Pinterest (PINS) 1 Aug 232023 Q2 Earnings call transcript

Good afternoon, and thank you for attending the Pinterest Second Quarter 2023 Earnings Conference Call. My name is Elisa, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. [Operator Instructions]

I would now like to pass the conference over to your host, Neil Doshi, Head of Investor Relations.

proceed. may You

Pinterest. thank earnings and XX, joining Welcome Relations us. I'm Good for you the Pinterest's for Investor of call Doshi, June second to Neil afternoon, Head for quarter XXXX. ended

CEO; Joining me today Donnelly, the call CFO. and Ready, are our Julia Bill on Pinterest's

Now the harbor. cover I'll safe

to of we cause today considered statements such forward-looking, our the materially. risks uncertainties operations could performance, differ number that and of results Some make and statements actual and involve that regarding outlook, be a may

In and indication for are performance. addition, and XXXX QX outlook our results, are trends and beyond of preliminary an not future

We are to these statements duty required update today of available based on unless making us as to any forward-looking we them disclaim law. and later information by

refer most the in filed please discussed our available XX-K or to recent XX-Q the Relations factors our SEC with and Investor on risk For more Forms website. information,

During is Investor press this A and present located non-GAAP measures. will are our which the of to available investor.pinterestinc.com. GAAP at in website financial non-GAAP distributed to included public both and call, and presentation, we through GAAP Relations today's measures reconciliation release earnings

specified. today's all unless rates year-over-year should otherwise Lastly, be growth considered remarks prepared in discussed

And call to now over I'll Bill. turn the

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I'll now provide financial over our performance. turn an on QX to the to Julie update call

you, good I'm thrilled Thank join to Bill, everyone. and Pinterest team. afternoon, the

busy joined been As you June. since can few late in I imagine, it's a and exciting weeks

ahead. to of even few like I'm the opportunity more I discuss about I'd First, the excited and came reasons why why Pinterest a to

become a strong positive brand I've watched joining, Before performant and also with app extensively From as consumer and Pinterest I beloved platform. model. Pinterest inspiring followed role, incredibly an and advertising innovative previous financial a my an

from but Coming uniquely how they journey in where Pinterest who not to I've e-commerce and to experience bring advertiser, users they're an the midst that able to what find of best-in-class looking and take what would quite I want marketers a action consider buy first-hand had to help then are ultimately inspiration is life. sure

honored this the our inside for investments. forward the the few I everything navigate company, team attest and strong revenue look excitement ahead significant at from I'm we CFO and role capturing join Leveraging Pinterest background on momentum. operating I users to sound last execution to the my the e-commerce, the continue us potential energy helping and sitting can through building to our take building Over weeks, teams next and growth, to exciting on on this of through in are advertisers. management chapter

in Looking more Investor a Day develop and ahead, sharing with our future September. dialogue shareholder potential I'm excited ahead as to well the community about productive to date and as progress at analyst

the turning and our QX metrics, revenue my terms outlook quarter. today, financial for on provide specified, remarks a basis our will second and in financial discussed for to unless QX. be comparisons discussed non-GAAP noted. year-over-year Now In All otherwise all performance our unless I'll results be discuss otherwise will preliminary except in

users, active Bill global in strong seen platform investments and last We growth last basis our highest grew resulting on in during year-over-year globally, the over XX active XXX million X% user engagement over the of months. QX, an X monthly new As on users AI we've in the a monthly million drove mentioned, users experiences XX years. our increase

growth X%. excited of monthly Underlying XX And users. core X%. active by as of and monthly and and monthly Europe, fastest-growing were verticals. In doing markets, U.S. is users user about was sessions, our had million, Z And active in XX%. engagement demographic with which testament in [ph] XXX World our deepening users monthly marketers a important we up Rest we're the XXX our we're for faster users, up metric, users measured In active and million, were SAFE segment our many million, impressions to the making were up which with Canada, engagement progress the work active our I'm Gen and an influential around even

