Q2 2024 Pinterest Inc Earnings Call

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Unknown Executive: Hello, everyone. Thank you for attending today's Pinterest second quarter 2024 earnings call.

Sierra: Hello, everyone. Thank you for attending today's Pinterest second quarter 2024 earnings call. My name is Sierra, and I will be your moderator for today.

Speaker Change: Hello everyone. Thank you for attending today's Pinterest second quarter 2024 earnings call.

Unknown Executive: My name is Sierra, and I will be your moderator for today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, press star one on your telephone keypad.

Sierra: All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, press star 1 on your telephone keypad. I would now like to pass the conference over to our host, Andrew Sonberg, Vice President of Investor Relations and Treasures. Please proceed. Good afternoon, and thank you for joining us. Welcome to the Pinterest earnings call for the second quarter ended June 30, 2024. My name is Andrew Somberg, and I'm Vice President of Investor Relations and Treasury for Pinterest.

Sierra: My name is Sierra and I will be your moderator for today.

Sierra: All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, press star 1 on your telephone keypad. I would now like to pass the conference over to our host, Andrew Sonberg, Vice President of Investor Relations and Treasury.

Andrew Saunberg: I would like to pass a conference over to our hosts, Andrew Saunberg, Vice President of Investor Relations and Treasury. Please proceed. Good afternoon, and thank you for joining us.

Speaker Change: Please proceed.

Andrew Saunberg: Welcome to Pinterest earnings call for the second quarter and in June 30th, 2024. My name is Andrew Saunberg, and I'm Vice President of Investor Relations and Treasury for Pinterest. Joining me on today's call are Bill Ready, Pinterest CEO, and Julia Donnelly, 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.com. Pinterest Inc. com to find today's presentation, webcast, and earnings press release.

Andrew Sonberg: Good afternoon, and thank you for joining us.

Speaker Change: Welcome to Pinterest Earnings Call for the second quarter ended June 30th, 2024.

Andrew Somberg: My name is Andrew Somberg, and I'm Vice President of Investor Relations and Treasury for Pinterest. Joining me on today's call are Bill Ready, Pinterest CEO , and Julia Donnelly, our CFO .

Sierra: Joining me on today's call are Bill Ready, 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.pinterestinc.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 risks and uncertainties that could cause actual results to differ materially.

Andrew Somberg: 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.pinterestinc.com to find today's presentation, webcast, and earnings press release.

Andrew Saunberg: Some of the statements that we make today regarding our performance, operations, and outlook may be considered forward-looking. In 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 Q3 2024 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 display any duty or obligation to update them unless, later, unless required by law. For more information about risks, uncertainties, and other factors that could affect our results, please refer to our most recent Form 10-Q or Form 10-K filed with the SEC and available on our Investor Relations website.

Speaker Change: 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 risks and uncertainties that could cause actual results to differ materially.

Andrew Sonberg: In addition, our results, trends, and outlook for Q3 2024 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 risks, uncertainties, and other factors that could affect our results, please refer to our most recent Form 10-Q or Form 10-K filed with the SEC and available on our Investor Relations website.

Andrew Somberg: In addition, our results, trends, and outlook for Q3 2024 and beyond are preliminary and are not an assurance of future performance.

Andrew Somberg: 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.

Andrew Somberg: For more information about risks, uncertainties, and other factors that could affect our results, please refer to our most recent Form 10-Q or Form 10-K filed with the SEC and available on our Investor Relations website.

Andrew Saunberg: During this call, we will present both GAP and non-GAP 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 on our Investor Relations website.

Andrew Sonberg: 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.

Andrew Somberg: 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.

Andrew Saunberg: Lastly, all growth rates discussed in today's paper marks should be considered year-over-year unless otherwise specified, and now up to another call over to Bill.

Andrew Somberg: 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.

Bill Ready: Thank you, Andrew. Good afternoon, and thank you for joining our second quarter 2024 earnings call. Q2 marked another strong quarter of growth in users and revenue, driven by continued progress against our strategic initiatives. On the user side, we're leading into what our users love most about Pinterest: the ability to find inspiration and take action seamlessly in one platform. And, as we said before, we found our best product market fit in years. Q2 global MAUs reached another record high of 522 million, growing 12% year over year. On the monetization side, our investments to become a true full funnel platform, particularly our efforts to build out our lower funnel offerings, are paying off with Q2 revenue of 854 million, up 21% year over year.

William J. Ready: Thanks, Andrew. Good afternoon, and thank you for joining our second quarter 2024 earnings call. Q2 marked another strong quarter of growth in users and revenue, driven by continued progress against our strategic initiatives. On the user side, we're leaning into what our users love most about Pinterest, the ability to find inspiration and take action seamlessly on one platform. And as we said before, we found our best product-market fit in years. In Q2, global MAUs reached another record high of 522 million, growing 12% year over year.

Bill: Thanks, Andrew. Good afternoon, and thank you for joining our second quarter 2024 earnings call.

Bill: Q2 marked another strong quarter of growth in users and revenue, driven by continued progress against our strategic initiatives.

Bill: On the user side, we're leaning into what our users love most about Pinterest, the ability to find inspiration and take action seamlessly in one platform. And as we said before, we found our best product market fit in years.

Bill: Q2 Global MAUs reached another record high of 522 million, growing 12% year-over-year.

William J. Ready: On the monetization side, our investments to become a true full funnel platform, particularly our efforts to build out our lower funnel offerings, are paying off with Q2 revenue of $854 million, up 21% year over year. We also continue to drive significant improvements in profitability, resulting in Q2 adjusted EBITDA of $180 million, or a 21% margin, up 600 basis points versus Q2 last year. Before I dive into my usual business update, I wanted to start with a few anecdotes from my time last month at Cannes Lions, one of the largest advertising industry events of the year, as it reflects the momentum building around Pinterest. Advertisers are taking note of Gen Z's love for Pinterest and are increasingly understanding how they can meet this audience on our platform across their inspiration to action journey.

Bill: On the monetization side, our investments to become a true full funnel platform, particularly our efforts to build out our lower funnel offerings, are paying off with Q2 revenue of $854 million, up 21% year over year.

Bill Ready: We also continue to drive significant improvements and profitability, resulting in Q2 adjusted EBITDA of 180 million, or a 21% margin, up 600 basis points versus Q2 last year.

Bill: We also continue to drive significant improvements in profitability, resulting in Q2 adjusted EBITDA of $180 million, or a 21% margin, up 600 basis points versus Q2 last year.

Bill Ready: Before I dive into my usual business update, I wanted to start with a few anecdotes from my time last month at Can Lions, one of the largest advertising industry events of the year, as we flex to momentum building around Pinterest. Advertisers are taking note of Gen Z's love for Pinterest and are increasingly understanding how they can meet this audience on our platform across their inspiration to action journey. They're also seeing firsthand how our investments in the lower funnel are driving tangible success through our increased clicks and conversions. And this momentum was evident at Cannes as we saw a 50% increase in the number of visits to our activation this year and a 40% increase in the number of advertisers we met with at this important event.

William J. Ready: They're also seeing firsthand how our investments in the lower funnel are driving tangible success through increased clicks and conversions. And this momentum was evident at CAN, as we saw a 50% increase in the number of visits to our activation this year and a 40% increase in the number of advertisers we met with at this important event. While at CAN, we created an immersive activation experience where attendees could discover user behavior on Pinterest firsthand.

Bill: Before I dive into my usual business update, I wanted to start with a few anecdotes from my time last month at Cannes Lions, one of the largest advertising industry events of the year, as it reflects the momentum building around Pinterest.

Bill: Advertisers are taking note of Gen Z love for Pinterest and are increasingly understanding how they can meet this audience on our platform across their inspiration to action journey.

Bill: They're also seeing firsthand how our investments in the lower funnel are driving tangible success through our increased clicks and conversions.

Bill: And this momentum was evident at CAN, as we saw a 50% increase in the number of visits to our activation this year, and a 40% increase in the number of advertisers we met with at this important event.

Bill Ready: While it can, we created an immersive activation experience where attendees could discover user behavior on Pinterest firsthand and what one CEO said felt like stepping into a real-life inspiration board. We created a space where attendees, many of whom were Gen Z, could take a break from talking and hearing about creativity and actually be creative with Pinterest. We also previewed our latest AI and automation tools to drive even more performance for our advertisers through the launch of Performance Plus, which was very well received. I'll discuss more about Performance Plus later in my remarks.

William J. Ready: And what one CEO said felt like stepping into a real life inspiration board. We created a space where attendees, many of whom were Gen Z, could take a break from talking and hearing about creativity and actually be creative with Pinterest.

