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Snap And Pinterest Are Soaring In Front Of Facebook's Nose

Snap Inc (NYSE: SNAP) and Pinterest Inc (NYSE: PINS) had a very successful year. Records were beaten during the pandemic-embodied 2020, with a solid perspective ahead for the upcoming period.

· 02/05/2021 10:52

Snap Inc (NYSE:SNAP) and Pinterest Inc (NYSE:PINS) had a very successful year. Records were beaten during the pandemic-embodied 2020, with a solid perspective ahead for the upcoming period. Unlike Facebook, Inc. (NASDAQ:FB), which could potentially feel a damaging impact of Apple Inc's (NASDAQ:AAPL) upcoming privacy changes, both Snap and Pinterest went below the radar, with a strong performance during the fourth quarter of 2020.

Snap's 4Q Figures

Snap fourth-quarter results topped expectations, mostly due to an increase in internet advertising of its flagship application Snapchat and due to an increase in the number of users. Namely, 4Q revenues were $911.3 million, exceeding $856.1 million expected by Bloomberg analysts by 6.45%. The company generated $560.9 million of revenues in 4Q 2019 and therefore achieved a 62% increase. Adjusted earnings per share for the fourth quarter amounted to 9 cents vs. 7 cents expected, while the company earned 3 cents per share year-over-year. Furthermore, fourth-quarter revenue growth was 62%, which presented the fastest growth rate since the company went public in 2017. It is clear that advertisers started spending more money on ads, after lying low in 2Q 2020 in a COVID-ravaged economy. For the first time, the company has achieved its first full-year profit on an adjusted EBITDA basis. Observing the number of daily active users, Snap made a 22% increase to 265 million, also topping estimates. Furthermore, Snap's average revenue per user jumped strongly 33% to $3.44.

Still, it's not so shiny after all as Snap expects first-quarter adjusted EBITDA loss between $50 million and $70 million, while analysts expected a forecast of $17.5 million profit. On the other end, the company expects revenues between $720 million and $740 million, which is above the expected $705 million.

Despite the growing advertiser base, the key point in the following period will be maintaining the momentum once the pandemic restrictions are put to ease and users get to go out of their houses and away from their devices. Snap shares rose 208% over the past 12 months, and 17% year-to-date.

Pinterest 4Q Figures

Pinterest has beaten both top and bottom-line estimates on Thursday when it announced its 4Q results. As a result, its stock rose 10% in after-hours trading. Transformed into key figures, Pinterest reached $706 million in revenues, which is 9% higher than expected. The number of monthly active users jumped to 459 million vs. 449.4 million expected. Earnings per share surged to 43 cents, while 32 cents were projected, presenting a 34% upside. The average revenue per user amounted to $1.57, topping expectations by 9%. Overall, 4Q figures reflect a strong quarter with huge perspectives for growth. Namely, Pinterest's international revenues surged almost 100% in 4Q 2020 compared to 2019, and the vision board platform is just getting started. The average revenue per user in the US in 3Q was $3.85, while the international average revenues per user were just 21 cents. Therefore, revenue-generating potential is enormous.

Pandemic Is Not The Enemy As Far As Social Media Is Concerned

To summarize, although almost all industries will remember 2020 as the worst in the 21st century, Big Tech and social media giants achieved unprecedented records by becoming essential in a pandemic-shaped reality. Despite Facebook's failed attempts to crush these two companies, their robust 4Q performance has positioned them well to continue their winning streak, especially as they are parent-friendly and controversy-free, unlike the social media gorilla which has quite a few battles to fight on those fronts.

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