Pinterest, Inc. (PINS) saw its stock price surge 14.86% in a remarkable 24-hour rally on Thursday, as the social media platform reported better-than-expected first-quarter results and provided an optimistic outlook for the second quarter. The company's strong performance, driven by its growing user base and innovative AI-powered advertising tools, has instilled confidence in investors amid an evolving digital advertising landscape.

In its Q1 2025 earnings report, Pinterest announced revenue of $855 million, surpassing analysts' expectations of $846.6 million and marking a 16% year-over-year increase. The company's global monthly active users (MAUs) grew by 10% to reach 570 million, exceeding the projected 564 million. This user growth, particularly among Gen Z users who now comprise over 40% of Pinterest's user base, has made the platform increasingly attractive to advertisers.

Looking ahead, Pinterest forecast second-quarter revenue between $960 million and $980 million, above the average analyst estimate of $966.3 million. CEO Bill Ready attributed the strong performance to the company's emphasis on direct response ads and its resilient strategy in the face of evolving macroeconomic conditions. Ready also highlighted the role of AI advancements in helping users make more intentional shopping decisions, stating, "Our AI advancements are helping users take action and make more intentional shopping decisions."

The company's focus on AI-driven advertising tools, such as its "Performance+" automation suite, has been particularly well-received by advertisers. Pinterest reported that 80% of the campaigns on Performance+ outperform traditional campaigns, signaling strong adoption and effectiveness of these new technologies. This success in AI implementation, combined with Pinterest's unique position in visual discovery and commercial intent, has allowed the company to tap into larger, more durable performance advertising budgets.

While Pinterest's Q1 adjusted earnings per share of $0.23 fell short of the $0.26 estimate, investors seemed more focused on the company's revenue growth, user acquisition, and future outlook. The strong results and positive forecast, despite ongoing macroeconomic uncertainties affecting the digital advertising industry, demonstrate Pinterest's resilience and growing importance in the social media advertising market.