Want to dig deeper on Pinterest Inc and thousands of companies?
Rapidly search an extensive universe of public and private content — earnings transcripts, company filings, equity research, trade journals, and more.
Request a Free TrialCompanies by industry
Aerospace & DefenseAutomobile ComponentsAutomobilesBanksBeveragesBiotechnologyBroadline RetailCapital MarketsChemicalsCommunications EquipmentConsumer FinanceConsumer Staples Distribution & RetailContainers & PackagingElectric UtilitiesElectronic Equipment, Instruments & ComponentsEnergy Equipment & ServicesEntertainmentFinancial ServicesFood ProductsGround TransportationHealth Care Equipment & SuppliesHealth Care Providers & ServicesHotels, Restaurants & LeisureHousehold DurablesHousehold ProductsIT ServicesIndustrial ConglomeratesIndustrial REITsInsuranceInteractive Media & ServicesLife Sciences Tools & ServicesMachineryMediaMetals & MiningMulti-UtilitiesOil, Gas & Consumable FuelsPersonal Care ProductsPharmaceuticalsSemiconductors & Semiconductor EquipmentSoftwareSpecialized REITsSpecialty RetailTechnology Hardware, Storage & PeripheralsTextiles, Apparel & Luxury GoodsTobaccoWireless Telecommunication Services
Pinterest Inc Earnings - Analysis & Highlights for Q4 2024
Overview
PositivesNegativesOutlook
- Revenue grew by 18% in Q4 and is guided to grow by 15% to 17% in Q1 on a constant currency basis.
- Ad impressions are growing while clicks to advertisers are growing faster than ad impressions and ad relevance on the search surface doubled over the past two years.
- The company ended Q4 with 553 million global monthly active users (MAUs), growing 11% and reaching another record high.
- The company saw approximately 250 bps of lift in saves and a 150-basis point lift in outbound clicks across the platform.
- The company saw strong results with a significant improvement in return on ad spend in their internal measurement system with ROAS bidding.
- Growth was partially offset by softness within the food and beverage subsector of CPG.
- Non-GAAP cost of revenue expense in Q1 2025 is expected to be consistent with Q4 2024.
- The company is guiding Q1 15% to 17% on a constant currency basis.
- The company is transitioning to provide adjusted EBITDA guidance and will no longer provide an outlook for non-GAAP operating expenses.
Q&A Highlights from Pinterest Inc Earnings Call Q4 2024
- Analyst asked about the key takeaways from 2024 and strategic priorities for 2025.
- The company doubled its revenue growth rate in 2024, from 9% in 2023 to 19%. They brought on a record number of users while deepening engagement, as evidenced by their highest-ever weekly active to monthly active ratio. They are doubling down on their strategy, and see multiple initiatives with strong, balanced execution to drive their growth in 2025 and beyond. This includes growing their user base and deepening engagement, bringing back users more frequently through actionability and curation, driving improved performance for advertisers through lower funnel product innovation and ad platform efficiencies, and complementing their strong and growing first-party business through new sources of demand.
- The company doubled its revenue growth rate in 2024, from 9% in 2023 to 19%. They brought on a record number of users while deepening engagement, as evidenced by their highest-ever weekly active to monthly active ratio. They are doubling down on their strategy, and see multiple initiatives with strong, balanced execution to drive their growth in 2025 and beyond. This includes growing their user base and deepening engagement, bringing back users more frequently through actionability and curation, driving improved performance for advertisers through lower funnel product innovation and ad platform efficiencies, and complementing their strong and growing first-party business through new sources of demand.
- Analyst asked about the GPU-enabled machine learning and GenAI areas that can be the most material drivers to further platform improvement in 2025.
- The company sees AI as a core competency, driving significant improvements in the relevance of their recommendations. They are investing in AI that drives great experiences for their users and better performance for their advertisers. This includes switching from CPU to GPU serving to leverage larger models that improve organic and ad serving, integrating LLM tech into their AI to drive user experiences like guided search, and using coding assistance to help engineers accelerate velocity of produced code. The company sees strong internal uptake in these tools and has seen improvements in their top line numbers with WAU to MAU at an all-time high, users at an all-time high, and clicks to advertisers continue to be strong even at those all-time high user numbers. They believe there is a lot of improvement to be made in their AI-generated code and Performance+, and they see AI as a key driver of platform improvement in 2025.
