After demonstrating strong and consecutive user growth over the past 2 years, Pinterest has taken a knock with a decline in overall users.
Over the past 3 months, the image sharing platform has lost 24 million users. According to Pinterest, this loss is due to the negatively impacted adoption of eCommerce and online browsing as a result of the global vaccine rollout and re-opening of physical stores.
According to Pinterest: “Fewer MAUs came to Pinterest during Q2 than we expected. The primary driver of slower year over year MAU growth globally, and year over year MAU declines in the US, was the widespread easing of pandemic restrictions. As lockdowns lifted, people spent less time at home in Q2 2021 vs. Q2 2020. Given that many of Pinterest’s core use cases (e.g., decor, garden, cooking, DIY) are especially relevant at home, we believe we disproportionately benefited from increased time spent at home during pandemic lockdowns.”
To put things into perspective – Pinterest’s overall user count skyrocketed from 367 million in Q1 20 to 416 million in Q2 20. However, the results attained in 2020 were atypical – the pandemic caused an unnatural, unsustainable surge in user growth. As worldwide restrictions started to ease, Pinterest’s userbase started to look dimmer and dimmer.
Inevitably, the numbers look bad, but if you exclude the pandemic influx, Pinterest would have actually posted good performance with an increase of 17.4m new users per quarter over the past year.
Shopping & Search Engagement Remain Strong
Pinterest notes that besides the loss experienced in users, search and engagement still remain solid and people are still buying through the app.
Thanks to Pinterest’s improved feed ingestion processes, brands were given more opportunity to get their products in front of customers. So, while the platform may not have as many users, it proves itself to be valuable to facilitate shoppable Pins and provide in-stream buying experiences.
With regards to revenue, Pinterest brought in $613 million for the quarter, which is 125% YoY increase.
With eyes forward, Pinterest tells us: “Our current expectation is that Q3 revenue will grow in the low-40% range year over year. We expect Q3 operating expenses will grow modestly quarter over quarter as we continue to ramp investments in our long-term strategic priorities, with plans to resume our brand marketing campaign in early Q4. Engagement headwinds on Pinterest have continued in July. The evolution of the COVID-19 pandemic and related restrictions remain unknown, and we are not providing guidance on Q3 2021 MAUs given our lack of visibility into certain key drivers of engagement.”