Q1 2021 Pinterest Inc Earnings Call
Serially. In addition, our results trends and outlook for Q2 2021 are preliminary and are not an indication of future performance.
And we're 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 10-Q or 10-K filed with the SEC and available on the Investor Relations section of our <unk>.
Site.
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 Dot Pinterest, Inc. Dot com.
And now I'll turn the call over to them.
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 and deeply proud of everyone at pinterest for their commitment to our teams to our partners into our peanuts.
I'm also proud that during a challenging time, we've shared inspiration with hundreds of millions of people around the world and help businesses reach customers when their physical storefronts may have and closed.
Like all of you and I look forward to seeing that academic and and look forward to a time and we can be together once again.
And today, Todd is going to go into specifics regarding our financial results and I'll talk about how we're thinking about interest as we begin to come out of the pandemic, but I want to start by saying that this was a strong quarter.
We're confident 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 and ever before.
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 20 X year over year.
Increasingly people see pinterest as a place to not only get inspired but also to shop.
Second our business is strong.
Advertisers are inspiring pinterest and theyre 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 the Pinterest is a positive place where people are coming to get new ideas for their lives well targeted ads, a pinterest more useful rather and that being a distraction from what people are there to do.
And these businesses are seeing strong business results driven significantly by the investments we've made to make for advertising products more effective and easier to use.
Third we are working to help people feel inspired and every aspect of their life and <unk>.
It starts with giving people the most inspiring content.
We continue to invest and new inspiring forms of content like story pins.
Sure and pins on Pinterest are different from stores and other platforms. They are less about what somebody else did and more about what you could do now and in the future.
Like storage and other platforms, they never disappear and they don't just show up for followers. They show for anybody looking for an idea like yours like what you need to do to get your home decorated that dinner made where that work out debt.
And Q1, we started distributing story pins more broadly throughout our creator ecosystem and we're excited about the uptake we're already seeing.
As we continue to distribute story pins pinterest will need to learn new ways to navigate and use pinterest. This could change engagement and the coming quarters, but we're confident that over time investing and new media formats like story pins 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 pinterest to take out as they see and make them real.
The number of Pinterest engaging with shopping surfaces sub interest has grown over 200% and the last year as Pinterest look to go from inspiration to purchase.
At the end of Q1 revenue from retailers with sales objectives, where 20% of total revenue and all of this shows that we're making a real traction with shopping on Pinterest.
And the 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 and Brazil, this quarter and important milestone and growing our global ads business, we expanded our shopify integration to 'twenty seven additional countries to help us further build interest 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 and our business, but it is important to note that since the pandemic began we've seen a correlation between stay at home orders and engagement on Pinterest.
Interest has always been popular for home improvement recipe collection, and less and planning and naturally many of US did more of these things during their time at home.
Which brought more people to pinterest in 2020.
As pandemic Lockdowns for east and some parts of the world. During mid March we began to see signs of less engagement and user growth on interest and we assume the same 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 per ads, while also keeping pinner privacy and mind.
This includes investments and new first party solutions and 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 with a long term impact will be.
To close I'd like to note that this past year has reinforced the importance of our mission Pinterest.
Interest is not the place to read the news, where do they politics cousin or compare yourself to other people it.
It is a positive place to be inspired and good ideas and your future life.
This is reflected in our content and our policies our efforts to combat COVID-19 vaccine mystery information.
Our nuclear code and comment moderation tools designed to keep new content formats positive and inspiring and our <unk>.
And you'd focus and engineering products could positivity with new inclusive search features like skin tone range is now available in 13 countries.
I am excited about how far we've come over a challenging year and even more excited about where we go into the future.
I'll now pass it on to Todd.
Thanks Ben.
I'll share some further details on the trends, we saw and the first quarter and provide a preliminary outlook for Q2.
Let's start with a quick summary of the headlines and then we'll go into more detail.
As Ben mentioned, we had a really strong first quarter year over year and revenue growth accelerated to 78% with adjusted EBITDA margins of 17%.
Monthly active user growth remains strong with all regions once again showing good momentum.
First quarter revenue growth was propelled by two main drivers for.