- The company sees AI as a core competency, driving significant improvements in the relevance of their recommendations. They are investing in AI that drives great experiences for their users and better performance for their advertisers. This includes switching from CPU to GPU serving to leverage larger models that improve organic and ad serving, integrating LLM tech into their AI to drive user experiences like guided search, and using coding assistance to help engineers accelerate velocity of produced code. The company sees strong internal uptake in these tools and has seen improvements in their top line numbers with WAU to MAU at an all-time high, users at an all-time high, and clicks to advertisers continue to be strong even at those all-time high user numbers. They believe there is a lot of improvement to be made in their AI-generated code and Performance+, and they see AI as a key driver of platform improvement in 2025.
- Analyst asked about the quarter-to-date advertising trends and the factors that got the company to the 1Q 2025 revenue outlook.
- The company saw a 18% revenue growth in Q4 and guided Q1 to 15% to 17% on a constant currency basis. The company expects to continue to drive performance across the lower and upper funnel in Q1, with a sequential acceleration. The company's new lower funnel tool set continues to drive improved value to advertisers, with a 90% increase in clicks to advertisers YoY in Q4. The company is seeing nice adoption of newer ad formats and capabilities, including ongoing growth of spotlight ads and the adoption of more granular bidding capabilities to give advertisers more bidding control across their catalog. The company is at the beginning of a multi-year product cycle for Performance+, and is seeing good results, but more opportunity is in front of them. The company expects the adoption impact to steadily build as it would with any new product rollout. The company is seeing early signs of green shoots in the food and beverage category, but challenges still remain, and the overall drag from food and beverage to the top line revenue is expected to lessen slightly in Q1.
- The company saw a 18% revenue growth in Q4 and guided Q1 to 15% to 17% on a constant currency basis. The company expects to continue to drive performance across the lower and upper funnel in Q1, with a sequential acceleration. The company's new lower funnel tool set continues to drive improved value to advertisers, with a 90% increase in clicks to advertisers YoY in Q4. The company is seeing nice adoption of newer ad formats and capabilities, including ongoing growth of spotlight ads and the adoption of more granular bidding capabilities to give advertisers more bidding control across their catalog. The company is at the beginning of a multi-year product cycle for Performance+, and is seeing good results, but more opportunity is in front of them. The company expects the adoption impact to steadily build as it would with any new product rollout. The company is seeing early signs of green shoots in the food and beverage category, but challenges still remain, and the overall drag from food and beverage to the top line revenue is expected to lessen slightly in Q1.
- Analyst asked about the contribution from third-party partnerships and how much they can be expected to contribute this year.
- The company has seen great progress in bringing in new demand, including third-party demand and resellers, to round out gaps in the auction and improve shopability. The company has made significant progress in rounding out gaps in the auction with first-party relationships leading the way, and new demand efforts providing a complement when needed. The company has driven significant improvements in the shopability of its platform, with ads and search results now being two times as relevant as they were two years ago. The company sees strength in its first-party business and advertisers coming to them directly, which is what they want, reducing the need for third-party demand. The company's capability to ingest demand from many sources such as resellers and third-party demand partners and thereby reduce gaps in the auction is more advanced than ever, allowing the company to respond dynamically when and if there are shifting demand patterns. The company will continue to test and optimize as they move forward, but they will not break out
- The company has seen great progress in bringing in new demand, including third-party demand and resellers, to round out gaps in the auction and improve shopability. The company has made significant progress in rounding out gaps in the auction with first-party relationships leading the way, and new demand efforts providing a complement when needed. The company has driven significant improvements in the shopability of its platform, with ads and search results now being two times as relevant as they were two years ago. The company sees strength in its first-party business and advertisers coming to them directly, which is what they want, reducing the need for third-party demand. The company's capability to ingest demand from many sources such as resellers and third-party demand partners and thereby reduce gaps in the auction is more advanced than ever, allowing the company to respond dynamically when and if there are shifting demand patterns. The company will continue to test and optimize as they move forward, but they will not break out
- Analyst asked about engagement on Pinterest and how the company's weekly active to monthly active ratio is at an all-time high for the platform, with a record number of users.
