Pinterest posted a strong fourth quarter, with revenue up 46% year-over-year to $399.898 million and 335 million monthly active users as of the end of 2019, up 26% from the same time one year earlier.
The company said it saw particular strength from its conversion optimization ad products and consumer packaged goods advertisers.
Pinterest’s GAAP (generally accepted accounting principles) net loss for the period was $35.718 million, compared with net income of $47.016 million in the fourth quarter of 2018.
The company achieved profitability on an adjusted EBITDA (earnings before interest, taxes, debt and amortization) basis, tallying $77.308 million in the fourth quarter, up from $51.862 million in the year-ago quarter.
Pinterest said in its shareholder letter, “Our EBITDA margin was flat year-over-year as we delivered a brand and comprehension marketing campaign in select cities and continued to make investments in headcount.
The company topped the $1 billion mark in revenue for the first time in the full year of 2019, totaling $1.143 billion up 51% year-over-year.
Pinterest’s GAAP net loss for full-year 2019 was $1.361 billion, eclipsing the $62.564 million it posted in the previous year, while its adjusted EBITDA was $16.706 million compared with a loss of $39.003 million in 2018.
The company reported 88 million U.S. MAUs, up 8% versus the prior year, and 247 international MAUs, up 35%.
Pinterest said in its shareholder letter that product improvements and improved conversion visibility drove year-over-year growth of 150% in conversion optimization revenue for the quarter.
The company added that revenue from shopping ads more than doubled in the second half of 2019 from the first half, with the number of monthly active advertisers buying those ads surging by 125%.
Pinterest said its dynamic retargeting product, which was enhanced during the third quarter, showed particularly strong uptake and performance.
The company wrote, “We continued to make improvements to our ad products across the board, especially for video. Standard-width video ads are now available on desktop, and video content creation is much easier after we enabled trim and crop functionality in our PinBuilder tool. In 2020, one of our priorities is to make advertising on Pinterest more automated and easier to use and scale. To this end, we recently launched automatic bidding for traffic objectives, which is designed to spend the entirety of an advertiser’s budget on our platform with the lowest possible cost per click.”
Pinterest also addressed improvements in measurement, saying that attributed conversions in the fourth quarter grew 2.5 times year over year, and giving some of the credit to a tool it debuted during the period to improve the quality of its tag integrations.
The company also pointed to its conversion analysis, which systematically shows advertisers how longer attribution windows enable them to measure more conversions, adding, “We have begun to use historical sales and conversion patterns to offer concrete guidance for our advertisers. We used this knowledge successfully in the fourth quarter to aid in media planning efforts, encouraging brands to spend earlier to influence Pinners as they plan for the holidays.”
Looking ahead to the rest of this year, the company added, “Online shopping is more inspiring when consumers trust sellers. In the coming months, we’re planning to launch the Pinterest Verified Merchants Program, which will be focused initially on fashion and home décor. Pinners will see VMP checkmarks next to all merchants in the program so that they’ll know they’re browsing and shopping from a brand that meets our guidelines. Merchants in the VMP will further benefit from comprehensive GMV (gross merchandise volume) reporting, which we expect to launch this spring.”
The company highlighted enhancements to its user experience, including video reactions for iOS and Android, its More Ideas tab and its compassionate search experience that suggests emotional well-being activities for users who look up relevant terms.
And the company said the load time for its home feed improved by over 20% in 2019, which is key in markets with slower internet speeds.
Pinterest co-founder and CEO Ben Silbermann said in the company’s earnings release, “A strong fourth quarter marked the end of a year where we improved the foundation of the Pinterest application with more inspiring recommendations, faster performance and improved shopping experiences. In 2020, we continue to pursue our goal of making Pinterest the Internet’s home for inspiration by focusing on delivering relevant content, ads and shopping experiences so Pinners can easily go from inspiration to action.”
Chief financial officer Todd Morgenfeld added, “We are pleased with the performance of our business in the fourth quarter and the many milestones we achieved in 2019. We scaled the business to over $1 billion in annual revenue, grew to over 300 million monthly active users and opened 21 new international advertising markets. We look forward to the opportunities ahead of us as we continue to invest in the Pinner and advertiser experience.”
Finally, the company outlined its goals for the rest of this year: “Our strategic priorities for 2020 include content, ads diversification, use case expansion and shopping. We will invest in these in the coming year, in addition to continued investments in sales coverage and research and development talent to support the Pinner and business initiatives. R&D efforts will continue to focus on our advertiser, measurement and creative tools. We intend to expand our international headcount further and scale our comprehension and brand marketing efforts in 2020. We think these investments will support long-term growth and continue to build the foundations for a more scalable business over time.”