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The projected growth rate indicates a positive trend and an acceleration from the company’s performance over the last three quarters. By comparison, Pinterest’s revenue grew by 8% year-over-year in Q3 2022, while competitors like Meta Platforms (NASDAQ:META) saw a 4% decline in revenue.
Julia Donnelly, Pinterest’s Chief Financial Officer, underscored the significance of this guidance during the presentation. She stated that the company aims to outpace the overall market in terms of revenue growth through various strategies, targeting a mid to high-teens compound annual growth rate over the next three to five years.
However, Donnelly cautioned investors about an important assumption inherent in their optimistic guidance: it is based on a “stabilized to slightly improving digital advertising market” in the future. This assumption aligns with current market conditions, suggesting that Pinterest’s positive outlook is predicated on a steady state.
The projected revenue growth could be beneficial not only for Pinterest but also for other tech companies heavily reliant on digital advertising revenues. In this challenging landscape characterized by high interest rates and inflationary pressures, forecasting ad spend can be daunting. Many companies whose revenues are predominantly ad-driven are trading below their peak values.
In related news from earlier this month, connected-TV operating system provider Roku (NASDAQ:ROKU) also reported positive news. The company increased its third-quarter revenue guidance and now anticipates a Q3 revenue growth rate as high as 15%. As a significant part of Roku’s business is derived from advertising revenue, this metric provides further optimism for stakeholders in the digital advertising space.
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