Bill: While at CAN, we created an immersive activation experience where attendees could discover user behavior on Pinterest first hand, and what one CEO said felt like stepping into a real life inspiration board.

Bill: We created a space where attendees, many of whom were Gen Z, could take a break from talking and hearing about creativity and actually be creative with Pinterest.

William J. Ready: We also previewed our latest AI and automation tools to drive even more performance for our advertisers through the launch of Performance Plus, which was very well received. I'll discuss more about Performance Plus later in my remarks. Shifting now to our quarterly update, beginning with users and engagement. Last quarter, we reviewed the initiatives over the last two years that have taken us from declining users to sustained user growth. These initiatives are one, utilizing AI to drive increased relevance and personalization; doubling down on curation through boards and collages to help users navigate their inspiration to action journey; and three, increasing actionability, particularly for shopping, allowing our users to bring their inspiration to life. And four, creating a more positive alternative to traditional social media.

Speaker Change: We also previewed our latest AI and automation tools to drive even more performance for our advertisers through the launch of Performance Plus, which was very well received. I'll discuss more about Performance Plus later in my remarks.

Bill Ready: Shifting now to our quarterly update, beginning with users and engagement. Last quarter, we reviewed the initiatives over the last two years that have taken us from declining users to sustained user growth. These initiatives are one, utilizing AI to drive increased relevance and personalization; two, doubling down on curation through boards and collages to help users navigate their inspiration to action journey; three, increasing action ability, particularly for shopping, allowing our users to bring their inspiration to life; and four, creating a more positive alternative to traditional social media. When combined, these initiatives have had compounding effects and have led to the healthy MAU growth we're seeing today across all geographic regions and the age cohorts we track.

Speaker Change: Shifting now to our quarterly update, beginning with users and engagement.

Speaker Change: Last quarter, we reviewed the initiatives over the last two years that have taken us from declining users to sustained user growth.

Speaker Change: These initiatives are 1. Utilizing AI to drive increased relevance and personalization. 2. Doubling down on curation through boards and collages to help users navigate their inspiration to action journey.

Speaker Change: 3. Increasing actionability, particularly for shopping, allowing our users to bring their inspiration to life. And 4. Creating a more positive alternative to traditional social media.

William J. Ready: When combined, these initiatives have had compounding effects and have led to the healthy MAU growth we're seeing today across all geographic regions and the age cohorts we track. Now, I'll share more about the key recent product launches that demonstrate continued progress against our strategy and the initiatives that I've outlined. First, we're helping our users more effectively find inspiration and discover new relevant content that resonates with their interests through our investments in AI.

Speaker Change: When combined, these initiatives have had compounding effects and have led to the healthy MAU growth we're seeing today across all geographic regions and the age cohorts we track.

Bill Ready: Now, I'll share more about the key recent product launches that demonstrate continued progress against our strategy and the initiatives I've outlined. First, we're helping our users more effectively find inspiration and discover new, relevant content that resonates with their interests through our investments in AI. We've made ongoing progress to modernize the core AI that powers the content users are shown, leading to meaningful improvements to the relevance and personalization of our content recommendations. As an example, in Q2, we upgraded our search ranking algorithm to incorporate new signals, enabling us to recommend more relevant and ultimately engaging content for the user.

Speaker Change: Now I'll share more about the key recent product launches that demonstrate continued progress against our strategy and the initiatives that I've outlined. First, we're helping our users more effectively find inspiration and discover new relevant content that resonates with their interests through our investments in AI.

William J. Ready: We've made ongoing progress to modernize the core AI, the powers, and the content users are shown, leading to meaningful improvements to the relevance and personalization of our content recommendations. As an example, in Q2, we upgraded our search ranking algorithm to incorporate new signals, enabling us to recommend more relevant and ultimately engaging content for the user. This resulted in a significant increase in our global search fulfillment rate, which means our users are finding more of what they're looking for when they search on Pinterest.

Speaker Change: We've made ongoing progress to modernize the core AI that powers the content users are shown, leading to meaningful improvements to the relevance and personalization of our content recommendations.

Speaker Change: As an example, in Q2, we upgraded our search ranking algorithm to incorporate new signals enabling us to recommend more relevant and ultimately engaging content for the user.

Bill Ready: This resulted in a significant increase in our global search fulfillment rate, which means our users are finding more of what they're looking for when they search on Pinterest. A part of our efforts to improve content discovery is to help users refine their searches, which often start as short, broad queries as users come to us with a general sense of what they're looking for, but don't have the precise words to describe it, or we'll know it when they see it. We're continuing to invest in bolstering content discovery through genitive AI-based guided search, which we first rolled out several months ago for the home decor vertical.

Speaker Change: This resulted in a significant increase in our global search fulfillment rate, which means our users are finding more of what they're looking for when they search on Pinterest.

William J. Ready: A part of our efforts to improve content discovery is to help users refine their searches, which often start as short, broad queries as users come to us with a general sense of what they're looking for, but don't have the precise words to describe it or will know it when they see it.

Speaker Change: A part of our efforts to improve content discovery is to help users refine their searches, which often start as short, broad queries as users come to us with a general sense of what they're looking for, but don't have the precise words to describe it or will know it when they see it.

William J. Ready: We've, and we're continuing to invest in bolstering content discovery through generative AI-based guided search, which we first rolled out several months ago for the home decor vertical. Guided search provides a structured way to break down these broad queries and narrower avenues of exploration. For example, a search for a broad query like kitchen ideas might lead a user to more refined options like DIY kitchen projects or backsplash inspiration to further explore their taste and move down the inspiration to action journey.

Speaker Change: We're continuing to invest in bolstering content discovery through generative AI-based guided search, which we first rolled out several months ago for the Home Decor Vertical.

Bill Ready: Guided search provides a structured way to break down these broad queries into narrower avenues of exploration. For example, a search for a broad query-like kitchen ideas might lead a user to more refined options like DIY kitchen projects or backsplash inspiration to further explore their taste and move down the inspiration to action journey. We're finding a notably strong product user fit for guided search with our more episodic users who are generally less familiar with the platform and do find value in the structured experience to discover fulfilling results.

Speaker Change: Guided search provides a structured way to break down these broad queries and the narrower avenues of exploration.

Speaker Change: For example, a search for a broad query like kitchen ideas might lead a user to more refined options like DIY kitchen projects or backsplash inspiration to further explore their taste and move down the inspiration to action journey.

William J. Ready: We're finding a notably strong product user fit for guided search with our more episodic users who are generally less familiar with the platform and thus find value in the structured experience to discover fulfilling results. Second, we're leaning into curation, a key differentiating feature of Pinterest and one that users leverage as a pivotal step to navigate their journey from inspiration to action. Said simply, it's how they refine their choices and decide what to buy.

Speaker Change: We're finding a notably strong product user fit for guided search with our more episodic users who are generally less familiar with the platform and thus find value in the structured experience to discover fulfilling results.

Bill Ready: Second, we're leading into curation, a key differentiating feature of Pinterest and one that users leverage as a pivotal step to navigate their journey from inspiration to action. Said simply, it's how they refine their choices and decide what to buy. Human curation on the platform bolsters our content flywheel, providing rich first-party signals early in customer shopping journeys. These signals are predictive of user interest and allow us to drive even more relevance to users via enhanced content recommendations. We've been reinvesting and making the curation journey on Pinterest easier to use and more engaging for our users through updates to boards and through our new content format, collages.

Speaker Change: Second, we're leaning into curation, a key differentiating feature of Pinterest, and one that users leverage as a pivotal step to navigate their journey from inspiration to action. Said simply, it's how they refine their choices and decide what to buy.

William J. Ready: Human curation on the platform bolsters our content flywheel, providing rich first-party signals early in customer shopping journeys. These signals are predictive of user interests and allow us to drive even more relevance to users via enhanced content recommendations. We've been reinvesting and making the curation journey on Pinterest easier to use and more engaging for our users through updates to boards and through our new content format, collages. On the board side, it's more intuitive to create, save to, and share boards than ever.

Speaker Change: Human curation on the platform bolsters our content flywheel, providing rich first-party signals early in customer shopping journeys. These signals are predictive of user interests and allow us to drive even more relevance to users via enhanced content recommendations.

Speaker Change: We've been reinvesting in making the curation journey on Pinterest easier to use and more engaging for our users through updates to boards and through our new content format, collages.

