Pinterest (PINS) 30 Jul 242024 Q2 Earnings call transcript

Hello, everyone. Thank you for attending today's Pinterest Second Quarter 2024 Earnings Call. My name is Sierra, and I will be your moderator for today. [Operator Instructions] I would now like to pass the conference over to our host, Andrew Somberg, Vice President of Investor Relations and Treasury. Please proceed.

you us. thank and afternoon, for joining Good Welcome ended June earnings call second quarter for the XX, to Pinterest XXXX. My name Relations Pinterest. Investor Vice President is Andrew Somberg and and Treasury I'm of for

earnings and are is our call webcast, Investor release. refer investor.pinterestinc.com to and press providing at Ready, call accompany This also being today's to are Relations presentation slide on our CFO. website me Pinterest's Joining webcast find to CEO; a Julia we our Donnelly, conference Please and Bill today's presentation commentary.

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

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

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

uncertainties factors the SEC recent on risks, Form with Form filed about most information Investor Relations XX-K our and XX-Q our affect more that our and please to other For or refer results, website. could available

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

be remarks the Lastly, year-over-year all call growth Bill. should otherwise considered to specified. And rates prepared today's I'll over in unless now turn discussed

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afternoon, good financial third an outlook. year-over-year all our provide otherwise basis XXXX unless and Today, results will and discussed XXXX quarter quarter for All preliminary I'll second metrics, revenue be Bill, update comparisons everyone. non-GAAP and otherwise terms except a on financial specified, be our Thanks, discussed unless noted. discussing will on in be

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net of $X.X the $XXX an quarter cash with ended we settlement marketable million of plus In million share equity of equivalents awards, share on $XX additional billion. we approximately Finally, cash on repurchases. QX, securities and utilized cash,

the quarter. for guidance third Now our discuss preliminary I'll

million, XXXX XX% to expect revenue XX% of the to in year-over-year. growth be $XXX $XXX to QX representing million We range

additional share some as look to me context we QX. forward Let

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now expense our guidance. Turning to

operating QX million to XX% growing $XXX expenses year-over-year. of non-GAAP XX% expect $XXX We to million,

not cost guidance operating of Our expense revenue. does include

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our continued ability the and Our of momentum confidence business gains plans. are to in evidence underpin our our deliver our in on

I'll Now words. to for some hand final Bill over it

that teams and can people inspiration want the Thanks, call I to all for open questions. to to at the we that, the shop. And Pinterest partners Julia. in with Pinterest, our up advertising come thank find our

today question Barclays. Our Sandler Ross comes with from first [Operator Instructions]

with the starting maybe Just macro.

the some the quarter for XQ, growth but long-term obviously at XX% teens deceleration the range. reflects So from third midpoint it's high within your

tougher deceleration? would Could the revenue ad you few or deceleration help of the increases mentioned factors that you that factors then just you out flesh increases offset partner just a So Julia, driving for how factors. much might versus you up load how comps much the are us mentioned? And chalk to

Ross. Thanks, Great.

good the feel we business. So levers to our drive about

are Our to trending we've doing initiatives we for in exactly outlined consistent what with what we intended products market at The put Day. them are do. Investor

have products that off from guidance continuation headwind and our third-party us switch QX, QX, again. And drive a QX the and into to noted lower revenue X-point we capture value a growing factors for helped funnel QX, remarks we prepared the of QX demand including is that Looking of at to growth expect base now in rates. many FX the spot to in current

for highlighted the range, prior unique without FX our seasonal the accounting we and when so the with day. year, QX QX Easter XX% And factors effectively impact this in particularly guidance leap earnings for and would of been growth the consistent some higher to that headwind. call, XX% shift drove FX higher including is have roughly that on X-point that timing QX And QX we the this excluding benefited

underlying at a accept then business that rate holding beverage. softness did ads. and you see look last effectively do stack of start political to basis, the comps our the year as difficult more as you'll we some noting the persist the on in lastly, in worth further you fact not it fact it's is despite experiencing So we're that that QX, that X-year well. And strength And if remember of it, growth may become food stable and

other account a as platforms you for well. that's difference to to us So compare as

Baird. comes Colin next Our today with question Sebastian from

months summer organic growth you mix curious well, engagement you the the additional engagement? was as try the that, of appreciate the much trends from ad I content. see content you've how the over And also well as in I you I just efforts seasonality relevancy all and any call. related of improve are in hoping from both made seeing dig little amount to here user all to the to given balance on bit would personalized as a more as detail of to ads? load And impact just on the increase be

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users. amounts bring record WAU see really MAU [ our the you as new steady ] placing, in in ratio in So clearly in even is improvement to we XXXX, that of

covers some the at this to little question dynamics and the of play. back pull a get that you on will bit if more different on your So

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Yes.

