Photo sharing and organizational app Pinterest (PINS) reported Q4 earnings after the bell on Feb. 6. The company shared a net income of $17 million and $0.29 cents per share, up from the expected $0.27 per share that Wall Street was looking for.
Results were mixed; Pinterest indicated a dimmer forecast for Q1 of this year, indicating it would be seeking revenue in the "low single digits" compared to the year prior. The stock slipped on the news and is down over 5% as of this writing.
But these are short-term growth expectations. Pinterest has been spooking investors for quarters with its mixed bag of financials; usership goes up but revenue stays stubbornly stagnant as advertising lags across the tech industry.
What's far more interesting is Pinterest's longer-term play into a captivating -- and potentially highly lucrative -- sphere of media.
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Pinterest Is Rapidly Expanding Video
Pinterest made a name for itself by offering users a one-stop shop for visually captivating images and inspiration. Users can follow, discover, and save everything from home decor to hairstyles and recipes, and its unique organizational "board" layout makes it quite easy to recall an image saved months ago.
But as more apps increasingly move away from still images and into video, Pinterest is looking to pivot and capture more than a few eyeballs in doing so.
"In Q4, Gen Z was once again our fastest-growing cohort, growing double digits and accelerating from Q3. We're building an experience that resonates with this audience on Pinterest, specifically around video," CEO Bill Ready said on the Q4 earnings call. "In fact, nearly half of all new videos pinned in Q4 were from Gen Z users."
Gen Z is the generation born between 1997-2012 and overwhelmingly prefers video sharing apps like YouTube, TikTok, and Instagram (which has made recent pushes into the short video space).
"And in Q4, Gen Z sessions grew much faster than sessions from our other demographics," Ready said. "Last quarter, we grew our supply of video content 30% quarter over quarter, and we recently announced a deal with Condé Nast Entertainment to create high-quality video content aligned with Pinterest's key seasonal and cultural moments like fashion month, wedding season, summer, and back to school."
Video Makes Money and Pinterest Drives Meaningful Engagement
Pinterest is betting its app will be a natural destination for video, since many users already have meaningful interactions on the platform. In other words, Pinterest use the app as a destination -- somewhere they're actively searching for and engaging with content, rather than just absent-mindedly scrolling. Which is exactly why CEO Bill Ready wants to meet users where they already are and captivate them with video.
"We believe high-quality and inspiring content will further deepen engagement, especially for Gen Z. Monetization per user should also be driven by our ads initiatives," Ready said. "Pinterest is unique because users come to our platform with intent, and we are one of the few places where people can go from seeking inspiration to fulfilling that intent through action."
Pinterest has already experimented with shopping features in the app, with less exciting results. The company recently transitioned its head of shopping into an adviser as commerce ostensibly slows on the platform.
But Pinterest, based in the U.S. may be expanding its video presence at the right time. U.S. officials have been weighing a ban on TikTok, which is owned by Chinese firm ByteDance, for years now, and Texas Gov. Greg Abbott announced a ban by the state on Monday.
