small upstart specialist is considered a mainstream mass-market company, investors celebrate. For a long time, the market considered Pinterest (NYSE:PINS) a niche player in the social media space, but no longer. On a Fool Live episode recorded on June 30, Fool contributor Brian Feroldi discusses why this social media platform has moved beyond its niche status and what investors should be watching for in the coming quarters.

Brian Feroldi: Okay. Let's talk about a little up-and-coming social network called Pinterest, ticker symbol PINS. Pinterest just had a fabulous 2020. It's been up and to the right pretty much. If you look at the company's recent results, they understand why. Monthly active users on this platform grew 30 percent to 478 million. A lot of people are saying Pinterest is a very niche product offering. It's now at almost half a billion users. That is a quarter of Facebook. Yes, niche compared to Facebook, enormous in absolute terms.

What's exciting about this company is that not only are monthly active users growing quickly, but average revenue per user is still just tiny. Last quarter, it was $1.04. That was up 34 percent over the prior year. You combine those two things together and this company's revenue grew 78 percent to 485 million. Better yet, gross margin expanded 600 basis points to 72 percent and adjusted net income was $79 million. In the year-ago period, it lost $60 million. Balance sheet is also what we do expect for high-quality tech company, two billion in cash, zero debt.

Now, as Brian teed up before with Shopify, a problem is that management said that they think that the pandemic pulled forward a lot of their user growth. They said that they don't expect the user growth for the rest of the year to be all that robust. However, what's exciting is that while the user growth has slowed down, they said the Pinterest shopping engagement has remained just as strong as it was prior to the pandemic. User growth might not be strong, but it's reasonable to assume that average revenue per user will go up.

They also called out that they have a partnership with Shopify that is really helping small businesses to get up and running and to be successful on the platform, and next quarter, revenue is expected to jump 105 percent. In my opinion, thesis on track.

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