Bill Ready: On the board side, it's more intuitive to create, save to, and share boards than ever. With the refined user interface and new features like auto organization that utilizes AI to identify and automatically group together pins in the new boards, saving users the need to organize it themselves. We're also making it easier for users to share their taste and style with others. In Q2, we launched board sharing, a new feature allowing users to share engaging videos of their Pinterest boards like Dream Home Decor or Ultimate Travel Bucket List to other social platforms for the first time.

Speaker Change: On the board side, it's more intuitive to create, save to, and share boards than ever, with a refined user interface and new features like auto-organization that utilizes AI to identify and automatically group together pins into new boards, saving users the need to organize it themselves.

William J. Ready: With a refined user interface and new features like Auto Organization that utilizes AI to identify and automatically group together pins in the new board, saving users the need to organize them themselves. We're also making it easier for users to share their taste and style with others. In Q2, we launched board sharing, a new feature allowing users to share engaging videos of their Pinterest boards, like dream home decor or ultimate travel bucket list, on other social platforms for the first time.

Speaker Change: We're also making it easier for users to share their taste and style with others. In Q2, we launched Board Sharing, a new feature allowing users to share engaging videos of their Pinterest boards, like Dream Home Decor or Ultimate Travel Bucket List, to other social platforms for the first time.

Bill Ready: This feature also enabled us to include a link for others to explore their boards on a platform as well. We're also collaborating with power users like musician Abel Levine, who used board sharing to give her fans a sneak peek into the inspiration behind her tour outfits to bring this feature to life for a broader audience and showcase the magic of curation on Pinterest. We're continuing to make progress with collages, a highly interactive new content format developed using advanced computer vision technology, which allows users to cut out components like a shirt or a pair of shoes from other images and piece them together into one highly engaging and interactive pin.

William J. Ready: This feature also enables us to include a link for others to explore their boards on the platform as well. We're also collaborating with power users like musician Avril Lavigne, who used board sharing to give her fans a sneak peek into the inspiration behind her tour outfits, to bring this feature to life for a broader audience and showcase the magic of curation on Pinterest.

Speaker Change: This feature also enables us to include a link for others to explore their boards on a platform as well.

Speaker Change: We're also collaborating with power users like musician Avril Lavigne, who used board sharing to give her fans a sneak peek into the inspiration behind her tour outfits, to bring this feature to life for a broader audience and showcase the magic of curation on Pinterest.

William J. Ready: We're continuing to make progress with collages, a highly interactive new content format developed using advanced computer vision technology that allows users to cut out components like a shirt or a pair of shoes from other images and piece them together into one highly engaging and interactive pin. And as we've mentioned before, we're seeing that this content format resonates with our audience, who save collages roughly three times more often than our traditional pins, especially with our Gen Z audience, who use collages to express their personal aesthetic.

Speaker Change: We're continuing to make progress with Collages, a highly interactive new content format developed using advanced computer vision technology, which allows users to cut out components like a shirt or a pair of shoes from other images and piece them together into one highly engaging and interactive pin.

Bill Ready: And as we've mentioned before, we're seeing that this content format resonates with our audience who save collages roughly three times more often than our traditional pins, especially with our Ginsy audience who uses collages to express their personal aesthetic. In Q2, we extended collages to advertisers, meaning they can now create engaging collages using cutouts of product pins from their own catalog and promote them as ads. In fact, brands like Nike, John Lewis, and Bumble and Bumble are utilizing collages to showcase their product catalog in a unique and visually appealing way.

Speaker Change: And as we've mentioned before, we're seeing that this content format resonates with our audience, who save collages roughly three times more often than our traditional pins, especially with our Gen Z audience who uses collages to express their personal aesthetic.

William J. Ready: In Q2, we extended collages to advertisers, meaning they can now create engaging collages using cutouts of product pins from their own catalog and promote them as ads. In fact, brands like Nike, John Lewis, and Bumble and Bumble are utilizing collages to showcase their product catalog in a unique and visually appealing way.

Speaker Change: In Q2, we extended collages to advertisers, meaning they can now create engaging collages using cutouts of product pins from their own catalog and promote them as ads.

Speaker Change: In fact, brands like Nike, John Lewis, and Bumble and Bumble are utilizing collages to showcase their product catalog in a unique and visually appealing way.

Bill Ready: And finally, we're driving further actionability across Pinterest by launching features that allow users to move further along in their shopping journeys and take action on what they see. In doing so, we more than doubled the number of outbound clicks we sent to advertisers year over year for the third quarter in a row. And as we improve overall actionability and make it easier for users to find what they're looking for, we're seeing that users are able to successfully complete their journeys on Pinterest more quickly. In Q2, we ship more new filters like price, retailer, and brand on high shopping intent search queries across fashion and home decor verticals.

William J. Ready: And finally, we're driving further actionability across Pinterest by launching features that allow users to move further along in their shopping journeys and take action on what they see. In doing so, we more than doubled the number of outbound clicks we sent to advertisers year over year for the third quarter in a row. And as we improve overall actionability and make it easier for users to find what they're looking for, we're seeing that users are able to successfully complete their journeys on Pinterest more quickly.

Speaker Change: And finally, we're driving further actionability across Pinterest by launching features that allow users to move further along in their shopping journeys and take action on what they see.

Speaker Change: In doing so, we more than doubled the number of outbound clicks we sent to advertisers year over year for the third quarter in a row. And as we improve overall actionability and make it easier for users to find what they're looking for, we're seeing that users are able to successfully complete their journeys on Pinterest more quickly.

William J. Ready: In Q2, we will ship more new filters like price, retailer, and brand on high shopping intent search queries across fashion and home decor verticals. We're also experimenting with other filters, including on sale, to give users more control over their shopping journeys and find products tailored to their style and budget. And with this valuable signal, we can then recommend even more relevant and personalized shoppable content to our users. We're also making video more shoppable on the platform, as it is an integral content format on the inspiration to action journey.

Speaker Change: In Q2, we ship more new filters like price, retailer, and brand on high shopping intent search queries across fashion and home decor verticals.

Bill Ready: We're also experimenting with other filters, including on sale, to give users more control over their shopping journeys and find products tailored to their style and budget. and with this valuable signal, we can then recommend even more relevant and personalized shoppable content to our users. We're also making video more shoppable on the platform as it is an integral content format on the inspiration-to-action journey. As an example, in Q1, we launched a shop to look on video to help users shop items that bring them inspiration and the videos they were already watching. In Q2, we introduced video shopping ads to complement all the work we've been doing to drive actionability across formats and surfaces.

Speaker Change: We're also experimenting with other filters, including on sale, to give users more control over their shopping journeys and find products tailored to their style and budget. And with this valuable signal, we can then recommend even more relevant and personalized shoppable content to our users.

Speaker Change: We're also making video more shoppable on the platform, as it is an integral content format on the Inspiration to Action journey. As an example, in Q1, we launched Shop the Look on video to help users shop items that bring them inspiration in the videos they were already watching.

William J. Ready: As an example, in Q1, we launched Shop the Look on video to help users shop items that bring them inspiration in the videos they were already watching. In Q2, we introduced video shopping ads to complement all the work we've been doing to drive actionability across formats and surfaces. With video shopping ads, merchants can seamlessly add videos to their product catalogs on Pinterest and promote them.

Speaker Change: In Q2, we introduced video shopping ads to complement all the work we've been doing to drive actionability across formats and surfaces.

Bill Ready: With video shopping ads, merchants can seamlessly add videos to their product catalogs on Pinterest and promote them. Hundreds of advertisers have already started incorporating video in their product catalogs, given the strong visual nature of our platform. For mass retailers who have adopted this format, shoppable video ads drove a higher click-through rate and lower cost per action compared to static catalog ads.

Speaker Change: With video shopping ads, merchants can seamlessly add videos to their product catalogs on Pinterest and promote them. Hundreds of advertisers have already started incorporating video in their product catalogs given the strong visual nature of our platform.

William J. Ready: Hundreds of advertisers have already started incorporating video in their product catalogs, given the strong visual nature of our platform. For mass retailers who have adopted this format, shoppable video ads drove a higher click-through rate and lower cost per action compared to static catalog ads. Next, I'd like to discuss how we are improving monetization by making Pinterest more valuable and performant for advertisers. We delivered strong revenue growth in Q2, and the momentum we're driving in the business is evidence of all the work we've been doing over the last several quarters to significantly improve our ad offering, as the initiatives we outlined at our Investor Day continue to deliver as we expected or better.

Speaker Change: For mass retailers who have adopted this format, shoppable video ads drove a higher click-through rate and lower cost per action compared to static catalog ads.