basis. Turning both basis. and or at currency a came million, constant of X% Global quarter $XXX $XXX currency second financial revenue to a XX% revenue U.S. the in and $XXX our for increase was X% performance. on growing growing constant an revenue on X%. Europe Canada million, reported million, was

testament from $XX currency Revenue 'XX 'XX. was quarter pleased A XX% QX strengthen that this and on of turn continue market attractive a deliver. to because see to global ads year-over-year on continued Pinterest million, ad basis. World versus somewhat strong choppy, we spend return the relative or advertisers growth growing Rest revenue demographics, to user brand-safe turn highly remains and to We're QX XX% our constant the environment can while to of

the of to as advertisers, saw goals gains advertisers, During the engagement growth we ads quarter, the Contributing attractive were our their premier strength awareness and video were this Spotlight unit. ad pricing. able takeover brand CPG meet at many funnel, and particularly to and given our top new objectives

leaned more bottom funnel of by the advertisers conversion into and our API. format came our who adoption quarter, deep-linking of strength from ads shopping driven mobile larger, the At this sophisticated

adopt our However, from we measurement pockets of who retail yet those also experienced headwinds tools have to distressed advertisers. and

to of advertiser us and parts of areas travel, all strength. we advertisers gain funnel, traction our traditional financial diversify good as of further emerging in services, such across autos helping our continue outside with the Finally, verticals base

optimization, up opening a terms across second geographies. primarily In supply by of XX% due all than ads quarter, more page in the engagement auction the price grew supply driven overall to to ad pricing environment and dynamics and softer declined of whole gains XX%,

efficiency was in down cost gains how leverage line million, X% P&L. of revenue these of a revenue our business. $XXX versus projects in revenue It see storage quarter compute realize even as and we of of This cost QX. we row been Cost across down number ad throughout item can of year-over-year up our AI X% innovation drive has Moving declines to our the and a the exciting quarter-over-quarter is and our and stack efficiencies in engagement while sequential implemented teams third infrastructure. significant

below more versus sequentially while our up our our QX Overall, X% operating were up shifting G&A in able particularly efficiencies, from cost year-over-year expense drive we was R&D was and million, of into to non-GAAP $XXX guidance X% This QX. as and some also our QX. marketing functions spend

EBITDA points a expense basis a very in operating had our margin, revenue, at Adjusted coming strong discipline. or year-over-year, increased $XXX of XX% quarter, in driven revenue by XXX and up million efficiency cost

our This successfully purchases XX-month during program, openings to opportunistic be million our repurchase complete of quarter. as plan stock completed quarter, the we the well with ahead program saw $XXX we the to

to our topic details time. We be forward managing continue to sharing at our we mindful Day, - a more will allocation upcoming look dilution. be that Capital of of Investor at and

ended cash, in $X.X cash securities. billion equivalents and marketable Finally, the we with approximately quarter

I'd to for like third Now provide preliminary quarter. financial guidance the

digital weakness. remains of the pockets uneven strength ads the and While stabilizing, overall recovery be to appears market with

what foreign single-digits impact the exchange, saw expect from now, we our the to in expect We growth which rate is moderate a land which grow from would represent revenue This Based of a QX includes seeing range, range are that reflected high to small guide. middle we QX. acceleration we right in the in towards on year-over-year.

to expenses. Turning

operating of range operating single not Please guidance that grow cost note digits expense does our include non-GAAP the year-over-year. QX revenue. to expect in low We expenses

basis adjusted couple of we expanding the world. in margins in we hundred As EBITDA of state the year-over-year noted on year previously, committed points to of any full have order a XXXX are

the to points believe acceleration expansion sight investing XXX on we've revenue the outlook double roughly the of margin on year-over-year EBITDA us made full QX expense while deliver the sizable provided ensure monetization we to we expect to commitment, in prior capture clear engagement year with in adjusted EBITDA areas basis of puts line are cost We the for feel the adjusted XXXX. strong resulting returns progress potential Based maintaining path above, and in that we good we revenue discipline also about see to users, to ahead. and on