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that and behavior across engagement believe more looking able we the full And overall are align conversion becoming quickly. mentioned, we Bill platform, advertisers, and for evolution clicks signals more clicks they're the as this is of with part we're of shift providing to we're are abuse and So a since strong, meaningful the a healthy user what it's funnel remain as on outbound basis. kind sell this also exciting better also seeing value users find ads of

Eric today Sachs. from Sheridan question Our with next Goldman comes

Cannes terms two you're if Is about away about finding end part you're Ross' in digital to macro with environment. Can shifting a that gave to ecosystem? in be there. the would shift broader specially two, geography seeing deeper in demand seeing little before up I terms from advertising the Pinterest respect on you're that one. And question ads, a your is with following to of little demand by of intra-quarter digital terms Go with parter detail or respect you of going seeing there of a Maybe what could, [indiscernible] talk bit end changing any bit the competitive the environment lot about a advertiser Bill, part positioning differences demand. you

second geography Great. Maybe to I'll first, one for there. on Julia with and then the give the question start

more about we've puts quarter think real relatively around retail drive clicks sort within we're most seen say, number your first third performance to done capture we straight are question seeing a that year-on-year, that we've seeing and talked the advertisers' the that, advertisers sophisticated market, I'd with vertical doubling building on the than we've value quarter. largest, take and ad hold of there. that. The through from been to we directly grouping more take of generally, is are that And now consistent. with the come hold just macro, strength takes that and There versus We're into all We're an some that So next seeing tools stable there. and more last to measurement to advertisers flow due remain seeing their broader competitive seeing funnel lower as the improvements positioning, of advertisers.

consistent advertisers calls, more particularly of more and in and winning those we're actually shared strength on performance we're real we're a more with prior seeing budget, we on always more that we're retail. that what for be larger So with performance. budgets to lower continue seeing those And driving and funnel us as

talk Performance commercial of what before of those across So ad we're to platforms how to that hurdles out of retailers advertisers we've that as more that's go, strength that and platform, We've think things even be seeing those shopping of some of and Plus funnel more place Performance there's adopting automates that going to our that And comes that. purchase. of tier Plus again, bring seeing sophisticated for next we there. And some broader are high to automation, been broad-based been about advertisers creation been for to larger solutions. them more lower been that. so that's of of well our there's have in more it, we that for to we factors, positioned on adoption. And on further think those the We help to we can seeing a uniqueness the good why more come. a think in as we And again, we're think around users much we've to of large, the of performance more things actually face really on swath being the setup see a while, and retail. think lean intent I of we've are that for that had they campaign competing quite have accelerate that able of competing able they known various signals that

really where strength as we verticals So other we're like have well, out I'd we autos, positioned that financial seeing call there. And technology, well services. feel

have some go really you we the Julia, you'd of we than to pressure advertisers can that, and Again, the use that, called exposure many in add in stable those other and part own the on as certain I have sort of the we do anything giving weakness around to results, food been see else relative macro the dynamic some of of cases seeing relatively that's specific takes. they've on I'll pause, categories, overall. competitive and back given in some more industry they're consumers. calling I been question the and beverage more with the and It's stability. Maybe to some think geography? So based. And Or macro? food where her from such puts out facing broader beverage, we've That's But comments, think seen what out as there. their of on that Pinterest, Julia where

Yes.

add don't overall. on commentary there to the else market think I So on ad anything the broader

that to currency of I of their segment, The think were in. our us the a up point that starting kind factor we announced only acceleration the basis, I what XX% Google and ramping our of to expand revenue. the monetized Rest also add QX previously constant as allowing segment market, we see QX. And dollar under the relatively a did on we unmonetized now was other in in that that reminder, small off base might partnerships into a Rest albeit of third-party in to drove was is is primary prior ramp monetize in XX% began World to we're in quarter, acceleration a this countries World nice from

how in reseller we're with monetizing So We to these pleased beginning Resellers launch. to another those regions. that's lever are launched QX. partnerships

early So the well. World to as that's contribute next expect to year but in still Rest of this the we start of to over segment days, modestly the course

with question from Citi. Josey next Ron comes Our

ad clicks maybe here. more direct this again are the this wanted that now Bill, what row ad quarter the the products to out on out, a doubling Julie, a is double-click little with track that's coming And link, I in specifically, bit on third quarter.

