Pinterest, Inc.

Good afternoon. Thank you for attending today's Pinterest first quarter 2025 earnings call. All lines will be muted during the presentation portion of the call with an opportunity for questions at the end. If you'd like to queue for a question, please dial star one on your telephone keypad. I now hand the call over to Andrew Somburg, VP of Investor Relations and Treasury. You may proceed.

Good afternoon, and thank you for joining us. Welcome to Pinterest earnings call for the first quarter ended March 31st, 2025. My name is Andrew Somburg and I'm vice president of investor relations and treasury for Pinterest. Joining me on today's call are Bill Reddy, Pinterest CEO and Julia Donnelly, our CFO. This conference call is being webcast and we are also providing a slide presentation to accompany our commentary. Please refer to our investor relations website at investor.pinterest.com to find today's presentation, webcast and earnings press release. Some of the statements that we make today regarding our performance, operations, and outlook may be considered forward looking and such statements involve a number of assumptions, risks, and uncertainties that could cause actual results to differ materially. In addition, our results, trends, and outlook for Q2 2025 and beyond are preliminary and are not an assurance of future performance. We are making these forward looking statements based on information available to us as of today. and we expressly disclaim any duty or obligation to update them later unless required by law. For more information about assumptions, risks, uncertainties, and other factors that could affect our results, please refer to our most recent Form 10-Q and Form 10-K, each filed with the SEC and available on our investor relations website. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures is included in today's earnings press release and presentation, which are distributed and available to the public through our investor relations website. Lastly, all growth rates discussed in today's prepared remarks should be considered year over year unless otherwise specified. And now I'll turn the call over to Bill.

Thanks, Andrew. Good afternoon, and thank you for joining our first quarter 2025 earnings call. In Q1, we demonstrated the strength and effectiveness of our long-term strategy and remained laser focused on delivering value for our users and advertisers. We finished the quarter with another record number of users, reaching 570 million MAUs globally, reflecting 10% growth year over year. At the same time, we generated Q1 revenue of $855 million, up 16% year over year, due to the strong performance we are driving for advertisers across the full funnel. We also grew adjusted EBITDA to $172 million as we continue to focus on driving profitable growth. while simultaneously investing in high ROI areas to enable us to reach our longer-term opportunity. Before getting into the details of Q1, I'd like to discuss the current macro environment we're operating in. Our business, including our top-line revenue growth, remains healthy. This is an indication that our efforts to build a more engaging and actionable product for our users and a more performant product for our advertisers are working. The strong fundamentals in our business are the result of the strategic priorities we've executed against. Taking Pinterest from a platform with declining users and modest revenue growth a few years ago into a secular share taker with a more resilient business than ever before. Today, Pinterest is a shopping destination with roughly 85% of our monthly active users coming directly to our mobile app, which is up nearly 10% 10 points for the middle of 2022. As we've made our platform more actionable and generated growing numbers of clicks and conversions. we've become a vital partner for advertisers across a range of categories seeking to reach our high intent users and drive sales. In turn, we are increasingly accessing always on performance budgets, which are larger and tend to be more durable. Furthermore, an uncertain macro environment where consumers are more intentional and discerning with their spend presents an opportunity for Pinterest to deliver differentiated utility for our users. Our users are planners and often come to us for their most considered purchases, As such, our ability to leverage AI to personalize our users' experience is a key differentiator and has enabled us to find our best product market fit in years. It also makes us a highly valuable partner to advertisers that are looking for early signals on how consumer trends may be shifting before it shows up in traditional purchasing data. From where I sit today, I'm proud of our consistent execution, the progress we've made to improve the resiliency of our business, and I remain confident that the strategy we've employed will endure for the long term. With that, I'll now shift to our quarterly update on users and engagement, where I'll discuss just how we're delivering a differentiated product experience to ultimately drive deeper engagement with our users. A key driver of our success is our intentional effort to build a better, more relevant platform for our users, one that connects them to styles, products, and aesthetics they may not have the words to describe. In fact, According to academic studies, 50% of the human brain is wired for visual processing. The ability for users to explore their interests visually and take action on them is one of our core differentiators and an important reason why users come to our platform in the first place. This is especially relevant for Gen Z, our largest and fastest growing user cohort, who have been raised on an internet of visual content across images and video, and who find utility