Pinterest, Inc.

Good day and thank you for standing by. Welcome to the Pinterest first quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, you may press star 0. And without further ado, I would like to welcome your host for today, Ms. Jane Penner, Head of Investor Relations. Ma'am, the floor is yours.

Thank you, Carl. Good afternoon, and thank you for joining us. Welcome to Pinterest's earnings call for the first quarter ended March 31, 2021. I'm Jane Penner, Head of Investor Relations for Pinterest. Joining me today on the call are Ben Silberman, Pinterest's president and CEO, and Todd Morgenfeld, our chief financial officer and head of business operations. Now I'll cover the safe harbor. Some of the statements that we make today regarding our performance, operations, and outlook, including the impact of the 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. In addition, our results, trends, and outlook for Q2 2021 are preliminary and are not 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 forms 10Q or 10K filed 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 the 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.

Hello, everyone. Thanks, Jane, and thanks, everyone, for joining today. I just want to start by acknowledging that last March was the start of the pandemic, and we're not still fully through it. Leading through this difficult time has been a humbling experience, and I'm deeply proud of everyone at Pinterest for their commitment to our teams, to our partners, and to our pinners. I'm also proud that during a challenging time, we've shared inspiration with hundreds of millions of people around the world and helped businesses reach customers when their physical storefronts may have been closed. Like all of you, I look forward to seeing the pandemic end and look forward to a time when we can be together once again. Now today, Todd is going to go into specifics regarding our financial results, and I'll talk about how we're thinking about Pinterest as we begin to come out of the pandemic. But I want to start by saying that this is a strong quarter. We're confident in our strategy and excited about the investments we're making. Let me offer some more details. First, more people are using Pinterest to inspire and plan their lives than ever before. Our monthly active users grew 30% to more than 478 million users globally, with strong growth coming from Gen Z, a persistent trend that we've seen for several quarters. We also saw product searches grow more than 20x year over year. Increasingly, people see Pinterest as a place to not only get inspired, but also to shop. Our business is strong. Advertisers are inspiring pinners and they're generating sales on Pinterest. We grew revenue 78% year over year, driven by more small to mid-sized advertisers and further international expansion. Businesses appreciate that Pinterest is a positive place where people are coming to get new ideas for their life. Well-targeted ads make Pinterest more useful rather than being a distraction from what people are there to do. these businesses are seeing strong business results driven significantly by the investments we've made to make our advertising products more effective and easier to use third we're working to help people feel more inspired in every aspect of their life and that starts with giving people the most inspiring content we continue to invest in new inspiring forms of content like story pins story pins on pinterest are different from stories and other platforms They're less about what somebody else did and more about what you could do now and in the future. Unlike stories and other platforms, they never disappear, and they don't just show up for followers. They show up for anybody looking for an idea like yours, like what you need to do to get your home decorated, that dinner made, or that workout done. In Q1, we started distributing story pins more broadly throughout our creator ecosystem, and we're excited by the uptake we're already seeing. As we continue to distribute Storypins, pinners will need to learn new ways to navigate and use Pinterest. This could change engagement in the coming quarters, but we're confident that over time, investing in new media formats like Storypins will inspire our community, provide new ways to engage with Pinterest more deeply, and create new revenue opportunities for creators and businesses alike. We're also making it easier for pinners to take ideas they see and make them real. The number of pinners engaging with shopping services on Pinterest has grown over 200% in the last year, as pinners look to go from inspiration to purchase. At the end of Q1, revenue from retailers with sales objectives were 20% of total revenue. And all this shows that we're making real traction with shopping on Pinterest. As a next step, we're excited to begin testing seamless on-platform transactions later this year. And finally, we continue to expand our business globally. We launched advertising in Brazil this quarter, an important milestone in growing our global ads business. We expanded our Shopify integration to 27 additional countries to help us further build Pinterest as the destination for shopping. And for the first time, our international business is nearly 20% of total revenue. We're seeing a lot of strength in our business, but it's important to note that since the pandemic began, we've seen a correlation between stay-at-home orders and engagement on Pinterest. Pinterest has always been popular for home improvement, recipe collection, and lesson planning. And naturally, many of us did more of these things during our time at home, which brought more people to Pinterest in 2020. As pandemic lockdowns were eased in some parts of the world during mid-March, we began to see signs of less engagement and user growth on Pinterest. And we assume this means people are spending more time offline. While it's impossible to say how people act as we enter the summer months, we anticipate this trend will continue. Finally, I'd like to note that like the entire online advertising industry, we're faced with changes to the privacy landscape. We've talked for over a year about the steps we're taking to ensure advertisers understand the effectiveness of their ads while also keeping pinner privacy in mind. This includes investments in new first-party solutions, enhancements to ad targeting. People naturally come to Pinterest to search, shop, and find ideas for brands and creators. Personalization based on this onset activity won't be affected by the upcoming changes. That said, it's still early days. It is not yet clear what the long-term impact will be. To close, I'd like to note that this past year has reinforced the importance of our mission. Pinterest is not the place to read the news or debate politics with your cousin or compare yourself to other people. It is a positive place to be inspired and get ideas in your future life. This is reflected in our content and ad policies, our efforts to combat COVID vaccine misinformation, our new creator code and comment moderation tools designed to keep new content formats positive and inspiring, and our continued focus on engineering products for positivity with new inclusive search features like skin tone ranges now available in 13 countries. I'm excited about how far we've come over a challenging year and even more excited about where we're going in the future. I'll now pass it on to Todd.