Bill Ready: Next, I'd like to discuss how we are improving monetization by making Pinterest more valuable and performant for advertisers. We delivered strong revenue growth in Q2, and the momentum we're driving in the business is evidence of all the work we've been doing over the last several quarters to significantly improve our ad offering. As the initiatives we outlined at our investor day continue to deliver as we expected or better. This includes one, our investments to become a true full funnel ad platform, particularly through our new lower funnel offerings, which are creating significant value for advertisers. Two, continuing to increase ad load driven by the synergies between our users' strong commercial intent and relevant ads.

Speaker Change: Next, I'd like to discuss how we are improving monetization by making Pinterest more valuable and performant for advertisers.

Speaker Change: We delivered strong revenue growth in Q2, and the momentum we're driving in the business is evidence of all the work we've been doing over the last several quarters to significantly improve our ad offering, as the initiatives we outlined at our Investor Day continue to deliver as we expected or better.

William J. Ready: This includes, one, our investments to become a true full-funnel ad platform, particularly through our new lower-funnel offerings, which are creating significant value for advertisers. Two, continuing to increase ad load driven by the synergies between our users' strong commercial intent and relevant ads. And lastly, third-party partners, resellers, and international as additional levers to revenue growth. We're seeing advertisers take notice of the growing momentum in our business, and we're gaining share with some of the largest and most sophisticated advertisers in the world.

Speaker Change: This includes, one, our investments to become a true full funnel ad platform, particularly through our new lower funnel offerings, which are creating significant value for advertisers.

Speaker Change: Two, continuing to increase ad load driven by the synergies between our users' strong commercial intent and relevant ads. And lastly, third-party partners, resellers, and international as additional levers to revenue growth.

Bill Ready: And lastly, third party partners, resellers in international, as additional levers to revenue growth. We're seeing advertisers take notice of the growing momentum in our business, and we're gaining share with some of the largest and most sophisticated advertisers in the world.

Speaker Change: We're seeing advertisers take notice of the growing momentum in our business, and we're gaining share with some of the largest and most sophisticated advertisers in the world. As I look ahead, there's a lot more to do, but it is clear that the strategy we've employed is working.

Bill Ready: If I look ahead, there's a lot more to do, but it is clear that the strategy we've employed is working. Shifting to our full funnel ad solutions, we've been hard at work improving our offering to help advertisers meet consumers across the full funnel. Pinterest is a place where advertisers can build their brand in a positive environment, drive consideration when the consumer is not yet decided, and ultimately deliver conversions all on one platform. We see that over 90% of search queries don't specify a brand or specific product, but rather a categorical interest such as fund summer dresses or cool white sneakers or mid-century bedroom decor.

William J. Ready: As I look ahead, there's a lot more to do, but it is clear that the strategy we've employed is working. Shifting to our full funnel ad solutions, we've been hard at work improving our offering to help advertisers meet consumers across the full funnel. Pinterest is a place where advertisers can build their brand in a positive environment, drive consideration when the consumer is not yet decided, and ultimately deliver conversions, all on one platform.

William J. Ready: We see that over 90% of search queries don't specify a brand or specific product but rather a category interest, such as fun summer dresses, cool white sneakers, or mid-century bedroom decor. This is a magic moment for advertisers to connect with users who have clear commercial intent but have not yet decided what they want to buy. Many of our advertisers are taking advantage of the full funnel, with over half of our large advertisers using multiple campaign objectives. Moreover, advertisers who use upper and lower funnel objectives see two times higher conversion rates than those who use one objective alone.

Speaker Change: Shifting to our full-funnel ad solutions, we've been hard at work improving our offering to help advertisers meet consumers across the full funnel.

Speaker Change: Pinterest is a place where advertisers can build their brand in a positive environment, drive consideration when the consumer is not yet decided, and ultimately deliver conversions, all on one platform.

Speaker Change: We see that over 90% of search queries don't specify a brand or specific product, but rather a categorical interest such as fun summer dresses or cool white sneakers or mid-century bedroom decor.

Bill Ready: This is a magic moment for advertisers to connect with users who have clear commercial intent but have not yet decided what they want to buy. Many of our advertisers are taking advantage of the full funnel, with over half of our large advertisers using multiple campaign objectives. Moreover, advertisers who use upper and lower funnel objectives see two times higher conversion rates than those who use one objective alone. Within the full funnel, we've focused the majority of our monetization efforts on the lower funnel to drive performance in the form of clicks and conversions to advertisers. We've made substantial progress across our entire platform to improve actionability and allow users to shop at the point of inspiration.

Speaker Change: This is a magic moment for advertisers to connect with users who have clear commercial intent but have not yet decided what they want to buy.

Speaker Change: Many of our advertisers are taking advantage of the full funnel, with over half of our large advertisers using multiple campaign objectives. Moreover, advertisers who use upper and lower funnel objectives see two times higher conversion rates than those who use one objective alone.

William J. Ready: Within the full funnel, we focus the majority of our monetization efforts on the lower funnel to drive performance in the form of clicks and conversions to advertisers. We've made substantial progress across our entire platform to improve actionability and allow users to shop at the point of inspiration. Nowhere does this manifest more than within the lower funnel, where relevant, shoppable ads can be great content on Pinterest, and whole page optimization powered by AI allows us to show more of these relevant shoppable ads when users are in moments of high commercial intent.

Speaker Change: Within the full funnel, we focus the majority of our monetization efforts on the lower funnel to drive performance in the form of clicks and conversions to advertisers.

Speaker Change: We've made substantial progress across our entire platform to improve actionability and allow users to shop at the point of inspiration. Nowhere does this manifest more than within the lower funnel, where relevant, shoppable ads can be great content on Pinterest.

Bill Ready: Nowhere does this manifest more than within the lower funnel, where relevant shoppable ads can be great content on Pinterest. And whole page optimization powered by AI allowed us to show more of these relevant shoppable ads when users are in moments of high commercial intent. Over the last year, we've also made significant progress in making the purchase journey more seamless for our users, with products like Mobile Deplinking and Direct Links. Now, nearly 100% of our lower funnel revenue is covered by Direct Links or Mobile Deplinking, which means it takes just one click to lead the user directly to an advertiser's product or purchase page.

Speaker Change: And whole page optimization powered by AI allows us to show more of these relevant shoppable ads when users are in moments of high commercial intent.

William J. Ready: Over the last year, we've also made significant progress in making the purchase journey more seamless for our users with products like mobile deep linking and direct links. Now, nearly 100% of our lower funnel revenue is covered by direct links or mobile deep linking, which means it takes just one click to lead the user directly to an advertiser's product or purchase page. The changes we've made are having real impacts, as we've now more than doubled the amount of clicks to advertisers year over year for the third quarter in a row.

Speaker Change: Over the last year we've also made significant progress in making the purchase journey more seamless for our users with products like mobile deep linking and direct links.

Speaker Change: Now, nearly 100% of our lower funnel revenue is covered by direct links or mobile deep linking, which means it takes just one click to lead the user directly to an advertiser's product or purchase page.

Bill Ready: The changes we've made are having real impacts, as we've now more than double the amount of clicks to advertiser zero over year for the third quarter. As advertisers have begun to notice improvements in their measurement sources of truth, many of the largest, most sophisticated advertisers are voting with their dollars and driving more budget to Pinterest. We're beginning to see value capture from the next tronch of advertisers as well, and believe much of the value capture from Direct Links is still ahead of us, as advertisers continue to take note of the consistent increase in click volume we are delivering.

Speaker Change: The changes we've made are having real impacts, as we've now more than doubled the amount of clicks to advertisers year over year for the third quarter in a row.

William J. Ready: As advertisers have begun to notice improvements in their measurement sources of truth, many of the largest, most sophisticated advertisers are voting with their dollars and driving more budget to Pinterest. We're beginning to see value capture from the next tranche of advertisers as well, and believe much of the value capture from direct links is still ahead of us, as advertisers continue to take note of the consistent increase in click volume we are delivering.

Speaker Change: As advertisers have begun to notice improvements in their measurement sources of truth, many of the largest, most sophisticated advertisers are voting with their dollars and driving more budget to Pinterest.

Speaker Change: We're beginning to see value capture from the next tranche of advertisers as well, and believe much of the value capture from direct links is still ahead of us, as advertisers continue to take note of the consistent increase in click volume we are delivering.

Bill Ready: However, the pace at which advertisers adjust their budgets depends on a variety of factors, including seeing performance appear in their individual measurement sources of truth, and the level of resourcing required to implement incremental campaigns. We anticipate that, with the rollout of our new automation suite Performance Plus, which I'll discuss shortly in more detail, we'll be able to alleviate some of this heavy lifting on the advertiser side. This should drive even greater value creation through improved campaign setup and efficiency, leading to compounding performance effects through our full lower funnel solution set and ultimately further value capture.

