Pinterest (PINS) 7 Nov 24 2024 Q3 Earnings call transcript

In Pinterest's third quarter 2024 earnings call, the company showcased robust growth and strategic initiatives, highlighting its commitment to leveraging AI to enhance user experience and monetization. Here's a summary of the key takeaways from the call.

Strategic Initiatives and Financial Performance

Pinterest's CEO, Bill Ready, emphasized the company's strategic initiatives to drive sustainable growth, including:

1. Growing users and DPA engagement per user 2. Making ads relevant content 3. Executing on the lower funnel revenue opportunity 4. Driving demand through third-party partners, resellers, and international markets

These initiatives have led to a 18% year-over-year revenue growth and expanded adjusted EBITDA margins by more than 800 basis points. The company's operating results validate its strategic vision and commitment to delivering on its targets.

AI-Powered Growth

Pinterest has made significant strides in using AI to enhance its platform, with all content served on Pinterest powered by AI recommendation models. This has resulted in a 300 basis point improvement in actionable engagement compared to using off-the-shelf models not fine-tuned with Pinterest's data. The company's unique user signals and deep understanding of individual interest and taste enable it to power monetization with highly relevant ads, making the ads useful content for users.

User and Engagement Metrics

Pinterest reported record high monthly active users of $537 million, reflecting 11% year-over-year growth. The platform's user base is increasingly discovering its value as a shopping destination, with 66% of weekly Gen Z pinners saying Pinterest is the first or first service they used to shop. The company's efforts to improve the user inspiration-to-action journey, such as integrating shopability into all major user experiences and leveraging computer vision technology, are driving engagement and curation actions.

Monetization and Advertising

Pinterest's focus on making its platform more actionable for users has led to significant improvements in monetization. The company's lower funnel revenue is the fastest-growing part of its business, with advertisers increasingly seeing Pinterest as a great place to connect with customers. Pinterest's AI-powered ad ranking and delivery systems have significantly improved advertiser performance, leading to a 4% plus cost per action improvement for shopping ad campaigns.

Outlook for the Future

Looking ahead, Pinterest is focused on expanding its shoppable content, refining recommendations through improved personalization and relevance, and seamlessly connecting users and merchants. The company's efforts to improve user understanding of shoppable content and expand the availability of shopping features to a broader audience are expected to drive further growth.

In conclusion, Pinterest's third quarter 2024 earnings call underscored the company's strong financial performance and strategic vision. The company's focus on AI-powered growth, user engagement, and monetization is positioning it well for future success. With a clear roadmap for growth and a commitment to leveraging AI to enhance user experience and monetization, Pinterest is well-positioned to continue its trajectory of innovation and growth.