Pinterest Inc. shares were down at 16.7% in premark trading on Friday after the company reported more losses than expected in its first quarter results since its first public offering.
Pinterest reported a net loss of $ 41.4 million or 33 cents a share of revenue of $ 201.9 million, up from $ 131 million a year ago that the company reported in archives for its IPO. After adjusting for share-based compensation and other effects, the company claimed a loss of 32 cents per share. Analysts, on average, expected adjusted losses of 11 cents per share on sales of $ 200.7 million, according to FactSet.
PINS, + 7.79%
was published in April at $ 19 per share and has experienced volatility with a solid growth ever since. Stocks closed Thursday with a 7.8% gain of $ 30.86, and have now increased or declined more than 4% in half of Pinterest's 20 trading sessions so far.
Net losses can be very large in the first report following a stock exchange listing, as a fellow social media company Snap Inc.
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proved memorable, but it was not a problem for Pinterest because the quarter ended before the actual IPO took place. If the IPO had occurred in the quarter, it would have realized $ 975 million in these expenses, Pinterest said in a letter to shareholders, with an additional $ 925 million over the next 3.7 years. Instead, it claimed only $ 1 million in stock-based compensation.
Pinterest also said in the letter that a cost increase was mainly related to adding employees.
"Our total costs and expenses grew 32% the following year, and our non-GAAP costs and expenses increased by 35% the year before, reflecting growth in growth to enhance user experience and core technology while increasing sales coverage in the United States and internationally, the letter says.
See also: Five Things Investors Should Know From Pinterest's IPO Filing
Pinterest reported monthly active users – an important metric for social media that makes its money from Advertising – at $ 291 million, giving it an average revenue per user of 73 cents, it had 239 million monthly active users last year at this time and ended 2018 with 265 million users accessing the service monthly, according to IPO records. Analysts estimate an average of 288.7 million monthly active users, according to FactSet.
The vast majority of Pinterest's revenue comes from the United States, and increased amount of money d doing abroad is an important goal as the company aims to continue to increase sales. Pinterest reported domestic revenue per user of $ 2.25 and international per-user revenue of just 8 cents, after registering US sales per user of around $ 1.59 and foreign sales per user of about 5 cents last year.
International User Per User "is so low that you have to scrape it over and wonder what to change," says independent tech analyst and investor Beth Kindig, who bought a pledge on Pinterest shares ahead of the performance report after examining the company's international Problems.
You really need to get your international ARPU around $ 1 to run a business, "she added. "Finally, the United States will not be able to bear that growth."
In a conference call Thursday afternoon, CEO Ben Silbermann repeated a statement in the letter that Pinterest nearly doubled the number of international markets where there were serving ads since the end of last year, to 13 from seven. However, he said he had not expected Pinterest's international hiring and expansion work to start paying off next year.
"I wouldn't expect financial results [from international efforts] to add to the company's benefit until 2020, and through the course of the year, I expect it to accelerate," he said.
The company said it expects a full-year turnover of 1,055 $ 1.08 billion, analysts expect an average of $ 1.07 billion, according to FactSet.