Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Pinterest Inc (PINS, Financial) reported a record high of 537 million monthly active users in Q3 2024, reflecting an 11% year-over-year growth.
- The company achieved an 18% year-over-year revenue growth in Q3 2024, driven by strong performance in lower funnel revenue.
- Pinterest Inc (PINS) has successfully integrated AI into its platform, enhancing user engagement and ad relevance, leading to a 300 basis point improvement in actionable engagement.
- The company has expanded its third-party demand partnerships, including an extension of its relationship with Amazon Ads to Canada and Mexico.
- Pinterest Inc (PINS) launched Performance+, an AI-driven advertising tool that simplifies campaign creation and improves cost per action by 10% on average.
Negative Points
- The food and beverage subsector of CPG continues to experience softness, impacting overall growth.
- Despite strong revenue growth, ad pricing declined by 17% year-over-year due to a mix shift from international markets.
- The adoption of new features like Performance+ is still in the early stages, with advertisers limiting budget shifts during the holiday peak period.
- Pinterest Inc (PINS) faces macroeconomic headwinds, particularly in the food and beverage category, which affects revenue growth.
- The company is still in the early days of its international expansion efforts, which may take time to significantly impact revenue.
Q & A Highlights
Q: Could you discuss the Q4 guidance and any macroeconomic factors affecting it?
A: Julia Donnelly, CFO: We are guiding Q4 revenue growth at 15% to 17%, similar to Q3. This reflects ongoing strength in lower funnel revenue growth and third-party demand partnerships. However, we continue to see softness in the food and beverage sector due to broader industry headwinds. Performance+ is still in early rollout, with more functionality expected in Q1 2025, which will further drive growth.
Q: What are the key ad innovation focal points for 2025, and how have AI capabilities influenced these?
A: William Ready, CEO: We are focused on building a full funnel platform with an emphasis on the lower funnel. Initiatives like mobile deep linking, direct links, and CAPI have increased share of wallet with advertisers. Performance+ will further automate and optimize campaigns, especially for midsized accounts. AI capabilities have enhanced ad relevance and engagement, supporting our growth strategy.
Q: How should we think about the contribution of Performance+ to 2025 growth?
A: William Ready, CEO: Performance+ is expected to drive growth by simplifying campaign creation and improving performance. It reduces inputs needed for campaigns by 50% and improves cost per action by over 20%. This will help us reach more midsized advertisers and increase inventory from existing advertisers, contributing to growth throughout 2025.
Q: Can you elaborate on the engagement trends and the impact of AI on shoppable engagement?
A: William Ready, CEO: Engagement has been a bright spot, with improvements in weekly active to monthly active user ratios. AI has enhanced the relevance of shoppable content, driving deeper engagement. We continue to see an increase in sessions with actionable engagement, aligning with our shift towards a more shoppable platform.
Q: How are the Amazon and Google partnerships progressing, and what impact do they have on monetization?
A: William Ready, CEO: Both partnerships are progressing well, with Amazon expanding to Canada and Mexico. These partnerships are filling gaps in our auction and building sequentially. While still early, they are contributing to monetization, particularly in international markets, and we expect continued growth from these collaborations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
