Pinterest shares surge 18% on record revenue

Pinterest shares jumped 18% in early trading on Friday after the social media platform posted better-than-expected fourth-quarter earnings.
The San Francisco-based company reported fourth-quarter revenue of $1.15 billion, surpassing analyst estimates of $1.14 billion and marking its first-ever billion-dollar quarter. This represents a significant increase from the $981 million reported in the same period last year, reports Business Insider.
Pinterest’s chief financial officer, Julia Brau Donnelly, highlighted a 43% growth in ad impressions during the quarter. She emphasized that not only are ad impressions rising, but clicks to advertisers are increasing at an even faster rate, signaling improving ad relevance on the platform.
AI-Driven Ad Strategy and Future Growth
Analysts see continued upside potential for Pinterest’s ad business. Brian J. Pitz, an internet analyst at BMO Capital Markets, pointed to Performance+, the company’s AI-driven ad optimization tool, as a key driver of sustainable revenue growth in 2025.
Pinterest expects first-quarter 2025 sales to reach between $837 million and $852 million, exceeding previous forecasts of $833 million.
CEO Bill Ready credited the platform’s record 553 million monthly active users as a critical factor in driving advertising performance. He noted that Pinterest’s holiday shopping season started strong, with products featured in its curated gift guides receiving 40% more clicks than average items on the platform.
DEI Efforts Flagged as a Business Risk
Despite its strong financial performance, Pinterest acknowledged in its annual report that its diversity, equity, and inclusion (DEI) initiatives could pose potential business risks. The company warned that either doing too much or too little on DEI efforts could affect hiring, retention, and even its stock price.
"If efforts around diversity, equity, and inclusion are perceived as insufficient or overdone, we may not be able to attract and retain talent, we may be subject to investigations, litigation, and other proceedings, and our brand and reputation and stock price may be harmed," the report stated.
Following the strong earnings report, Bernstein upgraded Pinterest's stock price target to $47 from $34, citing the company’s well-executed strategy. "It’s hard to pick holes anywhere," the firm said in a note to investors.
Additionally, BYD Co.'s shares are experiencing their best week since late 2020, rising over 20% in five sessions.