William J. Ready: However, the pace at which advertisers adjust their budgets depends on a variety of factors, including seeing its performance appear in their individual measurement sources of truth and the level of resourcing required to implement incremental campaigns. We anticipate that with the rollout of our new automation suite, Performance Plus, which I'll discuss shortly in more detail, we'll be able to alleviate some of this heavy lifting on the advertiser side. This should drive even greater value creation through improved campaign setup and efficiency, leading to compounding performance effects through our full lower funnel solution set and ultimately further value capture.

Speaker Change: However, the pace at which advertisers adjust their budgets depends on a variety of factors, including seeing its performance appear in their individual measurement sources of truth and the level of resourcing required to implement incremental campaigns.

Speaker Change: We anticipate that with the rollout of our new automation suite, Performance Plus, which I'll discuss shortly in more detail, we'll be able to alleviate some of this heavy lifting on the advertiser side.

Speaker Change: This should drive even greater value creation through improved campaign setup and efficiency, leading to compounding performance effects through our full lower funnel solution set and ultimately further value capture.

Bill Ready: Finally, we're also continuing to drive more action ability in the lower funnel through incorporating third party ads into our auction to go relevant shoppable ad demand. As we expected, third-party ad demand became an even larger source of revenue this quarter and is continuing to fill in gaps in the auction, especially on our high-intent surfaces like search and related items, where relevant ads are additive shoppable content for our users.

William J. Ready: Finally, we're also continuing to drive more actionability in the lower funnel through incorporating third-party ads into our auction to grow relevant shoppable ad demand. As we expected, third-party ad demand became an even larger source of revenue this quarter and is continuing to fill in gaps in the auction, especially on our high-intent surfaces like search and related items, where relevant ads are additive shoppable content for our users. We know that performance is only as good as the advertiser's ability to measure it.

Speaker Change: Finally, we're also continuing to drive more actionability in the lower funnel through incorporating third-party ads into our auction to grow relevant shoppable ad demand.

Speaker Change: As we expected, third-party ad demand became an even larger source of revenue this quarter and is continuing to fill in gaps in the auction, especially on our high-intent surfaces like search and related items, where relevant ads are additive, shoppable content for our users.

Bill Ready: We know that performance is only as good as the advertiser's ability to measure it. Because of this, we're focused on driving adoption of our privacy-centric measurement tools like Conversions API and clean rooms. We've continued to grow adoption of these tools in Q2 with a sharp focus on advertisers with lower funnel shopping and conversion objectives. This adoption has been driven by a few key initiatives. First, we are easing the onboarding process for advertisers, with the goal of meeting advertisers where they are, with whichever third-party solutions they are using. As such, we revamped our developer site and continue to increase the number of third-party integration partnerships.

William J. Ready: Because of this, we're focused on driving adoption of our privacy-centric measurement tools like Conversions API and CleanRooms. We've continued to grow adoption of these tools in Q2, with a sharp focus on advertisers with lower funnel shopping and conversion objectives. This growth has been driven by a few key initiatives.

Speaker Change: We know that performance is only as good as the advertiser's ability to measure it. Because of this, we're focused on driving adoption of our privacy-centric measurement tools like Conversions API and CleanRooms.

Speaker Change: We continue to grow adoption of these tools in Q2, with a sharp focus on advertisers with lower funnel shopping and conversion objectives.

William J. Ready: First, we are easing the onboarding process for advertisers with the goal of meeting advertisers where they are with whichever third-party solutions they are using. As such, we have revamped our developer site and continue to increase the number of third-party integration partnerships. Second, we have bolstered our own seller training efforts and education to help advertisers understand how these solutions can strengthen their conversion visibility. With that, we continue to make measurement adoption a key priority for our sales force and tie a portion of seller incentive compensation to privacy-centric measurement adoption.

Speaker Change: This adoption has been driven by a few key initiatives.

Speaker Change: First, we are easing the onboarding process for advertisers, with the goal of meeting advertisers where they are, with whichever third-party solutions they are using. As such, we revamped our developer site and continue to increase the number of third-party integration partnerships.

Bill Ready: Second, we've bolstered our own seller training efforts and education to help advertisers understand how these solutions strengthen their conversion visibility. With that, we continue to make measurement adoption a key priority for our sales force and tie a portion of seller incentive compensation to privacy-centric measurement adoption. While we want advertisers to adopt our own solutions and best practices, we recognize that many of them have their own measurement source of truth. To that end, we focus our efforts on making sure we are showing up correctly and consistently wherever an advertiser measures their performance.

Speaker Change: Second, we have bolstered our own seller training efforts and education to help advertisers understand how these solutions can strengthen their conversion visibility.

Speaker Change: With that, we continue to make measurement adoption a key priority for our sales force and tie a portion of seller incentive compensation to privacy-centric measurement adoption.

William J. Ready: While we want advertisers to adopt our own solutions and best practices, we recognize that many of them have their own measurement source of truth. To that end, we have focused our efforts on making sure we are showing up correctly and consistently wherever an advertiser measures their performance. Moving to AI and automation, our work to build out our lower funnel suite continued in Q2 with the announcement of Performance Plus. This brand new offering, which recently entered beta for a limited number of advertisers, brings together all of our AI and automation tools across bidding, budgeting, and targeting to improve campaign performance on Pinterest.

Speaker Change: While we want advertisers to adopt our own solutions and best practices, we recognize that many of them have their own measurement source of truth. To that end, we focus our efforts on making sure we are showing up correctly and consistently wherever an advertiser measures their performance.

Bill Ready: Moving to AI and automation, our work to build out our lower funnel suite continued in Q2 with the announcement of Performance Plus. This brand new offering, which recently entered beta for a limited number of advertisers, brings together all of our AI and automation tools across bidding, budgeting, and targeting to improve campaign performance on Pinterest. With Performance Plus, lower funnel advertisers can use these tools in concert to unlock our most powerful automation in AI features, all within a new simplified campaign setup. Advertisers can also apply any of these features to non-performance plus campaigns, giving them the ultimate control based on their unique needs.

Speaker Change: Moving to AI and automation, our work to build out our lower funnel suite continued in Q2 with the announcement of Performance+.

Speaker Change: This brand new offering, which recently entered beta for a limited number of advertisers, brings together all of our AI and automation tools across bidding, budgeting, and targeting to improve campaign performance on Pinterest.

William J. Ready: With Performance Plus, lower funnel advertisers can use these tools in concert to unlock our most powerful automation and AI features, all within a new, simplified campaign setup. Additionally, advertisers can also apply any of these features to non-Performance Plus campaigns, giving them the ultimate control based on their unique needs. We are excited about Performance Plus as the next iteration of our lower funnel suite. As we roll out these tools, we expect a similar multi-quarter product uptake and adoption curve as our previous lower funnel launches, like shopping ads, mobile deep linking, indirect links, and conversion APIs. This suite of tools, when used together, compound upon each other to drive powerful, lower funnel performance for our advertisers. While still early, the test results have been positive.

Speaker Change: With Performance+, Lower Funnel Advertisers can use these tools in concert to unlock our most powerful automation and AI features, all within a new, simplified campaign setup.

Speaker Change: Advertisers can also apply any of these features to non-Performance Plus campaigns, giving them the ultimate control based on their unique needs.

Bill Ready: We are excited about Performance Plus as the next iteration of our lower funnel suite. As we roll out these tools, we expect a similar multi-quarter product uptake and adoption curve as our previous lower funnel launches, like shopping as mobile deep linking and direct links and conversion APIs. This suite of tools, when used together, compound upon each other to drive powerful lower funnel performance for our advertisers. While still early, the test results have been positive. Many of the advertisers who participated in our Performance Plus alpha test this spring saw a greater than 10% improvement in cost per acquisition for their lower funnel conversion and shopping ad campaigns, or a greater than 10% improvement in cost per click, CPC, for consideration campaigns.

Speaker Change: We are excited about Performance Plus as the next iteration of our Lower Funnel Suite. As we roll out these tools, we expect a similar multi-quarter product uptake and adoption curve as our previous Lower Funnel launches, like Shopping Ads, Mobile Deep Linking, Indirect Links, and Conversion APIs.

Speaker Change: This suite of tools, when used together, compound upon each other to drive powerful, lower funnel performance for our advertisers.

William J. Ready: Many of the advertisers who participated in our Performance Plus Alpha test this spring saw a greater than 10% improvement in cost per acquisition for their lower funnel conversion and shopping ad campaigns or a greater than 10% improvement in cost per click, CPC, for consideration campaigns. For example, outdoor apparel brand Timberland was an early tester of Performance Plus in the UK and saw a 34% lower cost per action, a 16% increase in click-through rate, and ultimately a 50% higher return on ad spend from their Performance Plus-enabled campaign versus their traditional campaigns.