few the With words. final that, Bill over a to I'll turn now call for

teams I'm to Pinterest execution Thanks, I'm Julia. deliver find more to team's users advertising great to our and appropriate to the we're to advertisers. strong value in that come experiences and partners investments that making people inspiration. confident for I for our Pinterest, of at proud our And the all provide want results our QX. thank

the can call up And questions. with we for that, open

for We line will now the questions. open

The first question comes Sachs. of Eric the from line Goldman with Sheridan

is now line open. Your

Bill, taking you. Thank the two, I you first could. so for question. if much Maybe for

of a of talk reacceleration platform think lot about You how much your and lot control talked building when elements little the about volatility business that about you things based on talk are broader business, inside your there's your of Can to advertising of a revenue of about product are or bit that control. the and executing environment environment iteration versus the a environment. on are down also and elements you're you macro in that out current somewhat ad elements building are sort the within

to prepared forward. as little your deeper and on I new wanted so just look CFO? comments the role. to one, role bit as remarks to And in items tackle going Julia your the working forward agenda delve second Thanks want opportunities big first, the I what during you some much. then in back of this with to you the congrats or a you see that come

question, Thanks for the Eric.

and some signs that we choppiness example what Direct for consistent if look softness So is out lot ad with of had be on impact, us. pricing and that's sort would down puts some broader year-on-year That's and takes still in environment. there's stabilization plus recovery, control sort year were plus. you other the of some first question, double lot which of a you see evidence digit percentage but have of across at last broader or what's platforms, what XX% and of again of which is large year-on-year of can direct environment sort point year-on-year to declines a The a year, declines they of this the seeing pretty market, there. XX and in your of

just So softness the element market. this strong pricing like you of have in the broader is which pretty headwind,

And so some is evidenced while headwind choppiness there recovery, stabilization major pockets and platforms material that of pricing. signs of as both with by that in in pretty on other us still there's

if the talked look than platform, the a platform. X-plus years take the commerciality high question user relevant But that we can on what largest do of feel has it commercial the ads engagement that of our And your user be at load been about to we can you our up - most ad our on the what things we deepening given to what context about content. really higher return in can users much how, We've we in fantastic in quarter we're growth control, control making. that there, just noteworthy, growth, progress put

so can take driving we see evidence and And you results. our ad higher in even that engagement, while deeper load

mode. unique to the more tend do in really take entertainment an social away trying world able they're ad in sort of to because And the do ads from to a media, that. of what they're thing to particularly where That's user be

up big that ad part in driven by lift in ad dynamic load by - we XX%-plus of XX% driven out is but because intent user page load able increasing take growth as or through of relevant content. that that user are the meaning part forward ad Here, lean we've mode, engagement impressions, we're up been optimization demonstrating load and a to while drive we our proving our a those ads in have work whole engagement,

with that, So spend adoption adopted tend those measurement grow as more much platform. of and more our adopted later of of order on quarter coupled the the the advertiser mid-single-digit shared some past have side where faster rest measurement than that they that adopt growers not getting prior quarter tools, tools, XX% tools that our those yet latest this of to decline. they're in to the have our in tend Those measurement they as I be year-on-year. think this, continuously this remarks our on I've our

So around us. we're headwind that adoption for flip tailwind driving to that as will increasingly curve,

in confidence things back so think at ad are market, all that through the grown And platforms and every those consistently it, give from you in our acceleration in only of quarter step why are step ad broader you versus that I And the of if the back quarter-on-quarter. we're where way it's if control we're us one look that again, you lots and us seeing we're ad has the the why market. major downturn going.

on then positive say only And shop, be more a platform. final shopping just not our the on while wood the think downturn, than one headwind the could the growers that point-plus would just one on you year there, send really point, more half XX we're to consistent the We questions the here And moderate, the that the I on that to year acceleration platform. through And I'd work results when look was platform. the the of big had is progress ago, and at pricing work research fact the encouraging. think I of to user speaks shopping

last year-on-year XX%-plus And about that's main improvement quarter. content talked We XX% engagement shoppable brought in from quarter-on-quarter to our with accelerating as on content shoppable we surfaces.