We saw strong momentum from mid market and manage small advertisers, who are increasingly finding value and our conversion focused AD products and the automation of our AD stack.
Second our international business performed really well growing a 170% year over year and the first quarter.
We're seeing the highest growth and western Europe, and Canada, where we're continuing to expand our sales coverage.
Both of these trends show and the growth and diversification of our advertiser base.
The drivers of our growth and the first quarter, including performance ads products for small and medium sized businesses.
Automation and advertiser diversification.
Probably sound familiar because we've been talking about our investment and them since our IPO a couple of years ago.
As we begin to dig into newer strategic initiatives, such as building a native content ecosystem.
I think its worth taking a minute to draw your attention to our playbook for these kinds of investments in general our philosophy is to deliver value to Pinterest first.
And then lean into scale and monetize.
This worked well for the international rollout of our ads business as well as for our shopping initiative.
For international we executed a blueprint for AD sales and the U S. Before scaling it globally, we knew the global users, we're there to support and expansion, but we got the gears working properly and the U S before leaning in.
This worked well for.
Serving ads and 29 countries today and international revenue comprised almost 20% of total revenue and the first quarter.
And we just launched and our first Latin American country, Brazil, with Mexico coming in May.
For shopping we prioritize building and organic shopping experience for printers with high quality inventory catalog uploads and discovery services before really leaning into monetization.
This strategy has also been very affected to date, though it's still relatively early days.
Not only have we dramatically scaled shopping engagement on the platform. We shared for the first time today that AD revenue from retailers and optimizing for sales on Pinterest is now a meaningful part of our financial performance.
And both are international adds rollout and and shopping we serve but pinner first by getting the fundamental infrastructure in place and only then scaling and monetizing the experience.
We're running the same playbook as we build a native content ecosystem.
And we're currently focused on delivering value to pinterest by making it easier for creators to make great content.
And learning the optimal mechanisms to distribute that content.
Very early and our journey to achieve scale or drive meaningful monetization at this point.
We're currently investing R&D and sales and marketing resources to get our content ecosystem off the ground and when we're confident that we understand how best to deliver value to printers.
Willing and harder to scale and monetize that may take the form of additional investment, but it's too early to know exactly what that looks like today.
Turning to our preliminary outlook for Q2, Ben mentioned that we have both headwinds and potential tailwind for engagement and Mou growth that may play out over the next couple of quarters.
And Q2, we expect global monthly active users to grow and the mid teens and U S monthly active users to be about flat on a year over year percentage basis.
We expect to grow revenue about 105% year over year and Q2.
As we think about the first quarter and the full year.
We believe the momentum and returns we're seeing from our investments and add tools and sales coverage expansion should continue.
Starting at the end of March we began to lap easier year ago revenue comparisons, which will continue through Q2 and is factored into our guidance.
Before opening up for questions I also want to touch on expenses.
We continue to invest and the growth of the business in accordance with our big strategic priorities of inspiring content per.
And our experience advertiser success and shopping.
And the first quarter, we grew our head count 17% year over year.
We expect our sequential non-GAAP opex growth to.
B and the mid teens on a percentage basis as we continue to ramp investments and our long term initiatives and growth drivers.
And as a reminder, we're investing and marketing campaigns to bolster comprehension and brand awareness throughout the year.
Those campaign launches in Q2, we will drive a substantial sizable increase and our variable spend.
Thank you for the teams at Pinterest, our advertising partners and all of the people that come to pinterest to find inspiration.
And with that we can open up open it up for questions.
Operator, we're ready for your first question.
And.
And that has noted sorry about that as a reminder to ask a question you will need to press star one on your telephone keypad and if for your question has been answered you May press.
Pound key to withdraw yourself from the queue flow path for just a moment to compile the Q&A roster.
Our first question comes from the line of Ross Sandler from Barclays. Your line is open.
Hey, guys just a question about the guidance so.
Obviously, we've got.
Pretty robust revenue growth year, and the second quarter.
You said.
And the U S is going to be flat and that would be a down sequential for miu. So.
And how much room do you think there is still to increase average given the massive revenue growth and the.
Sure.
And the flat user growth and can you give us any context around.
And if we look at last quarter that over the last couple of quarters.
And the tradeoff between impression growth and.