Speaker Change: While still early, the test results have been positive.

Speaker Change: Many of the advertisers who participated in our Performance Plus Alpha test this spring saw a greater than 10% improvement in cost per acquisition for their lower funnel conversion and shopping ad campaigns, or a greater than 10% improvement in cost per click, CPC, for consideration campaigns.

Bill Ready: For example, outdoor parallel brand Timberland was an early tester of Performance Plus in the UK and saw a 34% lower cost per action, a 16% increase in click-through rate, and ultimately a 50% higher return on ad spend from their Performance Plus-enabled campaign versus their traditional campaigns. In addition, Performance Plus significantly reduces the time required for advertisers to create a campaign with 50% fewer inputs than a traditional creation flow. We are also testing additional automation solutions, which we plan to incorporate into the Performance Plus suite in the coming months. These include Performance Plus bidding for row ads, which automatically optimizes advertisers' bids to drive the highest ROI, and Performance Plus creative, which helps advertisers make new ad creative using generative AI and optimize their existing creative across multiple ad formats.

Speaker Change: For example, outdoor apparel brand Timberland was an early tester of Performance Plus in the UK.

Speaker Change: and saw a 34% lower cost per action, a 16% increase in click-through rate, and ultimately a 50% higher return on ad spend from their Performance Plus-enabled campaign versus their traditional campaigns.

William J. Ready: In addition, Performance Plus significantly reduces the time required for advertisers to create a campaign with 50% fewer inputs than a traditional creation flow. We are also testing additional automation solutions, which we plan to incorporate into the Performance Plus suite in the coming months. These include Performance Plus bidding for ROAS, which automatically optimizes advertisers' bids to drive the highest ROI, and Performance Plus Creative, which helps advertisers make new ad creative using generative AI and optimize their existing creative across multiple ad formats. Performance Plus Creative is already driving tangible results for advertisers. Fashion Marketplace Poshmark, an early test for the product, saw a 25% lift in click-through rates on products with a performance-plus-generated background versus a white background.

Speaker Change: In addition, Performance Plus significantly reduces the time required for advertisers to create a campaign, with 50% fewer inputs than a traditional creation flow. We are also testing additional automation solutions, which we plan to incorporate into the Performance Plus suite in the coming months.

Speaker Change: These include Performance Plus Bidding for ROAS, which automatically optimizes advertiser's bids to drive the highest ROI, and Performance Plus Creative, which helps advertisers make new ad creative using generative AI and optimize their existing creative across multiple ad formats.

Bill Ready: Performance Plus creative is already driving tangible results for advertisers. Fashion marketplace, Poshmark, an early test for the product saw a 25% lift in click-through rates on products with a Performance Plus generator.

Speaker Change: Performance Plus Creative is already driving tangible results for advertisers.

Speaker Change: Fashion Marketplace Poshmark, an early tester of the product, saw a 25% lift in click-through rates on products with a performance-plus-generated background versus a white background.

Bill Ready: As we continue to iterate, we will roll these features out to a broader swath of lower funnel advertisers, and we'll have more to share as we progress through the second half of the year. Overall, I'm proud of our latest automation roll out, a continuation of our efforts to deliver the best possible performance for advertisers and reduce friction in doing so. Our goal is for advertisers to be able to provide us with a budget, a goal in their seed creative, and will do the rest.

William J. Ready: As we continue to iterate, we will roll these features out to a broader swath of lower funnel advertisers, and we'll have more to share as we progress through the second half of the year. Overall, I'm proud of our latest automation rollout, a continuation of our efforts to deliver the best possible performance for advertisers and reduce friction in doing so. Our goal is for advertisers to be able to provide us with a budget, a goal, and their seed creative, and we'll do the rest. With that, I'll turn the call over to Julia to share more details about our financial performance. Thanks, Bill, and good afternoon, everyone.

Speaker Change: As we continue to iterate, we will roll these features out to a broader swath of lower funnel advertisers, and we'll have more to share as we progress through the second half of the year.

Speaker Change: Overall, I'm proud of our latest automation rollout, a continuation of our efforts to deliver the best possible performance for advertisers and reduce friction in doing so. Our goal is for advertisers to be able to provide us with a budget, a goal, and their seed creative, and we'll do the rest.

Julia Donnelly: With that, I'll turn the call over to Julia to share more details about our financial performance.

Speaker Change: With that, I'll turn the call over to Julia to share more details about our financial performance.

Julia Brau Donnelly: Today, I'll be discussing our second quarter 2024 financial results and providing an update on our preliminary third quarter 2024 outlook. All financial metrics, except for revenue, will be discussed in non-GAAP terms unless otherwise specified, and all comparisons will be discussed on a year-over-year basis unless otherwise noted. Let's dive into our second quarter results. We ended the quarter with 522 million global monthly active users, or MAUs, growing 12% and reaching another record high.

Julia Donnelly: Thanks, Bill, and good afternoon, everyone. Today I'll be discussing our second quarter, 2024 financial results and provide an update on our preliminary third quarter, 2024 outlook. All financial metrics except for revenue will be discussed in non-GAAP terms unless otherwise specified, and all comparisons will be discussed on a year-over-year basis unless otherwise noted.

Julia: Thanks, Bill, and good afternoon, everyone. Today, I'll be discussing our second quarter 2024 financial results and provide an update on our preliminary third quarter 2024 outlook.

Julia: All financial metrics, except for revenue, will be discussed in non-GAAP terms unless otherwise specified, and all comparisons will be discussed on a year-over-year basis unless otherwise noted.

Julia Donnelly: Let's dive into our second quarter results. We ended the quarter with 522 million global monthly active users, or MAUs, growing 12% and reaching another record high. Users continue to grow year over year across all of our geographic regions due to the compounding effects of the initiatives Bill mentioned earlier in his remarks, where improved personalization, curation, and actionability are driving enhanced inspiration to action journeys for users. Specifically, in Q2, in the U.S. and Canada, we had 98 million MAUs growing 3%. In Europe, we had 136 million MAUs growing 9%. And in our rest of world markets, we had 288 million MAUs, growing 17%.

Julia: Let's dive in to our second quarter results.

Julia: We ended the quarter with 522 million global monthly active users, or MAUs, growing 12% and reaching another record high.

Julia Brau Donnelly: Users continue to grow year over year across all of our geographic regions due to the compounding effects of the initiatives Bill mentioned earlier in his remarks, where improved personalization, curation, and actionability are driving enhanced inspiration to action journeys for users. Specifically, in Q2, in the U.S. and Canada, we had 98 million MAUs growing 3%. In Europe, we had 136 million MAUs growing 9%.

Speaker Change: Users continue to grow year-over-year across all of our geographic regions, due to the compounding effects of the initiatives Bill mentioned earlier in his remarks, where improved personalization, curation, and actionability are driving enhanced inspiration-to-action journeys for users.

Speaker Change: Specifically, in Q2, in the U.S. and Canada, we had 98 million MAUs growing 3%, in Europe we had 136 million MAUs growing 9%, and in our rest of world markets we had 288 million MAUs growing 17%.

Julia Brau Donnelly: And in our rest of the world markets, we had 288 million MAUs, growing 17%. Now on to revenue. In Q2, our global revenue was $854 million, up 21% on a reported and constant currency basis.

Julia Donnelly: Now onto revenue. In Q2, our global revenue was 854 million dollars, up 21% on a reported and constant currency basis. The revenue strength this quarter, which exceeded the high end of our guidance range, highlights how we are driving value for advertisers across the full funnel, with particular strengths coming from our lowest funnel conversion objective. From a vertical perspective, we once again saw broad strengths in retail. Our larger, more sophisticated advertisers continue to lean into the platform as they have adopted our lower funnel tools and are seeing continued success. We're also starting to see signs of value capture from the next tranche of advertisers, as we have doubled clicks for the third quarter in a row, and those advertisers are beginning to see that impact in their measurement sources of truth and adjusting spending accordingly.

Speaker Change: Now on to revenue. In Q2, our global revenue was $854 million, up 21% on a reported and constant currency basis.

