In this video, I will be covering the good, the bad, and the ugly sides of Pinterest's (NYSE:PINS) Q2 earnings report. The stock crashed 20% after the market closed as the company missed on user growth and didn't provide guidance. However, revenue grew 125% year over year (YOY) and 26% quarter over quarter (QOQ) despite a decrease in monthly average users (MAUs). In the second quarter, MAUs on mobile apps grew in the U.S. and internationally, year over year, by more than 20%. You can find the video below. 

What happened

Pinterest beat on earnings with second-quarter revenue of $613.2 million and earnings per share of 25 cents. However, Pinterest's stock still tanked as the company reported MAU growth of just 9% to reach 454 million. Some further key numbers:

  • Global MAUs up 9%, down 5% quarter over quarter.
  • US MAUs down 5% YOY and quarter over quarter.
  • International MAUs up 13% but down 4.5% QOQ.
  • Average revenue per user (ARPU) globally up 89% year over year and 27% QOQ.
  • U.S. ARPU up 103% YOY and 27.32% QOQ.
  • International ARPU up 163% YOY and 38% QOQ.

The current expectation is that Q3 revenue will grow in the low 40% range year over year. The company expects Q3 operating expenses will grow modestly quarter over quarter as it continues to ramp up investments in long-term strategic priorities, with plans to resume brand marketing campaigns in early Q4. No guidance was given on MAUs. 

So what

Every social media platform has gone through a rough period where user growth stagnated or even decreased. COVID affected Pinterest's growth for the better and for the worse. Many people went on Pinterest during lockdown because they were looking to get inspired while stuck at home; now that the world is reopening, you see the opposite effect. So while the pandemic did increase Pinterest's user base, some of those users aren't the type that Pinterest usually attracts, and that's why you see a decrease. On the flip side, those who do stay on the platform are getting monetized much better. 

For the full insights, watch the video below. 

*Stock prices used were the closing prices of July 29, 2021. The video was published on July 30, 2021.

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