<unk> and the U S. Thanks, a lot.
Yes, thanks for thanks for the question Ross.
So.
I understand the question really about user growth and the connection to revenue saw and I'll go through a couple of things and.
And hopefully this gets to the essence of the question.
I would say sequentially.
We are unwinding some of the pulled forward user growth that we had last year and some of the engagement from the unprecedented COVID-19 period that we all went through over the last year.
Kind of and exacerbated version of the typical seasonality that we would see going into the summer for compounded by unwinding. Some of the restrictions that we had around COVID-19.
We're also it's worth, noting making as I mentioned investments and comprehension marketing and a lot of what Ben talked about around our creators and native content efforts are designed to drive long term engagement. So I don't want to leave that unintended too.
But it's really worth noting and this is this is something that I'm glad you asked about it's worth noting that our investments to more efficiently utilize our unique engagement that commercial mindset and planning behavior that pinterest bring to Pinterest, it's working.
We've made investments and product and then sales coverage as we talked last time, our vision and although over the long term is to have advertisers bring their budget their goals and their content and we automate the rest and while we have a long way to go before we get there we've made it a lot easier for advertisers to onboard scale and see results, especially.
And the SMB space.
And we did that through especially ROI accountable conversion led performance ads that generate higher potential effective CPM over time.
We saw that unfold over the course of last year through automated bidding across traffic conversion optimization and shopping objectives.
We're working on a similar automation and exercise now called campaign budget optimization, which allows for better delivery across AD groups. Instead of just within our groups. So continuing that automation theme.
And we'll launch automated bidding for awareness objectives over the course of this year too so that long term trend around automation continues.
We've accelerated further through partnerships like the one with shopify will be and expanded internationally.
We partnered all that investment and products through and improved coverage model, we focused on growing our managed SMB coverage, which is now nearly half of our revenue and you saw the results we posted internationally with opening new markets and places like Brazil, and Mexico Index.
At nearly 20% of our revenue that's up significantly as a percentage of our mix.
But what I wanted to make sure we highlight and I think this is your question.
Is that we are more efficiently using our utilizing the unique engagement that we have on pinterest and that strategy is working.
So when you boil it down to your question about AD impressions and realized pricing or effective CPM.
Our revenue growth.
And was mostly driven by effective CPM gains and the quarter.
Versus impressions, especially in our performance products.
And the thing that most stood out to me was that our AD load.
And the U S and globally.
Actually ticked down and the first quarter year over year. Despite U S revenue growing 65% and overall revenue growing 78%. So we are much more efficiently using utilizing the AD supply that we have because we've automate and we've got the right products with the right automation and ads are working.
For advertisers on the platform.
Does that get to your question, Yes, Thats Super helpful. I appreciate the color.
Yes.
Our next question comes from the line of Brian Nowak from Morgan Stanley. Your line is open.
Thanks for taking my questions I have two.
Two.
Wanted to ask the first one and sort of users and engagement as the world Reopens and sort of post shelter and I think there are some use cases on the platform around home design that could benefit from the housing market or party planning that benefit from reopening or maybe even travel where there could be a case and maybe do you could retain some of this engagement.
Talk to US about why you are not seeing that as a way to sort of retain some of these users and that engagement as the world Reopens and what do you have to invest and the sort of capitalize on that and then the second one just on <unk> and some of the the platform changes talk to US about how you think about further emphasizing on platform.
From transactions for shopping for sort of make that the advertisers better mitigate better manage through the IDF and certainty.
Sure Brian I can start off European first question is really about users and engagement and what I heard was it seems like there are a lot of core categories that could be quite resilient and how are we thinking about that post COVID-19.
So taking a step back.
Todd mentioned, a couple times debt and the way we see it is that during during COVID-19 people spend a lot more time online. They spent a lot more time.
Creating new patterns and behaviors for their stay at home life and Pinterest is the beneficiary of that.
And as thankfully more and more people spend time outside their home out there and the world.
We expect some of that language for it to go away.
That said I'd observe a few things one of which of your product.
First and a lot of the core categories, particularly the commercially strong categories things like interior design.
Fashion.