with the about about the more love in I received. of love sales process how advertiser hear then Should Plus quarters? And it terms ramp adoption over you here, talked coming online hear just rollout. progress to being your the Bill, also coming just amongst about So Performance would Would and going? to continue is to then well very base

those modules direct out to line lines? Plus similar time Performance perhaps like a out we would before and Or things faster expect coming automation links? should Specifically, Creative roll along different

for the Thanks Yes. question.

most that we've So that that quickly. really get continue to in row measurement direct Plus. the of the They've start them in to Performance remarks And and really with saw only on we dynamics generated clicks for feel we sophisticated very advertisers, quarter the respond very is a driving adopt so. We're tranche quickly to continue why to also and of year-on-year. But and us captured know those next about ongoing the it of easier now this retailers also clicks. your other a for very to second significant terms we're part to my increase ones those value sort yet rest been seeing they're Plus, capture great the those of of creation. And in the sort in advertisers solutions. that's portion link, to from are that the those, of of of the a do value good know conversions we we're and going doubling the business I into third sending broaden that the that mentioned will question really we've from little yes, retailers, We make strength campaign material that bit, the raw tremendous on Performance around to largest, of to able

you do for the in of well I first they what where really they think of to performance multiple to takes and things. How with Performance we're which Plus, kinds platform on campaign do sophisticated they've about it's we've campaign? that it's across that own been of it up Performance advertisers sort how advertisers, to be campaign? optimize How the might and can really the see that measurement we clicks not talked you but and Creative? And optimize those to go the on to do more look the to see getting their you of doing creative and them, to how how sophistication, go also longer platform. a about the lot the over on do audience, them you for that sophisticated Plus need further you Creative that, increased match those the how think, about For and do less their create additive, work just And conversions at when our quarters. It's it have a for -- create of the pick do then the you setup and a optimize

create really that tranche, it the audiences that's a help For set the Creative up We their dramatically easier going becomes easier fact different Creative we that think quick-through think significantly to to spread will dynamically next to optimize even or to further campaign, further. that value rates. that to optimize capture

create think that, seeing quite a before, lot over multi-quarter again, really in XX%-plus of We're a costs of they're rollout. ongoing steady a period. And of on in shared us campaign that, go other in these things, curve campaign tangible hockey next we really, and alpha as again, like on in our the business a of us but as reduction -- as that can really about lower advertisers testing from of for testing of improvement Don't a example just higher required XX% gives help XX% in cost real, it's in Timberland, Now stick, this Pinterest. right? with are case encouraging. And confidence momentum confidence that what a but comments, I pretty like of study the examples build like Seeing a to our the which in that steps setup. I encouraging. things outs my And few multi-quarter XX% adoption in Timberland tier roll CPA, advertisers multi-quarter and XX% that's the in is mentioned saw, think a like CTR, beta the again, lot talked our higher the a I the gives number rollout, that's, multi-quarter that what

we're easier the and you've with more with it business easier making do years. So last consistently, Pinterest. over just it and I that more the X theme to the seen industry for broader just more holds advertisers and us We're from think and more of

of our has in line Investor as view. that to quarters Hopefully, And that talked for what and seen initiatives every so very function forward, think the we those helps. multiyear couple ongoing for much look step last the a as us. business, we at strength we Day And about continues we year a that with bolster you've created consistent

Mahaney Our next question comes with from Mark Evercore.

the about asked partnerships. just XP I

the could September quarter And you think -- past; You than do How is of greater the to in performance the how contribution year do Is for Rest expect how of ramping? a made build can accelerate contribution I three again, like March this to quarter in in you expand this think about the far anything for long X? be absolute need do there you Or the the partnerships. this ramp? in the again, that takes quarter. you've to mentioned guess, June dollars with quarter. the do just Is the in to to the greater than something or know talk World. long in June that any XP Google more the -- you runway said And you I partnerships?

fill in large opportunity beyond in Amazon that enough, very talk to may good the just got partners and be You've two about two? Google, but those now