Julia Brau Donnelly: The revenue strength this quarter, which exceeded the high end of our guidance range, highlights how we are driving value for advertisers across the full funnel, with particular strength coming from our lowest funnel conversion objective. From a vertical perspective, we once again saw broad strength in retail. Our larger, more sophisticated advertisers continue to lean into the platform as they have adopted our lower funnel tools and are seeing continued success. We're also starting to see signs of value captured from the next tranche of advertisers as we have doubled clicks for the third quarter in a row, and those advertisers are beginning to see that impact in their measurement sources of truth and adjusting spending accordingly. Additionally, emerging verticals like technology, autos, and financial services were sources of strength. However, this growth was partially offset by softness within CPG, specifically food and beverage advertisers who are navigating broader headwinds within that category.

Speaker Change: The revenue strength this quarter, which exceeded the high end of our guidance range, highlights how we are driving value for advertisers across the full funnel, with particular strength coming from our lowest funnel conversion objective.

Speaker Change: From a vertical perspective, we once again saw broad strength in retail. Our larger, more sophisticated advertisers continue to lean into the platform as they have adopted our lower funnel tools and are seeing continued success.

Speaker Change: We're also starting to see signs of value capture from the next tranche of advertisers as we have doubled clicks for the third quarter in a row, and those advertisers are beginning to see that impact in their measurement sources of truth and adjusting spending accordingly.

Julia Donnelly: Additionally, emerging verticals like technology, autos, and financial services were sources of strength. However, this growth was partially offset by softness within CPG, specifically food and beverage advertisers who are navigating broader headwinds within that category.

Speaker Change: Additionally, emerging verticals like technology, autos, and financial services were sources of strength.

Speaker Change: However, this growth was partially offset by softness within CPG, specifically food and beverage advertisers who are navigating broader headwinds within that category.

Julia Donnelly: Next, as expected, revenue from our third-party demand partnerships continued to ramp in Q2, growing sequentially off the revenue base we delivered in Q1, as it continues to complement our growing first-party business. Turning to our geographical breakouts for Q2, in the US and Canada, we generated $673 million in revenue, growing 19%. Strength came from retail and from emerging categories, including technology, autos, and financial services. In Europe, revenue was $143 million, growing 25% on both a reported and constant currency basis. Strength in Europe was driven by retail. Revenue from rest of world was $38 million, growing 32% on a reported basis, or 36% on a constant currency basis.

Julia Brau Donnelly: Next, as expected, revenue from our third-party demand partnerships continued to ramp in Q2, growing sequentially off the revenue base we delivered in Q1 as it continues to complement our growing first-party business. Turning to our geographical breakouts for Q2. In the U.S. and Canada, we generated $673 million in revenue, growing 19%. Strength came from retail and from emerging categories, including technology, autos, and financial services. In Europe, revenue was $143 million, growing 25% on both the reported and constant currency basis.

Speaker Change: Next, as expected, revenue from our third-party demand partnerships continue to ramp in Q2, growing sequentially off the revenue base we delivered in Q1 as it continues to complement our growing first-party business.

Speaker Change: Turning to our geographical breakouts for Q2. In the U.S. and Canada, we generated $673 million in revenue, growing 19%.

Speaker Change: Strength came from retail and from emerging categories including technology, autos, and financial services. In Europe , revenue was $143 million, growing 25% on both a reported and constant currency basis.

Julia Brau Donnelly: Strengthen Europe with Driven by Retail. Revenue from the rest of the world with $38 million growing 32% on a reported basis or 36% on a constant currency basis. In Q2, ad impressions grew 35% while ad pricing declined 11% year over year. These dynamics were similar to Q1, with ad impressions being driven both by increases in total impressions as well as increases in ad load. Similarly, pricing continues to be lower year over year as we continue to drive increased value to advertisers in the form of more clicks and greater efficiency.

Speaker Change: Strength in Europe was driven by retail. Revenue from rest of world was $38 million, growing 32% on a reported basis or 36% on a constant currency basis.

Julia Donnelly: In Q2, add impressions grew 35% while add pricing declined 11% year-over-year. These dynamics were similar to Q1, with add impressions being driven both by increases in total impressions, as well as increases in ad load. Similarly, pricing continues to be lower year-over-year, as we continue to drive increased value to advertisers in the form of more clicks and greater efficiency. We continue to drive increases in ad load to a whole page optimization, which increases the supply of relevant ads to users in moments of high commercial intent. And we see opportunity to increase ad load moving forward as we further improve the actionability of our users' journeys and the relevance of our ads.

Speaker Change: In Q2, ad impressions grew 35% while ad pricing declined 11% year-over-year. These dynamics were similar to Q1, with ad impressions being driven both by increases in total impressions as well as increases in ad load.

Speaker Change: Similarly, pricing continues to be lower year over year as we continue to drive increased value to advertisers in the form of more clicks and greater efficiency.

Julia Brau Donnelly: We continue to drive increases in ad load to whole page optimization, which increases the supply of relevant ads to users in moments of high commercial intent, and we see opportunity to increase ad load moving forward as we further improve the actionability of our users' journeys and the relevance of our ads. In Q2, we also saw a greater mix shift to ad impressions with lower average pricing, or eCPMs. This was influenced by two factors.

Speaker Change: We continue to drive increases in ad load through whole page optimization, which increases the supply of relevant ads to users in moments of high commercial intent, and we see opportunity to increase ad load moving forward as we further improve the actionability of our users' journeys and the relevance of our ads.

Julia Donnelly: In Q2, we also saw a greater mixed shift to add impressions with lower average pricing, or ECPMs. This was influenced by two factors. First, we started serving ads in previously unmonetized markets, mostly in our Rest of World region, many of which have lower ECPMs in our existing monetized markets. Second, on a global basis, we are seeing growth in third-party ad impressions to fill in gaps in our auction, in places that were previously undermonetized or not monetized at all. Right now, we are mainly filling these in with relevant demand from third parties, but over time, as we increase demand further, we expect to see greater auction pressure and therefore higher ECPMs for these ad folks.

Speaker Change: In Q2, we also saw a greater makeshift to add impressions with lower average pricing, or eCPMs.

Julia Brau Donnelly: First, we started serving ads in previously unmonetized markets, mostly in our Rest of World region, many of which have lower eCPMs than our existing monetized markets. And second, on a global basis, we are seeing growth in third-party ad impressions to fill in gaps in our auction in places that were previously under-monetized or not monetized at all. Right now, we are mainly filling these in with relevant demand from third parties. But over time, as we increase demand further, we expect to see greater auction pressure and, therefore, higher eCPMs for these ad flocks. Moving to expenses.

Speaker Change: This was influenced by two factors. First, we started serving ads in previously unmonetized markets, mostly in our rest of world region, many of which have lower eCPMs than our existing monetized markets.

Speaker Change: And second, on a global basis, we are seeing growth in third-party ad impressions to fill in gaps in our auction in places that were previously under-monetized or not monetized at all.

Speaker Change: Right now, we are mainly filling these in with relevant demand from third parties, but over time, as we increase demand further, we expect to see greater auction pressure and therefore higher eCPMs for these ad slots.

Julia Donnelly: Moving to expenses. For the past several quarters, we've been able to drive continued margin expansion through effective expense discipline by allocating resources towards our highest ROI initiatives. In Q2, cost revenue was $180 million, up 9% year over year, and up 2% versus Q1 due to increased infrastructure spend related to user and engagement growth and partially offset by our continued work to drive cost optimizations on our infrastructure spend. Our non-GAAP operating expense was $497 million, up 13%. The increase was primarily driven by headcount growth and R&D, increased marketing expense, and increased G&A driven by non-income-based taxes and other employee-related costs.

Julia Brau Donnelly: For the past several quarters, we've been able to drive continued margin expansion through effective expense discipline by allocating resources towards our highest ROI initiatives. In Q2, cost of revenue was $180 million, up 9% year-over-year and up 2% versus Q1, due to increased infrastructure spend related to user and engagement growth and partially offset by our continued work to drive cost optimizations on our infrastructure spend. Our non-GAAP operating expense was $497 million, up 13%.

Speaker Change: Moving to expenses.

Speaker Change: For the past several quarters, we've been able to drive continued margin expansion through effective expense discipline while allocating resources towards our highest ROI initiative.

Speaker Change: In Q2, cost of revenue was $180 million, up 9% year-over-year and up 2% versus Q1 due to increased infrastructure spend related to user and engagement growth and partially offset by our continued work to drive cost optimizations on our infrastructure spend.

Julia Brau Donnelly: The increase was primarily driven by headcount growth and R&D, increased marketing expense, and increased G&A driven by non-income-based taxes and other employee-related costs. Our revenue strength and expense discipline led to another solid quarter of adjusted EBITDA and margin expansion, coming in at $180 million with an adjusted EBITDA margin of 21%. This was up approximately 600 basis points versus Q2 last year. Finally, we ended the quarter with cash, cash equivalents, and marketable securities of $2.7 billion.