Still seeing really good resilience and we have early data indicates that engagement and those core commercial categories is going to be stickier than engagement overall, and we think that's a good thing and that's evidenced in the strength and uptake and shopping surfaces. The significant increase and the number of shopping related searches as well as what we've seen overall user behavior.
Second as you mentioned there could be certain tailwind, but we tried to communicate what we've seen for guidance than what we think and the future to your point historically certain events, whether it's Halloween holidays wedding planning they were big drivers and engagement on Contrist, we saw that go away, but the net.
Time online.
Kind of went over that during the pandemic. So there could be tailwind and we're just not baking and then.
And so all of that paints a picture, where we do expect as Todd mentioned flattish stroke and the U S. But over the long term. We think there is a lot to be optimistic about and in addition to the constant efforts that we're undertaking now we mentioned that we're going to be doing our first brand campaign and generally just improving the quality of the tenant experience over the long term.
So that's how we're kind of thinking about those pieces coming together.
Before going on and does that and answer your question.
Yes.
Perfect. Thanks.
Okay.
The second question I heard was really about IFA and what are the thoughts that we have on particularly.
Particularly shopping to help retailers get a little bit closer to pinterest when they are near that point of transaction.
So that's an overview.
This is obviously and new territory, but we've been talking about it kind of with the community for more than a year.
We put in place efforts to improve first party measurement solutions two things.
Like for shopping solutions, but more to the point. We've also really increase the amount of engagement that painters have on shopping surfaces more directly.
This year for example.
Allow pinterest users to pivot any search into a shopping search and that's significantly increased engagement and shopping surfaces and this is.
And part of our strategy all along if you rewind a couple of quarters. Our strategy was one we're going to increase the amount of high quality inventory with things like our catalog uploader, which we expanded with multi feed as well as our partnerships with folks like Shopify. He was too to make it easier for printers to get to those products and thats exemplified and increase.
And the number of shopping surfaces, as well as being able to pivot from search to shopping search.
The next step and that journey will be early pilots and testing seamless checkout and removing the friction.
It's been a sequence that we're pursuing for a while and.
And early results are really good.
Our next question comes from the line of Mark Mahaney. Your line is open.
Thanks you.
About the upcoming potential for having seamless on platform transactions. So I guess the question Todd would be does that.
Way too early but would that open the opportunity for new types of revenue models and then secondly, just the ongoing broad question about closing the <unk> GAAP between them.
And international markets and the U S market and of course, there's going to be broad and wide for a while but are there any new learnings you've had about how to get that to more in line with maybe what you see at some of the other advertising platforms that are out there is it just more sales coverage more self serve tools other new other new methods you found that can help power that.
Or close that gap somewhat more thanks a lot.
Thanks, Mark for the I heard two questions and they're the first was around new revenue models that can be associated with native checkout and the second was around how that are tried and may look over time.
And drivers.
On the new revenue model point, I think it's probably worth pausing and then going back to what some of the opening comments I had about what we endeavor to do when we make new investments.
I was really excited last year. When we said we know our users come to find inspiration and then create real action out of those inspiration and inspirational items that they get off and Pinterest and so.
And we focused on getting the right inventory of shop of products on the platform and to make those products discoverable for our users. So that was the first.
Way of addressing that desire to buy that our users expressed desire to buy what they found non pet trust.
Through all the work on catalog uploads and work on the organic product to serve more natural shopping journeys that users go through we were able to fulfill that request and so as Ben mentioned the next step might be.
Later in the year testing native checkout I would say, we're trying to make sure that the user experience works first and.
Not.
For committing at this point to any new revenue models, but over the longer term that that's something we could evaluate.
Second on the <unk> opportunity I think what I was mentioning before around all of the investments, we've made and product and and coverage.
Bringing with a long term goal of cutting advertisers, bringing their budget their goals and their content and automating the rest serving.
And the especially the SMB market and diversifying our advertiser base, allowing them to easily onboard scale and see results from their spend.
And we've had a great track record over the last year of delivering that kind of automation and we've invested and exactly the right sales coverage model and the U S and internationally to generate demand against that.
That has been the recipe for driving <unk> growth I think we posted 50%.
<unk> growth and the U S last quarter and as a result of.
All of those investments and product and coverage.
