Pinterest Earnings Call Highlights Growth and AI Advances

Pinterest ((PINS)) has held its Q1 earnings call. Read on for the main highlights of the call.

Pinterest’s latest earnings call revealed a generally positive sentiment, marked by significant growth in user numbers and revenue. The company has made notable advancements in AI and visual search capabilities, which are driving these positive outcomes. However, challenges such as declining ad pricing and a fluid macro environment persist. Despite these hurdles, Pinterest’s strategic initiatives in AI, international expansion, and product innovation continue to yield promising results.

Record User Growth

Pinterest has achieved a remarkable milestone by reaching 570 million monthly active users (MAUs) globally, reflecting a 10% growth year-over-year. This record number of users underscores the platform’s increasing popularity and engagement.

Strong Revenue Growth

In the first quarter, Pinterest reported revenue of $855 million, marking a 16% increase year-over-year. This strong performance highlights the effectiveness of Pinterest’s advertising strategies across the full funnel, attracting and retaining advertisers.

Adjusted EBITDA Growth

Pinterest’s adjusted EBITDA grew to $172 million, with an adjusted EBITDA margin of 20%, representing an increase of 300 basis points from the previous year. This growth demonstrates Pinterest’s focus on maintaining profitability while expanding its user base and services.

Advancements in AI and Visual Search

The company’s proprietary multimodal AI model has proven to be 30% more effective at identifying and recommending relevant content than leading off-the-shelf models. This advancement enhances user personalization and engagement, making Pinterest a more attractive platform for both users and advertisers.

Performance+ Success

Pinterest’s Performance+ initiative has shown impressive results, outperforming traditional campaigns in 80% of AB tests. This success is driving higher click-through and conversion rates for advertisers, further solidifying Pinterest’s position in the digital advertising space.

International Revenue Growth

Revenue from the Rest of the World grew 49% on a reported basis or 59% on a constant currency basis. This growth is driven by Pinterest’s international expansion and reseller efforts, highlighting the company’s success in tapping into new markets.

Decline in Ad Pricing

Ad pricing declined by 22% year-over-year, primarily due to the international mix shift as Pinterest began serving ads in previously un-monetized or undermonetized international markets. This decline poses a challenge but also reflects Pinterest’s strategic expansion efforts.

Macro Environment Challenges

The macro environment remains uncertain, with some pockets of spend impacted by tariffs, particularly from Asia-based e-commerce retailers in the U.S. This uncertainty presents ongoing challenges for Pinterest as it navigates the global economic landscape.

Forward-Looking Guidance

Looking ahead, Pinterest has provided guidance for the second quarter, projecting revenue between $960 million and $980 million, indicating a 12% to 15% growth. The company also expects adjusted EBITDA to range from $217 million to $237 million. Pinterest plans to continue leveraging AI to enhance user experience and advertiser performance, aiming for a 4% uplift in click-through rates on ads shown in their related pin surface.

In summary, Pinterest’s earnings call reflected a positive sentiment, driven by record user growth and strong revenue performance. The company’s advancements in AI and international expansion are key factors in its continued success. Despite challenges such as declining ad pricing and macroeconomic uncertainties, Pinterest remains focused on strategic growth and innovation.