- William J. Ready, CEO of Pinterest, explained that the weekly active to monthly active ratio is at an all-time high for the platform, with a record number of users, and that the company's strategy is to bring actionability to the forefront of the user experience, drive curation through boards and collages, and create a positive space for users. He also noted that users continue to grow nicely, with another quarter of all-time user highs, and that the company is getting the dynamics that they'd want with deepening engagement across the platform.
- William J. Ready, CEO of Pinterest, explained that the weekly active to monthly active ratio is at an all-time high for the platform, with a record number of users, and that the company's strategy is to bring actionability to the forefront of the user experience, drive curation through boards and collages, and create a positive space for users. He also noted that users continue to grow nicely, with another quarter of all-time user highs, and that the company is getting the dynamics that they'd want with deepening engagement across the platform.
- Analyst asked about the contribution of all the product innovation that Pinterest has done and will do this year, such as Performance+, spotlight ads, new bidding capabilities, increasing ad load, and deep linking.
- William J. Ready explained that Pinterest has been on a journey to make the platform a true performance advertising platform, and that the things they've done, such as direct links, mobile deep linking, and conversion API, have compounding effects over not just multiple quarters, but multiple years. He also noted that the company's lower funnel innovation, including direct links, mobile deep linking, and conversion API, have had a significant impact on their revenue growth rate, with clicks up 90% in Q4 after lapping the 100% click growth from the prior year. He stated that while Performance+ is still in its early days, there is still a lot of yield to come from these various efforts, and that the company is doubling down on their strategy. He also mentioned that advertiser adoption is going well, with testing showing a 20% CPA improvement for advertisers using Performance+ for shopping ad campaigns, and that the company will continue to roll out features in the Performance+ suite over the course of this year and next.
- William J. Ready explained that Pinterest has been on a journey to make the platform a true performance advertising platform, and that the things they've done, such as direct links, mobile deep linking, and conversion API, have compounding effects over not just multiple quarters, but multiple years. He also noted that the company's lower funnel innovation, including direct links, mobile deep linking, and conversion API, have had a significant impact on their revenue growth rate, with clicks up 90% in Q4 after lapping the 100% click growth from the prior year. He stated that while Performance+ is still in its early days, there is still a lot of yield to come from these various efforts, and that the company is doubling down on their strategy. He also mentioned that advertiser adoption is going well, with testing showing a 20% CPA improvement for advertisers using Performance+ for shopping ad campaigns, and that the company will continue to roll out features in the Performance+ suite over the course of this year and next.
- Analyst asked about the benefits and opportunities of ROAS bidding, and how the company plans to leverage it.
- The company sees a compounding effect and direct links as a way to drive value creation and capture. They have launched mobile deep linking and direct links in the back half of 2023, and advertisers have adopted their measurement tools, leading to an increase in budgets allocated to Pinterest. The company also sees value in Performance+, which makes it easy for advertisers to take action on the value created. They have created tremendous value through direct links, mobile deep linking, and the shopability of their users, and they see more value in front of them than behind them.
- The company sees a compounding effect and direct links as a way to drive value creation and capture. They have launched mobile deep linking and direct links in the back half of 2023, and advertisers have adopted their measurement tools, leading to an increase in budgets allocated to Pinterest. The company also sees value in Performance+, which makes it easy for advertisers to take action on the value created. They have created tremendous value through direct links, mobile deep linking, and the shopability of their users, and they see more value in front of them than behind them.
- Analyst asked about the company's MAU growth and how they plan to improve the DAU to MAU ratio.
- The company does not guide to users, but they see a positive trajectory in giving better recommendations to users, curating content, and making it easier for users to take action. They have seen record highs in MAU and all-time highs in WAU to MAU ratios, and they believe the underlying effects driving user engagement and MAU growth are durable. They see a lot more to do to continue doubling down on that work, as the size of the shopping market is significant.
- The company does not guide to users, but they see a positive trajectory in giving better recommendations to users, curating content, and making it easier for users to take action. They have seen record highs in MAU and all-time highs in WAU to MAU ratios, and they believe the underlying effects driving user engagement and MAU growth are durable. They see a lot more to do to continue doubling down on that work, as the size of the shopping market is significant.