sort we as platform that pricing gives while the And commerciality when tremendous predict can market Julia for a headwinds just question. XX-point an do your what us think, and in we indicator headwind. the a the to we've of ad been So even able optimism. into broader again, for I second advertisers, plus of And can't of back or really I'll turn tailwind, growth give with alleviate to solid our deliver it

the Thanks, it. Eric, question. I appreciate for

from here start taking been weeks just seat, And Pinterest. observations. a and So of me heard obviously I my couple first, few pace prior that place. let me of about lot a was for an exciting innovation with exciting It's Pinterest at the

first from I momentum advertisers it's here, Now about had advertisers agencies that just the and inside, back got many recognizing gotten products to really buzz see talking ad great other the on They were When from that same. the building. all can. and we're are teams I'm the about the

mentioned ad number described the formats really actually the of released this earlier, and we've year pace ad we as year, stack earlier. meaningfully tripled we As versus we're so of last far innovation accelerating

see. So by broader the really is to starting which advertiser recognized community, that's to get great

The here, have we second early engineering functions. just company that just here observation inside particularly AI I'd level been of product have how impressed the I've in and in the is talent our

that magnet world-class - really on has been a that We Pinterest front. have AI have teams talent

So I'm every platform learn how our in aspect impressed see to is actually AI embedded and today. of virtually

as think about that go returns I'm to to and with also on the leverage here, over operating sort year. and growth I that's line time. those sure to of revenue obviously, part where big the say momentum. we've progress agenda of taken about last join items chose this And already that I company you why direction the a areas has opportunity from team excited I'd help to some we're made investments But real where is clear so and of we a very driving but capture make my with doing investing in to where - sight profitably drive the really that and continuing looking look over team to forward that we're partnering in build

from you. next Thank Sandler the line question comes with Ross of The Barclays.

open. now is line Your

guys. Hey,

app. showing in even on. pretty you able you nicely And see from these ads been load that the we're up guys to increase SKU-level before just to starting these nice mentioned have really So turning that Amazon

there to guess, about I one? how from just interest So about pricing sold you then the think perspective to ad you a compare ceiling Amazon directly new like the if ad And these - load, how can is load ads? talk

on next the just second you non-endemic are viewing? in the financial just a of guys is are services, terms how potential those know opportunity then travel, of question couple new the categories categories, the Thanks lot. I in years? viewing early, auto, And how but you it's

Thanks, Ross.

growth us been XX%-plus relevant break said the allow Ads growth That's on which for on content the more point specifically, loads ad take by the driven shoppable Amazon the We higher. before, is believe onto we supply, much really meaningfully overall. in users. your on So than can talked about that platform monetizable faster our commerciality but don't platform out as really to ad bringing load our we've I've engagement partnership,

they shoppable we're that bring buying plus that experience for So more content of a great users. partner, encouraged Amazon as a quite can

the of beyond we're implementation very explained with And reminder those hitting the it's about that we're And in we're to that on start improvement seeing a biggest relevancy of revenue results one about bit happy even really and expect those I optimistic pleased our of element and is so things results, implementation. a the 'XX, side. early pace we're early while if in we're that what multi-quarter again, on happy early we that so a biggest expectations already

that load context and in as see a ad our be relevant that as Adlocan that when here further experiences. higher. so load if shopping to the provided and on see today sort I've relevancy, life is users are of more it's are that than we you commercial of slots analogs much we right in past multiple of ad to add And the [ph] -- more shop. users load view take contributing have for particularly sort other And half what shopping other all users ad bolsters our or compared count it we you content you seen that can could to

ad ahead, So we with still is where I quite that go more load. think that ceiling says a for high a there lot runway can

