Social-media platforms Snap Inc. SNAP -1.60% and Pinterest Inc. PINS 0.91% added millions more new users than expected in their latest quarters, showing strong growth in social-media use during the Covid-19 pandemic.
Snap, the parent of ephemeral-messaging platform Snapchat, ended the quarter with 265 million daily active users. Wall Street analysts were expecting the company to end the quarter with 257.8 million users, according to FactSet.
The growth of 16 million users is the most the company has seen in a single quarter since the second quarter of 2016 when Snap added 21 million. Snap said that during the quarter, users on average opened the app 30 times each day.
Image-sharing platform Pinterest ended the year with 459 million monthly active users, compared with 442 million at the end of the third quarter. Analysts were expecting 449.4 million.
Snap’s revenue jumped 62% from a year earlier to $911.3 million. Analysts were expecting $852.3 million.
“We saw many existing advertisers return to Snap and saw many new ones leverage our innovative ad formats and bidding capabilities to drive real business value on our platform,” Chief Business Officer Jeremi Gorman said in prepared remarks referring to the last half of 2020. She added that the company has become more confident that advertisers’ budgets will grow over time as they see a strong return on their investments.
Pinterest said its revenue climbed 76% to $706 million. The company said that increase was fueled by the holiday season starting earlier and product improvements that benefited advertisers. Analysts were expecting revenue of $645.7 million.
The strength in the digital-advertising businesses of Snap and Pinterest mirrors the surge in revenue that Google parent Alphabet Inc. and Facebook Inc. recorded in the final months of 2020. Both companies posted record revenue in the fourth quarter, helped by a surge in businesses stepping up spending during the holiday season as shoppers increasingly made purchases online.
For the quarter, Snap still reported a $113.1 million loss, or a loss of 8 cents a share, while Wall Street expected a loss of 7 cents a share. The company’s loss was $240.7 million a year earlier, or 17 cents a share.
The company reported adjusted earnings before interest, taxes depreciation and amortization of $45.2 million for the entire year. Chief Executive Evan Spiegel said in prepared remarks that 2020 was the first full year the company was profitable by that measure.
Pinterest reported earnings of $208 million. It logged adjusted earnings of 43 cents a share. Analysts were expecting 34 cents a share.
Write to Allison Prang at [email protected]
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Appeared in the February 5, 2021, print edition as ‘Snap, Pinterest Log Big User Growth.’
