PINTEREST, INC. Q3 FY2024 earnings call

• AI is core: Powers recommendations, ad relevance, and monetization. AI models generate over 400M predictions/sec. Improved actionable engagement by 300 basis points with fine-tuned models.
• User growth and engagement: Monthly active users at record high (537M), 11% y-o-y growth. Enhanced user inspiration-to-action journey with shoppable features, collage tools, and visual shopping indicators. Weekly active to monthly active user ratio improving.
• Monetization: Revenue up 18% y-o-y, driven by lower-funnel strength. Rolled out lower-funnel products like Mobile Deep Linking, Direct Links, and Performance+ (AI-driven budgeting, bidding, targeting). Performance+ saw 50% fewer inputs for campaign setup and 10% better cost per action.
• Global partnerships: Expanded Amazon Ads to Canada and Mexico, Google partnership growing, reseller partnerships driving revenue in over 30 under-monetized markets.
• Holiday launches: Gift Guides for users, Promotions and deal ad modules for advertisers to drive sales during holiday season.

In Q3 2024, Pinterest had 537 million global monthly active users (MAUs), growing 11% to a record high. Global revenue was $898 million, up 18% on reported and constant currency basis. Ad impressions grew 41%, while ad pricing declined 17% year-over-year. Geographically, US and Canada revenue was $719 million (up 16%), Europe revenue was $137 million (up 20% reported and constant currency), and rest of world revenue was $42 million (up 38% reported, 45% constant currency). Vertical strength was in retail, with emerging verticals like financial services, automobiles, and technology also strong, though food and beverage CPG subsector was soft.

• Q4 2024 revenue guidance: $1.125 billion to $1.145 billion, 15%-17% growth y-o-y.
• Expense guidance: Non-GAAP operating expenses $495M-$510M, up 11%-14% y-o-y.
• Adjusted EBITDA margin: Expect year-over-year expansion, though more modest in second half as previous year's gains are annualled.

Q: Ross Sandler asked about Q4 guide deceleration, category strength/weakness, and 2025 outlook.

A: Julia noted lower funnel growth continues, but food and beverage softness persists. Performance+ early rollout, ROAS bidding in Q1 2025.

Q: Brian Nowak asked about 2025 ad innovation focal points and ad revenue growth.

A: Bill mentioned lower funnel platform build, Performance+ rollout, SKU level bidding, ROAS bidding, and global partnerships driving growth.

Q: Ken Gawrelski asked about Performance+ contribution to 2025 growth and advertiser adoption.

A: Bill said Performance+ early results good, multi-quarter adoption cycle, ROAS bidding in Q1, helping gain share of wallet.

Q: Ron Josey asked about engagement rates and lower funnel tool adoption.

A: Bill talked about WAU to MAU ratio improvement, actionability driving engagement, multi-quarter adoption cycles for lower funnel tools with compounding benefits.

Q: Shweta Khajuria asked about ad load and platform opportunities.

A: Bill said ad load has headroom, driven by relevant ads, Performance+, and ROAS bidding, with WAU to MAU ratio improving.

Q: Mark Mahaney asked about Amazon/Google partnerships and ROW monetization.

A: Bill said partnerships progressing, early days in ROW but encouraging progress.

Q: Rich Greenfield asked about UCAN engagement and time spent.

A: Bill talked about WAU to MAU ratio improvement as a measure of engagement, not time spent, driven by relevant recommendations.

Q: Colin Sebastian asked about new advertisers and Europe monetization.

A: Bill said new advertisers and share of wallet gains from existing, Julia noted Europe growth despite tougher comp, driven by retail strength.

Q: Doug Anmuth asked about hurdles in value capture and rest-of-world advertiser spending.

A: Bill said progress on privacy resilient measurement, more value capture to go, Julia noted rest-of-world seeing good acceleration.

Q: Dan Salmon asked about third-party partnership strategy.

A: Bill said intent to work with multiple partners to bring more advertiser demand to meet commercial intent on the platform.