We've seen that that model works and international markets too, we're seeing great traction and as I mentioned, we're now at 20 per nearly 20% of our overall revenue from international markets through a similar playbook, it's a playbook that we.
Phil.
The first step and some of the English speaking countries outside of the U S. And then refined and western Europe, most notably in France, and Germany and are now rolling out and it's very very early days, but are now rolling out and Latin America.
We've talked historically about how pinterest come true.
Our platform with a similar mindset.
And international markets and so a lot of the international opportunity is really down to execution and I think we've got the right team in place to deliver against that over time and I'm Super encouraged by the progress we've made and the opportunity ahead.
Okay.
Thank you Todd.
Our next question comes from the line of Lloyd Walmsley from Deutsche Bank. Your line is open.
Okay. Thanks to pretty related questions I guess first on the shopping stuff and it does sound like Youre seeing a lot of growth and attributed conversions.
So beyond getting better visibility and conversions curious do you think your users are starting to engage and pinterest.
More throughout the funnel and closer to the point of purchase such that you can get more credit for this engagement and you have and the path beyond simply more visibility into into conversions and then the second one.
As you look beyond maybe simple AD impressions to growth and kind of commercial actions you talked about doubling measured conversions, but but do you see long term runway to kind of keep growing high intent actions on the platform.
And beyond simply impressions.
And whether thats clinics or checkout.
Still a ton of runway there to drive monetization without really depending on pure.
Pure price kind of anything you can share there would be great.
And I can I can start with the first part and then and maybe Todd can kind of add more to the second one the question as I understood. It was.
And do we feel that.
Users on the platform are really going through more of the funnel Hussein pinterest increasingly as the destination to shop.
And the answer to that and short is yes. So if we rewind a little bit and think about kind of where our strategy wise a couple of years ago. We knew there was a lot of commercial intent on the platform.
A major pain point for Pinterest, they werent able to get to the product and then to make it purchase upon an easy way and.
So the first thing that we really worked on was increasing that amount of shop inventory and.
And as mentioned before.
Things like the increase and the number of catalog uploads.
14 X and the last 12 trailing months.
Is it really improve the quality of the inventory.
The next step then was to begin showing users when they were on a piece of content they could find high quality products and with up to date metadata.
And that's been sort of the second leg of the stool.
So increasingly if he use pinterest.
When you see a product youll find that there is up to date pricing information and stock information and Thats, a continuous improvement and quality.
Over the last quarter and a half I would say, where we've seen real traction is and beginning to let users pivot from what we might call inspiration mode into shopping mode by engaging and shopping only surfaces.
Some of those surfaces are pivots off things like search and others are looking underneath a large image pen and then being able to go interest fee related products connected either by a similar look similar brand or similar price point.
We think that engagement with those surfaces as indicative of higher shopping intent and we notice.
Strong purchasing behavior off of those surfaces.
So now that those foundational pieces are laid the next thing we want to test is removing friction from the transaction and that's something again that will pilot as Todd mentioned and try to get the experience really good.
And then begin to roll it out more broadly.
I think the short answer is yes. The longer answer is that's the journey. We're on it's not going to be a flip the switch, but we are hearing from pinterest, and we're seeing and engagement and shopping surfaces were seeing and the growth and attributable conversions that centers are increasingly seeing it as a place where they can not only get inspired but they can also buy.
And the only thing I would really add to that I think that's a good summary of the day user experiences and we are building toward but Hasnt Advertiser you can.
And imagine that maps that user journey maps really well to advertising objectives, ranging from awareness to consideration to purchase and one of the things that we hear when we talk to CMO is and the value of Pinterest is a full funnel advertising experience across all of those objectives.
But is attributed conversions and purchase activity has increased that was the reason we called out.
And the stat about 20% of our revenue coming from retailers with conversion objectives, because it's an important trend.
A lot of our early business was built around awareness and consideration objectives or traffic baseline.
But what we've seen recently.
And that.
Shopping ads or catalog based ads, coupled with conversion optima.
Amortization adds with <unk>.
Check out or add to current objectives are now for the retail community are now 20% of our overall revenue and that seems like a mouthful, but it's designed to show exactly what Ben described the user experience is more lower funnel.
