Pinterest Inc (NYSE:PINS). shares rose Friday after the image-sharing company delivered its first annual net income after the market close on Thursday.
The firm posted strong advertising revenue, driving its fourth-quarter results past Wall Street expectations. Pinterest's revenue in the quarter ended December 31, 2021, rose by 20% to $846.7 million, surpassing analysts' estimate of $827 million.
Net income was $175 million. Excluding items, it earned $0.49 per share, also higher than the estimate of $0.45.
READ: Pinterest beats revenue and profit forecasts; sees fourth-quarter revenue growth in high teens
Its 4Q results helped softened the blow from a shrinking user base. Pinterest's monthly active users (MAUs) dropped by 6% to the lowest since June 2020 as the coronavirus pandemic-driven surge in demand cooled off.
MAUs - a key metric that shows engagement levels on the website - was 431 million for the quarter, missing estimates of 447.95 million.
But the company has doubled down on its efforts to boost advertising income, focusing on scaling up video features like Pinterest TV and Idea Pins, and boosting influencer marketing in a space dominated by YouTube, Instagram, and TikTok.
Pinterest chief financial officer Todd Morgenfeld said the company was investing in native video content and creator-led content as it believes this adds to engagement and revenue. "The early data make us cautiously optimistic," he said in the earnings statement.