engagement growing we've driving been case for that terms content of out relevant that also at engagement And it also the the fact proving XX% users. monetizable of making grow year-on-year while we can our increasing in overall that ad theory load while already is supply, plus

really about we feel all that. So good

second action, the of we've platform that, actionability been we And categories, resonating about new would historically seeing as question then great we're your weaker we're across that being non- ability that But categories, previously in to to people intent, on inspiration talked sort more knew across bringing Pinterestinc categories across is how full go funnel we action. it's intent platform to was a uniqueness more and part of of that the to satisfaction go Pinterestinc, those verticals. where from from of seeing a

the Travel quite People satisfaction like we create men's is fashion, other few ad And we're intent, doing overall. about travel that my mentioned large we're to prepared remarks, travel, in noteworthy auto, is travel more most probably that seeing is applying categories. so market a mentioned, I as dreamed that well always across Pinterestinc. a have on

a lower shopping, travel opened user base results that But applied engageable seeing users ads availability good more a travel and that again, like effort like catalog clickable now with advertisers. driving as and have is we've in technology we those of pricing travel that, action the of made and really actionability to with we're our to things intent and information as by up shopping, was work lot taken the with

So on that other go have we that's Pinterest. still while shopping, quite in tremendous meaningful and there I verticals runway think to are encouraging categories

excited so And that. about we're quite

users organic I what Finally, say side of of to we're cases. some helping mentioned just into I doing the that, would nudge around on other use

the think we're one leveraging could more is that some nudge users historically at of now them. AI product been is categories and working times we've Pinterest I our other for is seen to relevant users, some of towards for experiences our some we've of capabilities And really finding and this that well. episodic things be

lot runway a to there's think we So there. more go

Great.

question. Next

question UBS. from Walmsley The of line comes Lloyd next with the

Your line is now open,

on if Okay, the can. monetization side, for thanks. A couple me partner I

would get scratch? you think as What guys Amazon big like And expected. the need need like through potentially than from are scale faster foundational platform efforts? those Or progressing redone to get things outstanding sounds that you partners, you to blocks is other that? is more it to partnership this First, about adding are

could you [ph] less? will and partnership their announced between and the have guys of where one, second kind contribution in toggle with Thanks. third then you grow how you other sorts that parties, those helping how Alf And to a and go-to-market of markets ultimately meaningful sales you force

the Thanks question, for Lloyd.

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lift the as term only I better ceiling than where to at we think you is the look again And long there. pacing had the expected. continues

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could [ph] and we're with LF about what doing meaningful that be. how You asked

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line the from of Mahaney comes with question next The Evercore. Mark

now line open. Your is

in you to an advertiser the you the I these want still maybe application in ask two about action, you would of of Okay. Or the Pinterest do you cost and much results see? of more better knowns. models, of to the early the for lift the what things: I cost Thanks. much and impact How long-term assume you. per per of terms language about CTRs, in seen user LLM unknown kind think reduced stage you've side? kind that Could could both improvement of are see action large on could kind impact talk the models is

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questions. Mark. Thanks, the Appreciate

are So we're models, are doing far two things benefit, what simultaneously are with pretty there. on O tremendous is ne we seeing LLM true. we along and

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but there, early we're on so the impacts profound. were And

vision of that been a places the feel and and know AI we much got happening one are Pinterest, computer about to that long AI as a computer at for runway forefront a we're in there. of So time, is vision of has we with been sort team we've for drafting really things. absolutely how we're like sort core Pinterest the advancements that's it has those more a in quite of been of It's acceleration deep in in innovation But talented strength strength that excited on generally. enough left

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the XX% on on your update think XX%. question gave measurement adopted the tools had second of that quarter We of advertisers that range around quarter. into I growing XX% deep pretty the last

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seen realized adopting that as is, Pinterest The that tools I've getting I is seeing what that say the then were between and than thing from has present will watching not they adoption linkage really one the continued is had as The along to for we increasing better we've linkage adoption continue measurement along we spend. stronger. becoming do nice thing continued we've see that curve, performance and remained biggest And much adoption. only been they linkage, continue advertisers that that curve, that