And we're increasingly taking our users from inspiration to action through that purchase journey, and it's showing up and our and our advertising results.
Alright, thank you.
Our next question comes from the line of Justin Post from <unk>. Your line is open.
Great. Thank you and maybe one for Ben and one for Todd.
And in the U S market and more mature European markets. How do you think about driving user growth over the next two years and things like shopping that can attract a little bit different audience or categories like travel or autos that you think could really take off and any signs that encourage you and then Todd could you.
You revisit the expense guidance I'm, assuming it excludes the charitable contribution does that include cost of goods sold could you just revisit the quarter over quarter expense guidance. Thank you.
Thanks for the question Justin what I heard was in more mature markets, where do we see growth coming from.
And so we've said over the last few quarters that there is a sustained trend, particularly gen Z users engaging with interest more and more.
I think that's pretty interesting because historically pinterest.
Interest and attracted a lot of millennials and the folks that were a little bit older and there was a question Mark on weather Gen Z.
And users who have a strong interest and socializing with their friends are also interested in investing and time to get creative ideas for themselves or index.
All other hobbies and interests and I think that what we've seen is the answer to that is a resounding yes. While there are some category overlaps. There also category differences, we see this as a group of users that loves fashion, They love exploring their creativity and Theyre looking now more and more into things like food and this is a group that's not yet.
Really looking into decorating and so it kind of reflects the same spirit interest is about but at a different stage of life and we see a lot of growth opportunity there.
Pass that.
We do see two big opportunities to just improve the quality of the experience both the utility and how inspirational and as I.
Spoke a little bit about.
Story and this is a new media format and we're talking about it as new but it really follows the trend that we and.
And <unk> on for a while and talking about of moving from just imagery.
Videos and then the interactive videos so for the last couple of quarters, and we talk to has been enormous increase and the amount of video consumption and thats reflected in the amount of time people are spending watching videos and it's reflected in a disproportionate contribution to AD revenue.
That story pins are the next step and that evolution. So letting people have a closed loop, where they can publish directly onto the platform. They can engage users not about entertainment, but about their interest and those users can contribute back and can build more of a community around that and media.
We think that's something that's different it's not really a need that's met and the market and the same way. The pictures is approaching it and so while we don't forecast that and to growth because it's early days, we think long term, it's something that's going to really improve the growth and the cash.
Engage from the platform.
And Justin on the on the expense side.
Break that down a little bit I think theres a question and they are about the charitable contribution and how that would be treated and then how we're thinking about opex versus cost of revenue.
As a reminder, cost of revenue scales with our user growth and product complexity. So that that's more tied to our.
And our user growth forecast and tends to be.
Disconnected from from revenue performance, that's much more seasonal than our user growth.
And I was referring to was non-GAAP opex growth we've excluded the charitable contribution from that we included in our GAAP results, but excluded from <unk>.
Non-GAAP and order to provide more clarity around the trends and the operating investments, we're making and the business. So when we talked about mid teens growth sequentially and Opex I was referring to non-GAAP opex.
Dripping out the impact of the $20 million charitable contribution that we reported last quarter.
What that reflects is it reflects an increase from the year over year growth rate and head count from where we were last quarter at 17% and then.
We're going to as we mentioned start to rollout comprehension marketing campaigns for the first time later in Q2.
Great. Thanks, Scott and thanks Ben.
Our next question comes from the line of Rich Greenfield from light shed.
<unk> Your line is open.
Hi, Thanks for taking the question I got too.
And I think when you were talking earlier about story pins and opening it up to more creators curious could you give us a sense. If you were looking at sort of end of Q1, or even where you are today versus where you were in Q4.
How many people are now have story pins available to them and what is it doing like can you give us any sense of like.
As users are engaging with story and what it.
It means to either time spent and monetization or both and then sort of just a bigger picture for for both you and Todd.
As you think about sort of connecting brands with creators.
And really giving creators more of a way to be on the platform and to create unique content.
Wondering as you look at sort of the AD units Youre seeing were seeing more and more video throughout interest, but a lot of them are sort of what I would call video ads you could see elsewhere and the Internet. How do you start to begin to get that brand to actually work with kind of native pinterest creators. So that AD units feel more natively pinterest and something really unique.
