Pinterest has shared its latest performance update, which shows a continued decline in active users as a result of more regions coming out of lockdown, and shoppers returning to physical stores, while revenue remained steady, despite challenges in the market.

First off, on usage – Pinterest’s total MAU count declined to 444 million in Q3, down 10 million on the previous reporting period.

As you can see here, its Q2 numbers were down 24 million MAUs before that, so over the past two periods, after a long stretch of steady growth, Pinterest has lost some 34 million active users overall.

That’s not a good sign - but then again, the volatile market conditions, as a result of COVID, are tough to predict, and of all the social platforms, Pinterest, with its focus on shopping, was always the most likely to be hit hard by the re-opening of physical stores.

During the lockdown period, in which Pinterest added over 100 million more active users, the platform touted itself as a virtual shopping mall, and a replacement for IRL browsing. Which drove major growth, but the downside now is that with actual shopping malls opening back up, the utility of Pinterest is going to be lessened, at least to some degree.

As Pinterest explains:

“As lockdowns eased, people have embraced life outside their homes, a trend that caused a dramatic decline of our year-over-year growth rate of monthly active users (MAUs) in Q2 and Q3, as consumer preferences shifted away from our core at-home use cases.”

This will be the main storyline of the platform’s Q2 report, but there is reason for optimism in other elements, and there is also an argument to be made that Pinterest should not be measured on usage growth in the same way that other social networks are, as it’s not as reliant on the same for its business growth.

That’s somewhat reflected in Pinterest’s Average Revenue Per User numbers, which increased once again in Q3:

Its international ARPU growth is still very minor, but Pinterest is still in the process of rolling out its shopping tools in more regions, while its US APRU continues to steadily increase.

Again, the argument here is that Pinterest has more opportunity make money from shopping activity, as opposed to relying on broader exposure to ads, because the focus is on incentivizing direct action with each Pin, instead of reaching the widest possible audience.

Pinterest does, of course, still generate its revenue from ad exposure, but the focus of the app is different, which could lessen the impact of slower growth, if Pinterest can maximize the users that it does have.

“Shopping engagement remains robust, with the number of Pinners engaging with shopping surfaces up more than 20% quarter over quarter and up 60% year over year.”

Pinterest is still developing this, but if it starts to take fees on purchases, for example, and if it can drive better sales results for certain verticals, it still has major potential for revenue growth, even with lower comparative usage rates.

In terms of revenue, its Q3 intake was up 43% year over year to $633 million.

Pinterest says that it saw increased demand from large retail advertisers, while overall product searches were up over 100% year-over-year. Searches on the Shop tab by Gen Z Pinners have also increased over 200% YoY.

The main impact, however, was in the CPG sector, which Pinterest says saw a slowdown due to “supply-chain disruptions, inventory and labor shortages, and rising commodity prices”.

Still, its revenue growth rate remains steady - though the concern will be that, if it continues to lose users, advertiser interest will also wane, which may force it to look to other revenue growth measures.

Pinterest has announced a range of new options in recent months, including its advancing AR Try On options, ‘Takes’ for Idea Pins, providing a more interactive element, and its Watch feed, a full-screen, scrolling, vertical stream of Pin content.

Drawing inspiration from the latest consumption trends (aka TikTok), Pinterest is specifically looking to align with the rising interest in video consumption, which also includes live-stream shopping, another element that’s it’s now experimenting with.

That hasn’t been a significant test as yet, but the continued evolution of the platform as a key product discovery and shopping utility is impressive, with Pinterest seeking to capitalize on COVID-lead boost in online commerce as a means to maximize its potential.

Indeed, Pinterest specifically notes the potential of Idea Pins in its update:

“We believe our new video-first native content format, Idea Pins, can drive deeper and more frequent engagement on the platform over the long term. Creator-driven content has proven to be an engine for engagement on other platforms, but Idea Pins offer differentiated value to both Creators and Pinners because they are designed to inspire action rather than simply to entertain.”

Again, its dedicated focus on shopping, as opposed to social engagement, will ideally provide more opportunities for Pinterest to maximize the users that it does have, so even if it has fewer, it could still drive stronger response for advertisers and business partners through its more refined focus.

And that could well end up being a much more valuable approach than some other social apps – while it is also worth noting that despite the more recent declines in its usage numbers, Pinterest’s overall user count has seen a big jump over the past year, and all businesses are operating in an unfamiliar environment, so how indicative jumps and shifts of this type are is difficult to fully project.

In this respect, you may be better off comparing Pinterest’s Q3 2021 numbers to Q3 2019 as a more indicative measure:

That’s not to say that we should let Pinterest off the hook entirely for its more recent slowdown, as most social apps have seen increased use, with lockdowns and other measures actually driving more internet usage, not less. But I also wouldn’t dismiss the two-year rise here, and the relative stickiness of the platform for the app’s more engaged user base (previous research has shown that up to 90% of weekly Pinners use the platform to make purchase decisions)

Indeed, Pinterest’s generating more direct sales for more businesses than ever, and at 444 million MAU, it’s hard to ignore that potential.  

And as it continues to bring its shopping tools to more regions, its opportunities continue to grow. It may not be the best result for Pinterest right now, but its ongoing development, innovation and growth may still lead to big opportunities.