- Pinterest reported a 23% increase in year-over-year revenue for a complete of $740 million in the primary quarter, based on its latest earnings report. The gains, which beat analyst estimates, were attributed to investments in shoppability and artificial intelligence (AI).
- The number of worldwide monthly lively users (MAUs) grew 12% YoY to 518 million. Clicks to advertisers greater than doubled, attributed partly to the finished rollout of direct links to lower funnel ad formats, per comments made during an earnings call.
- In Q1, Pinterest saw its fastest revenue and user growth since 2021. The results, described by CEO Bill Ready as a “milestone quarter,” comes as Gen Z continues to flock to the platform, with the cohort now amounting to over 40% of its users and representing its fastest-growing demographic.
Pinterest continued its upward trajectory in Q1, accelerating global MAUs for the seventh consecutive quarter and nearly doubling its 12% YoY revenue growth rate from Q4 2023. The strong results, which follow similar recent earnings successes from Meta and Snap, signals healthy advertiser demand. Particularly, investments in AI and shoppability have led to greater advertiser returns and increased access to performance budgets, based on CEO Ready.
“We’re executing with tremendous clarity and focus, shipping latest products and experiences that users want, and in doing so, we’re finding our greatest product market slot in years,” the exec said in an announcement.
Pinterest is like many players within the digital space who’re betting on AI as a way forward. In an earnings call with analysts, Ready discussed past efforts just like the adoption of enormous language models (LLMs) and “next-gen” AI which have helped boosts saves, clicks and conversions through enhanced relevance and personalization for users. The platform’s AI-powered collages feature, a shoppable curation tool that enables users to chop out images and components from a Pin, or virtual bookmark, to piece together content, was a focus. Users are roughly three-times more likely to avoid wasting collage Pins — a significant slice of those containing clickable products — over other content.
Shoppable content continues to be a serious focus for Pinterest because it positions itself as greater than an inspiration hub. During the period, Pinterest brought its Shop the Look feature to video Pins, allowing users who click on a video Pin to access a carousel that may appear with shoppable Pins matching items within the video. The move builds on how the platform is integrating more shoppable content into its core surfaces including home feed, search and related items.
Shoring up value for advertisers was also a spotlight in the course of the period, particularly via lower funnel solutions. Among highlights is the finished rollout of direct links to Pinterest’s lower funnel ad formats, which now make up 97% of its lower funnel revenue, up from 80% within the prior quarter. Direct links is a feature that takes users to an advertiser’s product or purchase page. First launched at the tip of Q3 2023, they’ve helped Pinterest capture more ad spend — as much as 5% of total ad budgets — from a few of its “largest, most sophisticated advertisers,” Ready explained on the earnings call.
Notably, the platform again accelerated clicks to advertisers this quarter after greater than doubling clicks YoY in Q4, while ad impressions, which incorporates ad load and total impressions — for each organic and paid impressions — grew 38%. The company in future quarters plans to introduce a dynamic solution set that may allow advertisers to make use of generative AI to optimize creative for their ads. Additionally, it should introduce row ad bidding, which is able to robotically optimize campaigns in real time to prioritize the users and products that drive the best returns.
While Pinterest mostly sees a sunny outlook, areas of improvement remain. Despite surpassing over half a billion global MAUs, and growing its users across all geographic regions in the course of the period, nearly all of its growth stems from lower revenue markets. The U.S. and Canada, where the overwhelming majority of Pinterest’s income comes from, saw the bottom YoY growth in monthly lively users at 3%, representing a key area for improvement.
Other discussion highlights included an update on efforts to scale budding third-party demand. These include partnerships with Amazon Ads within the U.S., which is currently live across all of Pinterest’s essential surfaces within the region, and Google Ads Manager, which went live in February in unmonetized international markets. While it’s still early, the latter “can be progressing nicely,” based on Ready.
Pinterest expects Q2 revenue to be within the range of $835 million to $850 million, representing 18%-20% YoY growth.
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