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with Thank The next question you. of Partners. comes line Rich from the LightShed Greenfield

is now line Your open.

fear in of this Bill, And the spoke guess you computer And there's the recommendations just struggle would you know to terms and you with ad talking were we think as X will about of and among sort Google. you a the I from get little bot a vision. AI I given got the AI sort the But what tech, that Pinterest of years? about love how about on then AI targeting. given quick next [ph] look how especially content to follow-up at growing is, Google, a background over the targeting, sort not demographics? juggernaut out sense at investors importance named in compete compete be of your Apple guess, And as everyone talking history you of - to Meda I of I were just and in

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Rich. you, Thank Great. Okay.

AI, your benefits a first on question largest. the question on only think the to So there's accrue of do I

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Shopping about you asked that , specifically.

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the Absolutely. question of The line comes JPMorgan. Doug with last from Anmuth

line now open. Your is

on Thanks you are keeping along want [ph] for doing to you taking know adoption questions. I And guess curve? Tapi just advertisers what's proactively move to the understand the here? touched from Bill, them I adopting I what

MAU on collection Thanks. curious the overall XQ you just decline in thoughts in Europe I was And any then outlook? secondly, XQ. any if part And the MAU have don't comments that about. know the on if of you've birthday dynamic that talked

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conversion our to So API important hit. is

on API, recently there. less a only market Our been we've out conversion that than put It's year. the

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overall. So we it feel about really good

But its advertiser. be the for us want is impact the to we of given consequential and course, so faster, magnitude of

of hey, along faster. are spirit adoption like, we mindful We the of move your the think very do question curve that. of much I how

about. few that things we're a So thinking

really compelling about getting points, that own have them. impactful really The helping is having are we is tight engaging. reference for our large sophisticated introduced been our advertisers drive better our points first-party That product, those first - talked really The I how sales go-to-market recently are terms in about that of go-to-market better really efforts with team been speaking and being proof us it's that's there. a more with we've how

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adoption advertisers an curve so through are on this. moving And

recent integrated. So where then ad are we're and to platform, our already making them partnership Tag partners. Manager we're Google LiveRamp third-party some of We've sure that those with mentioned working all certainly, Amazon's like with and advertisers of platforms or Tealium these examples integrating the are

they consistently expected we're So they better that increasing and which to going the sort thing from meeting of as us measurement saying the two-fronted multipronged of working accelerating well well they're with where of seeing than advancing with sort things that. approach we're most advertiser spend are. and is approach the better are their these quite of really And get again, Those how those is better our as advertisers nicely solutions, own encouraging adopt go-to-market, as and us. performance that

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Bill QX. really then, globally. of on seen Europe and just the growth now we in about that as active noted, specifically for say, your second user user trends, active look globally monthly kind Doug, great lumpily I'd And about question feel we've and

at in So year-over-year. a and globally X-year and world high look high, as near-tear in you we're at the in Europe U.S. both if well, rest of and

MAUs. Comps on

XX-day earnings month So we I is out There and prior there. good the called really the look in on This we're is feeling during think active back of June. seasonality some on monthly business call. users as a our QX is

seasonal QX. in reverts you typically that so QX weakness And then do a see more little bit and back in

ended here. noted So prior feel to we And and the strong. to it's collection not metrics year-over-year on continuing quite basis, call that important something a was focus being looking Birthday on that material. on really nonfactor we're up

increases we're investing to seeing very spend return So general, don't QX able that our feel I good And really about would for we trends and year-over-year in. growth maintain all being But user good guide feeling in engagements the the on and marketing on overall, expect we we're those MAUs, forward. about on that going MAUs the that all specifically.

All your keeping Thank right. the of you to and the look forward the all joining questions. call again of all enjoy and to We dialogue your going, hope for you. Thanks day. you rest for

That concludes participation. today's for your call. Thank you

lines. disconnect You your may + now