Pinterest Is Soaring After Stellar Numbers -- Is the Best Yet to Come?

The stock market was having a generally negative day on Friday, with all three major market averages in the red at 10:30 a.m. ET. However, social media stock Pinterest (NYSE: PINS) was a major standout, with shares higher by more than 18%.

As you might expect, this move is driven by Pinterest's latest earnings report. Not only did the company beat expectations for revenue growth, but the numbers look solid throughout the report.

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User growth and monetization progress

When it comes to Pinterest's growth, there are two sides to the story. First, there's the user base -- after all, the more people who use the platform, the more money the company can make.

In the fourth quarter, Pinterest's user base grew to 553 million monthly active users. That's 11% more than a year ago and is the company's highest total ever.

Not only that, but the monetization of these users is improving, and in some very encouraging ways. Overall, average revenue per user (ARPU) grew 6% year over year, but it's important to note that the best growth was in Pinterest's non-U.S. users.

About 82% of Pinterest users are located outside of the U.S. and Canada, and there's a big monetization gap. The average user in the U.S. and Canada generated $9 in revenue in the fourth quarter, compared with $1.38 for a European user and just $0.19 from the 307 million users in the "rest of world" group. However, the latter group's ARPU was 24% more than a year ago, and if it can keep this up, the gap could narrow in the years ahead.

Strong guidance

Not only were the fourth-quarter numbers strong, but Pinterest's first-quarter 2025 revenue guidance was significantly stronger than expected.

In a nutshell, Pinterest's management is doing a great job of getting people to visit its platform, and to create valuable opportunities for advertisers. If Pinterest can continue to execute on its strategy, 2025 could end up being a great year for the business.

Should you invest $1,000 in Pinterest right now?

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Matt Frankel has positions in Pinterest. The Motley Fool has positions in and recommends Pinterest. The Motley Fool has a disclosure policy.