(Reuters] -Pinterest Inc announced its first-ever annual net profit on Thursday. The company’s fourth-quarter results were above Wall Street estimates and reflected a softening of the effects of a shrinking userbase.

After a disappointing Thursday session, tech stocks fell by 20% due to the disappointment of Meta Platforms Inc and its weak user numbers.

Pinterest’s Monthly Active Users (MAUs), also dropped 6%, as the demand-driven pandemic cooled.

However, the company doubled its efforts to improve advertising income. It focuses on increasing video features like Pinterest TV, Idea Pins, as well as boosting influencer marketing, which is a market dominated by YouTube.

Todd Morgenfeld, chief financial officer of Pinterest, stated that the company is investing in creator-led and native video content because it believes these will increase engagement and generate revenue.

He stated, “The early data makes us cautiously optimistic.”

Pinterest reported a 22% increase in its revenue for the December 31st quarter to $846.7million, exceeding analysts’ expectations of $827 million according to Refinitiv data.

Snap Inc The (NYSE) posted solid results Thursday due to its advertising business recovering from the Apple Inc (NASDAQ) privacy changes quicker than expected.

Pinterest’s traffic declined by 12% in America, the country it is based, due to some changes Google made to its search algorithm.

Morgenfeld stated that “Engagement headwinds resulting from changes in search algorithms and time spent on other platforms are more persistent” and can potentially disrupt seasonal trends.

According to FactSet, Pinterest’s MAUs, a key indicator that measures engagement on the site, was 431,000,000 for the quarter. This is lower than the estimated 447.95 Million.

The net income reached $175million, as compared to $207.8 million one year ago.

It earned 49c per share, excluding items. This is also more than the estimate of 45c.