in the ability to search visually. Over the years, We've been investing to strengthen our visual search and content understanding capabilities to match content from our corpus of billions of pins to a user's taste and style. This means that a search query that may begin as beach dinner outfit ends with a user finding and purchasing the perfect pair of linen pants along with great accessories from the site or app of a brand that they love or a brand that Pinterest helped them discover. Throughout 2025, we're doubling down on our visual search capabilities to help users discover and effortlessly shop what inspires them, all powered by our enhanced multimodal AI models. Our latest model is trained on both image and text data, deepening its ability to understand a pen by creating a more informative and comprehensive representation of its content. This allows the model to better interpret user input and ultimately provide better recommendations. In fact, Our proprietary multimodal AI model that powers visual search on Pinterest is 30% more likely to identify and recommend relevant content from our corpus than leading off-the-shelf models. This advantage stems from the innovations we've made to deploy this model at scale for our unique use case and from leveraging our extensive signal from the hundreds of billions of user actions that take place on our platform and make up our taste graph, which has grown 75% over the past two years. This ultimately leads to more relevant recommendations and a better experience throughout the user's journey. Leveraging this enhanced multimodal technology, we are unlocking a new level of personalization for our users. Earlier this month, we launched an entirely new user flow on women's fashion pens globally that upgrades the visual search experience on Pinterest, allowing our users for the first time to search and refine their taste using multimodal image and text-based inputs. This new user experience flow starts with the search image icon in the form of a magnifying glass. Once in this flow, users can select an element of the pen to zoom in on and refine their search further using suggested attributes and filters recommended through our AI models. For example, if a user comes across a lifestyle image of a celebrity wearing a stylish pair of sneakers, they can utilize this new flow to hone in specifically on the shoes to find content with a similar aesthetic. including other products and lifestyle images. Once they do so, they might see descriptor words like streetwear or athleisure, alongside terms like graphic pattern or earth tones, which further specify visual or stylistic characteristics of the image, and also allow the user to narrow down their search to the products and images that are most relevant to them. And through this new flow, we also connect users to a carousel of shoppable products from our catalog that match the characteristics of what they're searching for, in turn allowing them to seamlessly go from inspiration to action. With hundreds of millions of users, one of the largest image corpuses in the world, and leading AI capabilities, Pinterest is a leader in visual search. As the landscape continues to evolve, I'm excited about the innovations we're making to our platform to continue offering a differentiated experience for our users. Turning to modernization. All of the efforts we've made to improve our user experience directly tie to our value proposition for advertisers. This is our flywheel. A richer user experience with more actionability drives deeper engagement, providing us more unique signals to serve relevant ads. Since relevant ads are additive to the user experience on Pinterest, as they allow in-market consumers to connect with products and brands they may like to purchase, we can scale up the amount of ads we're able to show users, ultimately increasing the amount of impressions we're able to monetize. At the same time, we're improving the overall efficiency, relevancy, and performance of each ad served, driving higher click-through and conversion rates by leveraging our AI recommendation models to better understand a user based on past activity and predict the type of ad that might be best suited for them at that given moment. For example, we recently developed an innovative approach to effectively integrate large-scale knowledge graph embeddings into our ads ranking models to drive better performance for advertisers. These knowledge graph embeddings are a way of extracting complex networks of user interactions and ingesting them into our ads ranking models in a format that they can better interpret. This drives improved recommendations for users, leading to a 4% uplift in click-through rate on ads shown in our related PEN surface. The end result of this is a more shoppable and relevant experience for the user and a more performant ad suite for our advertisers. Our flywheel comes to life for advertisers by offering the ability for them to market across the full funnel, which is synergistic with the way users engage with our product. Advertisers can reach consumers throughout their entire shopping journey, from building upper funnel awareness to driving lower funnel conversions. We're seeing that advertisers are using upper funnel objectives in tandem with lower funnel objectives to create full funnel campaigns with even better performance. In fact, those who spend on multiple objectives see nearly two times higher conversion rates than those who spend on one objective alone. This approach addresses the longer term industry trend we're seeing of CMOs seeking to tie upper funnel brand dollars back to their own revenue growth objectives. Turning to our lower funnel ad offerings, Over the last few quarters, we've rolled out and expanded our