For Pinterest.
Versus just video that could be anywhere be curious of your thoughts on both of those.
Yes. Thanks for the question rich so the first part of your question is kind of where are we in the rollout of story pins on the creative side and on the audience side and what do we know about its impact on things like time spent and monetization.
And briefly we're still in pretty early days.
So the.
The number of stores and this has increased substantially from across Q1, and roughly doubled quarter over quarter, but it was off a small base and just to give a little bit of visibility. We've started small and we're expanding slowly for two reasons.
First is that a lot of what Pinterest brand is anchored in his positivity and so we wanted to set a really high bar for the content and safety and set the tone for what the platform is so when you look at.
Things like the creator code, which was our norm and guidelines for what kind of content creators have to agree to before they publish content.
Moving to the examples of the types of story pins that we're promoting and talking about.
They are really trying to set the tone for the future and that tone is around positivity, but it's also around action ability and small ideas that might be used again, and again things like for making head breakfasts or how to reorganize your kitchen and things that can actually build a library of useful content.
The second reason that we started a little bit smaller although we're now preparing to expand that more broadly is that we're really trying to build a new supply and demand marketplace inside of interest. So today. When you use pinterest, we recommend content and we have done so for years and without the need to follow.
Subscribe to anyone and we take a look at what you pay and what you've saved and we recommend thanks to you and the future and that's a pretty optimized system.
And with <unk>, we're taking a small group of high quality creators and we're asking them to publish and and we're teaching users how to follow so they see more so I think it's a little bit too early to say with confidence exactly what we're seeing and time spent and monetization.
Said.
We are doing it because we think it's going to make the service more engaging and what you saw over the long term, we think theres good market precedent for that and we really are encouraged by the early signs I just don't want to too early to come out and how people kind of modeling based on such an early set of data.
I think the second question really was about how does that translate into more David AD experiences and I'll, let I'll, let todd sort of add anything to it but we're already seeing examples of where brands and creators are teaming up to create a really authentic and inspiring image.
One example sales.
Toyota who partner with creators to show the types of people that have minivan minivans and how they fit into their lives and kind of paint a really realistic picture versus kind of veneers.
And kind of entertainment.
Entertainment based picture that they might be able to experience and other platforms and the response from Toyota and everybody managers was really great in terms of brand perception and favorability and consideration and so that's an example, we provided some other examples and our last earnings call, but we do think there's a great opportunity.
Both by kind of matching people up in the market.
And then by building, new tools, which may elect creators more directly share products and services, they love and with their audiences.
Okay.
Are those things that you would expect to rollout and throughout 'twenty, one and those types of tools you are talking about.
I think that Youll see.
Different ways for traders to.
Engage directly with with Pinterest throughout the year.
Yeah.
Thank you.
Your next question comes from the line of Douglas Anmuth from Jpmorgan. Your line is open.
Thanks for taking the question.
I just wanted to revisit some of your earlier comments just from the U S.
You talked about and maybe more in mid March just the easing of restrictions how you saw slower U S growth and lowered engagement.
Just curious there did that reflected as well in terms of U S revenue growth or what is your point in losses earlier question just that.
It's fairly disconnected revenue growth is fairly disconnected right now from users and engagement just given the higher pricing that you're seeing thanks.
Yes.
I understand the question.
We talked about them as being fairly different phenomenon I think we had a little bit of unwinding toward the end of March as people started to go outside from a monthly active user and engagement perspective, but.
Ben spoke before a lot of our shopping oriented engagement was very resilient so that and.
And I don't want that to be.
We are.
Misunderstood we've had.
Remarkable increase and.
The number of printers engaging with shopping surfaces product searches were up 20 fold and so that's something not to.
For the Smiths and <unk>.
Doubled our attributed conversions and the quarter as well, which speaks to some of that lower funnel behavior.
But given the upside we have in terms of our product investments all the automation work we've done.
The upside and our sales coverage and diversifying into the mid market.
And in addition internationally continuing to rollout that has been a lot of upside. So we were actually I think we are.
It ended up increasing our AD impressions and <unk>.