Yes. question, Thanks for the Mark.

year nicely. that Amazon, and them starting that Google, as we much well. what right? first early after when announced little doing 'XX. XP, If a early that's than you a ramp on We're And back bit relatively we we've in it earlier more roughly we're ramping from step to Amazon in announce we're from days all, seen year still with a as with we're

those commentary, have And shared similar our that expectations in in so going we saw we continue to see off we built baseline the as builds each QX, QX of forward. that we of that

think where So us really as unmonetized. monetizing we were those monetized, with our to were auction opportunity, then those just out and gaps there's things of already build, we a in but in steady into not markets a see lot platform, more where to the more start round XP, completely we brought markets our in continue we and monetizing we in help

that in quarters of progress opportunity for those go, each us build of the we've more made optimizing and be of and the that partnerships. on as that about a feel something that we lot still so see good and years steady with front even And to we as of that we'll still really

that -- other more on continue now. about part of part those for to of give Mark, Well, your other of our sorry, out partnerships the we expanding don't And we question us talking The we're to didn't your question how any I'll one about those maybe final in have I note look going right the We're hit resellers. round partnerships. auction. gaps

So path Google Ads from buy already can an we're international, just that they directly, fact and creating seeing XP not integration. that seeing days is resellers, that are as of the and resellers bringing to but where between seeing about resellers those about the about but be us now where some that they're us we XP with start early the we actually to for to through we XP, start we're We're XP those resellers. an the as advertisers ramp. advertisers of thinking they and resells And easier have how and would them talked with purchase Manager, integration the monetizing some talked still between now ramp We're existing partnerships, through contribute. in seeing synergies business, as make an -- synergy some the think

ahead build we of quarter-on-quarter, and think again, a feel really good there's sort sequentially continues to we So more lot of the progress. us. that It about of

question Our Partners. from comes next Rich Greenfield LightShed with

sort time last things? or up two year. But meaningful from -- per how hair product do in of tremendous guess, in sort younger you're keep where I related about overall of since question, product the users, U.S. you Meaning into of it younger sort in user Are mix to the relatively I -- a of useful users shopful, a segment, seeing about. replacing users, fastest-growing at Pinterest, you're not that a and You're question sort flattish, what's acceleration are is how but is know users? than get how of be that seeing are overall you sort week your those does great. we talking a in this per amount meaningful increase of you ended joined, in older? spent You growth would happening the mean users? And given a you engagement month? think, rather of a it older terms as meaning time you more U.S. why improvement, improving losing of translating what's understand Just guess more is I love I users spent overall talked the making if younger users we per reconcile would

Yes. Rich. Thanks,

continue with, been noteworthy of to I as pretty I've consistent about see So story mature it's in mentioned, the ] my been growing that, ratio to really MAU record levels. And signs markets with this earlier happen about here, we're bringing users. And seeing [ platform on think to really to in depth consistently. that you since more I We is there if got continue the I really, about engagement to like engagement. we're encouraging depth that the think around We've on -- the Q&A, of U.S., much at that talking WAU comments really new the from users that improve.

I advertisers it's users. And record numbers peripheral as users, levels particularly, signal as were We that the -- help see adopters is like lets we And user got that help then more us heel through they where is behaviors engagement that is users or for pre in users, year-on-year, becoming so to clicks users. marginally major that place see their to really per early record us that, of previously we the with which clicks power what they're shopping may but had way The users we're buy. users navigate more deciding number platform. of their bit of where means engaging doubling bringing a looking of doing not depth wanted real achilles we dilutive bringing I on to would to see through shopping what for finding users that on an curation strength the know, as that's a engagement commentary, because we in just platform, think, depth more are where of of deepening you exactly the that new on engagement and you're about your point, which, deepening, the more my been a journey, also sort to, really be that, send now only fact somewhat user of we're earlier it normally the that your when curation be new your that deepening, engaged exactly new shared while occurring of you

question, are showed we very those this It's we last dynamics. And -- across positive losing true okay, I So to all Gen Z that I've things, we are every shared think then if growing across track we around, quarter. others? is again specific are demographic growing, track. every this your that and quarter geography that

recommendations on actionability the the of to we've users around helps. really tied really AI-driven broad-based strength is the relevancy and platform curation improvements that Hope the then and So to made and directly platform. our