performance solution set to drive advertiser value while improving the efficiency of advertisers' time and dollars. These efforts continue to yield benefits with clicks to advertisers up significantly year on year, even as we lap the rollout of direct links. They also compound. As advertisers adopt multiple tools, they see more benefits accrue. As a result, some of the most sophisticated performance marketers in the world are spending 5% to 10% of their advertising budgets on Pinterest as they lean into our lower funnel tools and the improved performance in the form of increased clicks and conversions that we're delivering. In Q1, we made further inroads on our lower funnel performance efforts by launching additional bidding functionality into our Performance Plus suite with ROAS bidding, which went into general availability in March. Previously, our automatic bidding functionality optimized for the maximum number of conversions at the lowest cost. While this remains a core offering for many advertisers, ROAS bidding addresses the need for some advertisers who want to bid based on basket size. For example, a retailer with a large variance in catalog price points may want to bid on conversion value versus conversion volume. While still in the early rollout days, we received positive initial feedback and adoption from advertisers, PacSun, a lifestyle clothing brand popular with Gen Z, saw a three times higher return on ad spend using ROAS bidding within their catalog campaigns compared to their previous campaigns. We also enhanced Performance Plus Creative with image resizing. Image resizing is a scaled way for advertisers to bring their shopping catalog creative, which may be designed or optimized for other platforms, and automatically enhance the ad's visuals through resizing and cropping to better fit the Pinterest platform. While still in beta, initial results on shopping ads using imagery sizing show a 6% improvement in click-through rate compared to those without. Through the year, we expect to test and launch more scaled ways to improve advertiser creative within the Performance Plus suite, further automating and optimizing the process of building campaign collateral for advertisers. Overall, we feel great about what we're seeing so far with Performance Plus. As a reminder, Performance Plus brings together existing AI-powered advertiser tools that we've built and launched over multiple years into a simplified campaign setup while also adding new creative and bidding functionality. We brought this new automated AI suite into general availability in Q4 and continue to make meaningful product improvements to bolster our offering and drive efficiency and value to lower funnel advertisers. We consistently see that Performance Plus outperforms traditional campaigns in 80% of A-B tests. a testament to the continued value creation we're driving to our advertisers. While we're pleased with our progress, we're still in the early days of driving adoption and will continue to drive advertisers to adopt the full Performance Plus suite of solutions in the quarters and years ahead. Performance Plus is just the latest product in our suite of new lower funnel tools, which are leading to a significant transformation in our business. In our US and Canada region, where we're furthest along in lower funnel shopping, we've been breaking into always on performance budgets. We're seeing that some of the largest, most sophisticated accounts are increasing their share of wall with us. And within those accounts, over 85% of their trailing 12 month spend has been in the lower funnel. We are also seeing budget penetration with the next tranche of advertisers, specifically those in the one to $30 billion sales range. Those advertisers are seeing results from our performance tools and increasing spend following continued value creation through 2024 from direct links, CAPI adoption, and the initial stages of the performance plus rollout. For markets outside of the US and Canada, we are successfully exporting our lower funnel shopping playbook and increasing actionability. Revenue from our catalog shopping ads format was up meaningfully in Q1 year over year. with both the Europe and rest of world regions growing shopping ad revenue over three times faster than the overall revenue growth of their respective regions, as we drive deeper budget penetration in these markets and unlock new accounts focused on performance. International revenue is also benefiting from the scaled solutions we've unlocked over the past year, including resellers and other demand partnerships. In Q1, we expanded our reseller efforts to eight additional markets, while making strong progress through these reseller partnerships in previously unmonetized or undermonetized countries. Finally, I'll touch on our commitment to improve conversion visibility and measurement. As the industry becomes increasingly focused on data-driven results, the need for privacy-centric measurement remains a priority, even as the privacy landscape continues to evolve. In Q1, We drove increased coverage of our privacy centric measurement tools across our revenue base through continued adoption of our own solutions like conversions API and clean rooms and integrations with third party measurement partners. We also recently entered into strategic partnerships with North beam and triple whale. These partnerships aim to improve the accuracy of Pinterest performance measurement by providing more comprehensive cross channel measurement to help advertisers understand the true value of their spend on Pinterest. Overall, I'm proud of our team and their continued strong execution on our strategic plan. With that, I'll turn the call over to Julia to share more details about our financial performance.