Pinterest, Inc.

Good evening. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the Pinterest first quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Jane Penner, Head of Investor Relations for Pinterest. You may begin your conference.

Thank you, Brent. Good afternoon and thank you for joining us. Welcome to Pinterest's earnings conference call for the first quarter ended March 31st, 2020. Joining me today on the call are Ben Silbermann, our President and CEO, and Todd Morgenfeld, our Chief Financial Officer. Now I'll cover the safe harbor. Some of the statements that we make today regarding our business and financial performance and operations, including the impact of COVID-19 pandemic, may be considered forward-looking, and such statements involve a number of risks and uncertainties that could cause actual results to differ materially. Our results for Q2 2020 are preliminary and may not be an indication of future performance. We are making these forward-looking statements based on information available to us as of today, and we disclaim any duty to update them later unless required by law. For more information, please refer to the risk factors discussed in our most recent Form 10-Q or 10-K files with the SEC and available on the investor relations section of our website. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release and Letter to Shareholders, which are distributed and available to the public through our investor relations website located at investor.pinterestinc.com. And now I'll turn the call over to Ben.

Good afternoon and thanks for joining us today. Obviously, the world has changed a lot since we did our last call back in February. And on behalf of our entire company, I just want to thank all the heroes out there who are helping people through this tough time. Like every person in every business, we're figuring out how to manage and work through the current health and economic crisis. And that starts with making sure our employees are safe and healthy. It also means ensuring that Pinterest is a valuable resource for people as they adjust to life in this new reality. Over the last month and a half, we've learned that our mission of bringing everyone inspiration for their lives has never been more relevant than it is right now. Over the past weeks, we've seen record high engagement From existing users, resurrected users, and new users. Prior to COVID-19, we saw gains driven by product investments that are detailed in this quarter's and past shareholder letters. The stay-at-home orders that began in mid-March significantly accelerated this trend. When the COVID crisis began, we immediately prioritized the safety of our users by helping them find reliable health information during the pandemic. And as people sought practical solutions for challenges created by the crisis, They discovered new ways to use Pinterest and also deepened their existing uses of services. They searched for things like recipes for freezer-friendly meals, getting ideas for homeschooling, researching home gym equipment, or figuring out how to do haircuts from home. We're proud that Pinterest is helping people all over the world get through this difficult time. We're also working with advertisers as they adjust to this new economic climate. The quarter began with a continuation of the strength we've seen in Q4. But the pandemic began to impact our business during March. As offline stores closed around the world, many advertisers slowed or paused their advertising spending on Pinterest. For those advertisers that paused, we're sharing our insights to help them plan and eventually reaccelerate and reactivate their spend. Pinterest is where consumers have always looked for ideas and planned their lives, and we're offering CMOs valuable insights to help them decide how to spend their 2020 budgets. For those advertisers that continue to spend, we've seen a shift away from awareness campaigns and towards highly performant ads, an area we've invested heavily in over the past year. As a result, our conversion optimization ads and shopping ads are a much bigger part of our product mix today than they were a year ago. These ads are delivering real value to marketers with ROI accountable objectives, particularly as Pinner's engagement with shopping services has increased significantly over the same period. Finally, While we're working to help pinners and advertisers through this current crisis, we remain firmly committed to our long-term strategies. We continue to invest in our vision to be the home of the Internet's most inspiring content, to help users discover more ways to use Pinterest in their lives, to let pinners easily purchase things they find on our service, and to create value for a much more diverse base of advertisers. We have the benefit of having a balance sheet that allows us to continue to pursue these outcomes. As you know, we withdrew annual guidance because we have limited visibility to future advertiser demand. That remains the case, but Todd and I will continue to provide as much transparency into our current business as possible as things evolve in the coming months. With that, we'll turn it over to Q&A. Brent, we're ready for our first question.