• by Laurie Sullivan  @lauriesullivan, October 30, 2023

Advertisers couldn't ask for much more from visual search engine Pinterest. The company on Monday reported that third-quarter revenue rose 11% year-over-year (YoY) to $763 million.

Users are engaging with content on the platform. The company also reported a profit of $6.7 million in the quarter, up from a loss of about $65 million in the year-ago quarter. Monthly active users rose 8% YoY to 482 million, up from 465 million three months earlier.

User engagement is what keeps advertisers coming back.

“We are driving strong revenue performance, robust global MAU growth, and substantial margin expansion," stated Bill Ready, CEO of Pinterest. "As we lean into Pinterest’s unique differentiators as a visual search, discovery, and shopping platform, we’re finding our best product market fit in years."

Ready acknowledged the impact of the crisis in the Middle East in a call with analysts, saying “advertisers do react to major geopolitical moments." He added that some advertisers temporarily paused spending, but that the company has since seen a return of major advertisers.

If the Israel-Hamas war crisis worsens, he expects platforms that support more brand awareness would be more heavily impacted than Pinterest. He added that if the Middle East war intensifies and results in a pause in advertising once again, the company might not be immune to a decline.

The profitable earnings report pushed up the company's stock 13% in extended hours.

Management said it expects Q4 revenue to grow at a rate between 11% and 13% YoY. The guidance implies Q4 revenue of between $974 million and $991 million, as advertisers determine where they will spend holiday budgets.

Partnerships are also driving revenue. In August, Pinterest signed a multiyear ad partnership with Amazon to bring more brands and relevant products to its platform. The deal makes Pinterest the ecommerce giant’s first partner on third-party ads.

Focused on user engagement with shoppable content on Pinterest, the partnership -- which took Pinterest in a new direction -- is expected to bring more brands and relevant products to the platform, improve the buying experience for consumers, and offer advertisers strong performance.