Anmuth question next with Doug Our comes JPMorgan. from

about When creation have you value environment. improved ways in tools advertisers, all in the close shift? that the potentially much tougher biggest and do that I to you value between ad visibility macro opportunity do you've guess, see capture? you your gap think where for think tack And the you and a Particularly how

-- are see on we about even only advertisers like consistently what driving and the as visibility It's good measure. say we've it's the know -- pretty performance. able it, as sure of talking I'd been to

would tools us. It's make advertisers hadn't funnel really continues an really has lower think it about you of history primarily year implemented been be platform, measurement -- upper And links. as that to those if a measurement we're focus less direct Pinterest's been lot so -- with for more of a us sense a in funnel big with than

really your to the than more of sales that, at we year progress it into are all lot account And we've more less to teams down the visibility, made good and not looking ahead. see point way adopt tracking we're advertisers So level it a only to in account-by-account. that of measurement. getting But a

Our [ sales been reps have gold are on they're it, on trained ] it.

of advertisers, responding about we've them the you as get to smaller advertiser And as what's things of that into calls feedback visibility easier that talked I feel like comments on so to we couple adopt, as for that adoption conversions well were as to driving more got using pretty like. with and it good especially rooms where advertisers will need little integrated my make tools in the all clean we a a launched went successful that our the advertisers, to take ago. that's they API more large And saw the we rollout meet year really where a third-party were to that they broadly, for to than last we

with rooms. heard with third-party more measurement clean So partnerships partnerships about platforms, us talking you've more

we're Creative the you Performance And When with that, that come their So then in progress about really overall which smaller value. the the Optimization, we of easier it then and more Creation as just finally, through that in that and make making budgets. they a as if see we're think Campaign it, the again, is us see other a there's we're market. where broad retailers advertisers, they we lot think there's ad side can see particularly on shifting funnel that's doing measurement, about player Pinterest for ahead. And the Plus, them helping the so advertisers measurement, lower adopt seeing them to

for drive if and you hey, harder your If but percentage advertisers you, with measurement say, of these people getting I last getting to the of the low large, us. great fact X%, retailers. XX% really shared always-on we most now we're performance to point sophisticated budgets, call, that of conversation you single-digit to we're some performance do into if their on to to implement advertisers spend of go points And really ad We're some That's able sophisticated their up, budgets. can for get adopt. Well, spend" us. from "Oh, you have we a largest, good well, the set some our total campaign performance getting these

that all that Campaign your that to think but that to we're so making easier make to Optimization sight solve clear feedback and for and still to we and capture not the out, Plus, that this play to have responding getting and integrating tools, helps. something are your now measure period. think we're that continuing account-by-account it measurement been say, other that we're you kind to we've multi-quarter about Optimization. We performance, only As have making a to though it these advertiser easier line and it's you value of with Creative even are over a to now as because able Performance creation things Hope that campaign point it can side we're of to for of going and

Salmon next New Our question Dan with Street from comes Research.

to the from eCPMs comments wanted just I follow-up third your about lower on parties.

you to As smaller are into. noted, that undermonetized markets step these we're starting

those It you a starting So so expectations have of that then season, think tranche test can far? And extra sounds little already, is that your Are important? given like of next line it to your really follow-up do get pricing with ahead I when holiday drive just on be you're into Performance that, a vertical tranche will will that next solid that's Plus. not you coming big -- to in just in bit surprise. sort a second, Bill, retail

I build. I Maybe take the I'll that -- continue think be we've to seen Yes. just that one last steady a first.

to we than of we retail, one the sources continue started multi-quarter, sets up as continue retailers down. build progress well start we in with that steady It's the sophisticated think look and see that it we've of that. seen so saw primary strength. But And We we us it's to future retail. as take within Plus early largest, next it hit to Performance that down look Performance into us to think group further build on. we in We think that our even Plus start will advertisers most and the but then

Yes.

eCPMs. and part the your of think though, -- on first question, your I on

world we those expected where more with have auction think And add and yes, over of as for of line in markets time, even as lower sort it density ramp generally a to do we such continue eCPM. I is coming can partnerships ramping. that and we so, those markets, now feel those expect initially are just with those on sort right based markets are those they're sort pleased we lower in fact on based overall, rise. really the of of eCPMs how TAM to But we where Rest

And that's our last question, operator.

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

That will participation. your call. Thank conference all today's conclude for you

now disconnect lines. your may You