92% globally, and the quarter and our effective CPM or realized pricing was up 46% just to give you a sense globally and how that happened and our AD load was actually down.
On a year over year basis, and the U S and globally, which is a pretty interesting fact to consider when you think about that question for you pause.
Okay. That's helpful and just a follow up and I would suggest obviously higher ROI, but I guess are you seeing.
And the increases in auction density.
<unk> been looking for as you built out the number of advertisers on the platform.
We are definitely seeing benefits from advertiser diversification and a number of ways I think it starts Doug with one other things we've talked about for the last couple of years.
We really want ads to feel increasingly like content to our users because of the mindset that they bring and by diversifying our advertiser base across verticals and into the mid market, we have been increasingly able to do that.
And so I.
I think thats kind of where it starts but we've also seen benefits when it comes to auction density, but I would point again to more efficient use of our monetize the whole supply built against that.
Commercial mindset and planning behavior that our users bring that's the biggest driver of outperformance.
Got it okay. Thank you.
This will be our last question.
Colin Sebastian from Baird. Your line is open.
Great. Thanks have a couple of questions as well.
I guess first off I was hoping you could expand a bit on the growth and the Gen Z and the platform their activity, which you've highlighted a couple of times and the call.
And if there's any context additional context around how much that group now represents of uses or activity or where are you seeing as an offset less engagements, which cohorts for which which which generations and then.
Outside of your comments on recent user trends I just wanted to follow up on advertiser activity I think Todd Youre, making the point that you are seeing strong growth or engagement with advertisers in spite of some of the sequential trends and users and I just wanted to clarify that because I know that question has been coming up.
Sure Colin so starting with Gen Z.
<unk> mentioned for a few quarters and the ROE that we are seeing continued growth.
And theyre growing part of our user base, but we're far from being penetrated entirely.
They do have slightly different interest category has been our historical user base. So there's overrepresentation of interest and art Entertainment women's fashion, and there's less of a pronounced interest and things like home decor.
And they tend to be more engaged with native content relative to our historical cohorts and things like video and there is some of the early adopters of products like storytellers they tend to have a higher activation rates and.
At a higher retention rate.
So those are a few of the trends that we're observing and with that group of users. We haven't yet started building features for cater to them specifically, but we're excited to see.
And how they use the platform learn how we can serve them better while still making sure that were consistent with our overall mission.
And bring people inspiration to create a lifetime losses.
And then Colin on the Advertiser activity I'll try again on this one maybe you can have a different perspective our angle.
Its probably I don't know if other questions really around.
And the 78% growth we posted this quarter versus 70, I think it was six and Q4.
With a slightly easier and a quarter comp.
But it's worth remembering where we were in Q4, we had a longer shopping season. It was started earlier and ended longer sales.
A big shopping season for US and then we had.
Unusually strong election year driven.
Social media avoidance on other platforms that we benefited from that receded, a bit and Q1, but.
I thought our performance was exceptionally strong on a global basis and the team executed really well across product and go to market and where we're seeing that in terms of one way of thinking about it in terms of advertiser activity is that our number of joint business partnerships, which are.
Indications of intend to spend the number of joint business partners partnerships doubled year to date versus last year. So that's a that's an indicator of how we're thinking about the advertiser demand does that help.
Yes. It does help I think the question is also related to user trends are flattening sequentially or down sequentially.
Is there a risk that advertisers will follow that sort of looking out versus what their activity is right now.
Well I think if you look back over the last couple of years, we've been on a steady upward trend. We I think we grew.
And you strip away the impact from what we think will probably some pulled forward users last year into the COVID-19 period.
We're still up north of 6% and the U S compounded over the last couple of years, and so that and thats been relatively.
Consistent with the longer term trend in terms of users and I think the investments, we're making and.
The shopping experience and a more compelling user experience and these new.
Alright, thanks, guys.
Thanks.
Yeah.
I think that ends our call for today and that was our last question and so we're ready to close it out. Thanks, so much everyone and I'll see you next quarter.
Thanks again to all of you for joining the call and for your questions and we will keep the dialogue going until then and we just hope everyone stays safe and it takes care of themselves and the rest of your day.
Yes.
Thank you again for participating this concludes today's conference call you may now disconnect.
[music].
Okay.