Is Pinterest's (PINS -0.83%) recent acquisition putting it on a path to profitability? In this clip from "3 Minute Stocks Updates" on Motley Fool Live, recorded on June 22, Motley Fool contributor Rachel Warren discusses Pinterest's recent quarterly performance and why its stock is one to watch.
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Rachel Warren: Looking at the most recent quarter, it was a very mixed period of growth for the company. Revenue was up 18% year-over-year, although the company is still not profitable on a GAAP basis. Its net loss was actually an improvement of 76% year-over-year. That number that a lot of investors have been paying attention to, monthly active users globally, those were down 9% year-over-year to 433 million in the first quarter of this year. Looking at the company in the U.S. and Canada, revenue was up 15% year-over-year. Its revenue in the rest of the world was up 152% year-over-year, so it's been seeing a lot of growth outside of the U.S., Canada, and Europe, and is continuing though to see declines in monthly active users both globally across the U.S., Canada, Europe, and the rest of the world although average revenue per user continues to grow in the double or triple digit percentage area. This is a stock that had really mixed performance over the last several quarters. I like to see this most recent acquisition that they did. I think this is an interesting move for Pinterest. They had recently announced partnerships with a variety of companies to introduce augmented reality on their platform. Where, for example, if there was a furniture piece you want to buy, you could use the Pinterest platform to see how it might look in your living room. But this is a company that I think they really need to be making some meaningful changes in not only how they're monetizing users, but in that monthly active user growth. I think that's something to watch.