PINTEREST, INC. Q1 FY2025 earnings call

• User Growth: Global MAUs reached 570 million, marking a 10% year-over-year increase, with strong engagement per user. • Revenue Performance: Q1 revenue of $855 million was up 16% year-over-year, driven by strong advertiser performance across the full funnel. • AI Initiatives: Enhanced multimodal AI models for visual search to deliver more relevant recommendations; AI-powered ad ranking models improved click-through rates. • Performance+ Tools: Launched ROAS bidding and image resizing within the Performance+ suite. ROAS bidding addresses advertiser needs for bidding based on conversion value, and image resizing improved click-through rates on shopping ads. Performance+ outperforms traditional campaigns in 80% of AB tests. • International Expansion: Revenue growth in the Rest of World region, with 8 additional markets for reseller efforts; international mix shift impacts global ad pricing but drives net revenue.

In Q1, Pinterest achieved a record number of global monthly active users (MAUs) with 570 million, representing a 10% year-over-year growth. Q1 revenue stood at $855 million, up 16% year-over-year. Adjusted EBITDA reached $172 million. Geographically, in the U.S. and Canada, revenue was $663 million, growing 12%; Europe generated $147 million, a 24% increase on a reported basis; the Rest of World region saw revenue of $45 million, surging 49% on a reported basis. Ad impressions grew 49% year-over-year, while ad pricing declined 22%, primarily due to international mix shift as un-monetized or undermonetized international markets were increasingly monetized, carrying lower ad pricing.

• Q2 revenue is expected to be in the range of $960 million to $980 million, representing a 12%-15% year-over-year growth. • Q2 adjusted EBITDA is anticipated to be between $217 million and $237 million. • The company expects adjusted EBITDA margin expansion for 2025, but at a lower level than the significant expansion seen in 2024.

• Macro Environment Uncertainty: Impact on advertiser spend, particularly for brand-oriented advertisers. • International Mix Shift: Continued downward pressure on global ad pricing due to lower-priced ads in previously un-monetized markets. • Ad Pricing Pressure: Global ad pricing has declined year-over-year due to international market dynamics, affecting overall pricing metrics.

Q: About the 2Q guidance and tariff-exposed categories, what's the outlook?

A: Julia Donnelly noted the business remains healthy, with small pockets of spend impacted by tariffs but geographic diversification observed.

Q: How is the platform evolving and what's the advertiser receptivity?

A: Bill Ready discussed Pinterest as a shopping destination for users with strong intent and engagement, and for advertisers with AI-enabled tools creating a durable flywheel.

Q: Can you provide more on Performance+ adoption and the gap between click growth and ad dollar growth?

A: Bill Ready mentioned 80% of Performance+ campaigns outperform traditional ones, and the company is working on bridging the delta through measurement tool integration.

Q: What's the strategy for third-party demand?

A: Bill Ready said the company is testing with multiple partners, and working with Magnite as the next partner for aggregating smaller sources of demand.

Q: Talk about impression growth and UCAN trends.

A: Julia Donnelly explained that international mix shift drives global impression growth and pricing decline, and UCAN trends are less pronounced.

Q: How does the macro environment impact ad spend and the full funnel with Performance+?

A: Bill Ready stated Performance+ enables full-funnel campaigns with 2x click-through rate for advertisers doing upper and lower funnel.

Q: Discuss emerging verticals and AI code generation.

A: Julia Donnelly discussed strength in financial services and other verticals, and 25% of code being generated by AI for productivity.

Q: Comment on ROAS and user buying behavior.

A: Bill Ready said users are clicking and buying on the platform, and the company is working on the advertiser adoption cycle.

Q: Talk about capital allocation.

A: Julia Donnelly mentioned share repurchases and net share settlement, with prudent capital allocation.

Q: How does AI impact visual search and engagement?

A: Bill Ready discussed unique curation signal and fit-for-purpose AI models giving Pinterest a durable advantage in visual search and engagement