Speaker Change: Our non-GAAP operating expense was $497 million, up 13%. The increase was primarily driven by headcount growth in R&D, increased marketing expense, and increased G&A driven by non-income-based taxes and other employee-related costs.

Julia Donnelly: Our revenue strength and expense discipline led to another solid quarter of adjusted EBITDA and margin expansion, coming in at $180 million with an adjusted EBITDA margin of 21%. This was up approximately 600 basis points versus Q2 last year.

Speaker Change: Our revenue strength and expense discipline led to another solid quarter of adjusted EBITDA and margin expansion, coming in at $180 million with an adjusted EBITDA margin of 21%. This was up approximately 600 basis points versus Q2 last year.

Julia Donnelly: Finally, we ended the quarter with cash, cash equivalents, and marketable securities of $2.7 billion. In Q2, we utilized approximately $120 million of cash on net share settlement of equity awards, plus an additional $34 million on share repurchases.

Speaker Change: Finally, we ended the quarter with cash, cash equivalents, and marketable securities of $2.7 billion. In Q2, we utilized approximately $120 million of cash on net share settlement of equity awards, plus an additional $34 million on share repurchases.

Julia Donnelly: Now I'll discuss our preliminary guidance for the third quarter. We expect Q3 2020 for revenue to be in the range of $885 to $900 million, representing 16 to 18% growth year over year. Let me share some additional context as we look forward to Q3. Our revenue guidance reflects further progress against our strategic initiatives, including continued lower funnel strengths and the ongoing emerging contribution from third party demand partners. The underlying health of our business remains strong, and we continue to be excited about the opportunities ahead. However, as we move into Q3, we are facing tougher comps since our revenue growth nearly doubled from Q2 to Q3 last year.

Julia Brau Donnelly: In Q2, we utilized approximately $120 million of cash on net share settlement of equity awards, plus an additional $34 million on share repurchases. Now, I'll discuss our preliminary guidance for the third quarter. We expect Q3 2024 revenue to be in the range of $885 to $900 million, representing 16 to 18% growth year over year. Let me share some additional context as we look forward to Q3. Our revenue guidance reflects further progress against our strategic initiatives, including continued lower funnel strength and the ongoing emerging contribution from third party demand partnerships.

Speaker Change: Now I'll discuss our preliminary guidance for the third quarter. We expect Q3 2024 revenue to be in the range of $885 to $900 million, representing 16 to 18% growth year over year.

Speaker Change: Let me share some additional context as we look forward to Q3. Our revenue guidance reflects further progress against our strategic initiatives, including continued lower funnel strength and the ongoing emerging contribution from third-party demand partnerships.

Julia Brau Donnelly: The underlying health of our business remains strong, and we continue to be excited about the opportunities ahead. However, as we move into Q3, we are facing tougher comps since our revenue growth nearly doubled from Q2 to Q3 last year. It is also worth noting that at current spot rates, we are expecting the foreign exchange rate to move against us for the first time in five quarters, resulting in a one-point headwind for Q3.

Speaker Change: The underlying health of our business remains strong, and we continue to be excited about the opportunities ahead.

Speaker Change: However, as we move into Q3, we are facing tougher comps since our revenue growth nearly doubled from Q2 to Q3 last year.

Julia Donnelly: It is also worth noting that at current spot rates, we are expecting a foreign exchange to move against us for the first time in five quarters, resulting in a one-point headwind for Q3. Finally, our guidance does not assume a material improvement in trend for the food and beverage category or significant revenue contribution from the launch of Performance Plus, as we are still currently in the testing phase with a small number of advertisers.

Speaker Change: It is also worth noting that at current spot rates, we are expecting a foreign exchange to move against us for the first time in five quarters, resulting in a one-point headwind for Q3.

Julia Brau Donnelly: Finally, our guidance does not assume a material improvement in trend for the food and beverage category or a significant revenue contribution from the launch of Performance Plus, as we are still currently in the testing phase with a small number of advertisers. Turning now to our expense guidance. We expect Q3 non-gap operating expenses of $485 to $500 million, growing 17 to 20% year over year. Our operating expense guidance does not include cost of revenue.

Speaker Change: Finally, our guidance does not assume a material improvement in trend for the food and beverage category or significant revenue contribution from the launch of Performance Plus, as we are still currently in the testing phase with a small number of advertisers.

Julia Donnelly: Turning now to our expense guidance, we expect Q3 non-GAAP operating expenses of $485 to $500 million, growing 17 to 20% year over year. Our operating expense guidance does not include cost of revenue. However, we plan to realize modest additional benefits from our ongoing infrastructure optimization efforts, and therefore we anticipate Q3 non-GAAP cost of revenue expense to be relatively consistent with Q2. The increase in non-GAAP operating expense year over year is driven by investment increases in R&D, where we continue to invest in headcount for AI talent across our business. As we have said previously, for full year 2024, we are anticipating year-over-year adjusted EBITDA margin expansion, but at a more modest level than the 660 basis point expansion we delivered in 2023, as we balance investing in growth and flowing profitability through to the bottom line.

Speaker Change: Turning now to our expense guidance.

Speaker Change: We expect Q3 non-GAAP operating expenses of $485 to $500 million, growing 17 to 20% year-over-year.

Julia Brau Donnelly: However, we plan to realize modest additional benefits from our ongoing infrastructure optimization efforts, and therefore, we anticipate Q3 non-GAAP cost of revenue expense to be relatively consistent with Q2. The increase in non-GAAP operating expense year over year is driven by investment increases in R&D, where we continue to invest in headcount for AI talent across our business. As we have said previously, for full year 2024, we are anticipating year over year adjusted EBITDA margin expansion, but at a more modest level than the 660 basis point expansion we delivered in 2023, as we balance investing in growth and flowing profitability through to the bottom line.

Speaker Change: Our operating expense guidance does not include cost of revenue, however we plan to realize modest additional benefits from our ongoing infrastructure optimization efforts, and therefore we anticipate Q3 non-GAAP cost of revenue expense to be relatively consistent with Q2.

Speaker Change: The increase in non-GAAP operating expense year over year is driven by investment increases in R&D, where we continue to invest in headcount for AI talent across our business.

Speaker Change: As we have said previously, for full year 2024, we are anticipating year-over-year adjusted EBITDA margin expansion, but at a more modest level than the 660 basis point expansion we delivered in 2023, as we balance investing in growth and flowing profitability through to the bottom line.

Julia Donnelly: We also continue to expect margin expansion in both halves of 2024. Though consistent with our prior remarks, we expect a more modest level of margin expansion in the second half versus significantly higher expansion in the first half as we begin to lap the strengthening adjusted EBITDA margins we drove in the second half of 2023. The evidence of the momentum in our business and underpin our confidence in our ability to deliver on our plans.

Julia Brau Donnelly: We also continue to expect margin expansion in both halves of 2024. As we have noted in our prior remarks, we expect a more modest level of margin expansion in the second half versus significantly higher expansion in the first half as we begin to lap the strengthening adjusted EBITDA margins we drove in the second half of 2023. In closing, I'm proud of our team for delivering yet another strong quarter of results as we execute against our strategic plans. Our continued gains are evidence of the momentum in our business and underpin our confidence in our ability to deliver on our plans. Now I'll hand it over to Bill for some final words. Thanks, Julia.

Speaker Change: We also continue to expect margin expansion in both halves of 2024. Though consistent with our prior remarks, we expect a more modest level of margin expansion in the second half versus significantly higher expansion in the first half as we begin to lap the strengthening adjusted EBITDA margins we drove in the second half of 2023.

Speaker Change: In closing, I'm proud of our team for delivering yet another strong quarter of results as we execute against our strategic plans. Our continued gains are evidence of the momentum in our business and underpin our confidence in our ability to deliver on our plans. Now I'll hand it over to Bill for some final words.

Bill Ready: Now I'll hand it over to Bill for some final words. Thanks, Julia. I want to thank our teams of Pinterest, our advertising partners, and all the people that come to Pinterest to find inspiration in the shop.

William J. Ready: I want to thank our team at Pinterest, our advertising partners, and all the people that come to Pinterest to find inspiration in the shop. And with that, we can open the call up for questions. Thank you. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If, for any reason, you would like to remove that question, press star followed by 0.

Bill: Thanks, Julia. I want to thank our team at Pinterest, our advertising partners, and all the people that come to Pinterest to find inspiration in the shop. And with that, we can open the call up for questions.

Unknown Executive: And with that, we can open the call up for questions. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If, for any reason, we'd like to remove that question, press star followed by two. And if you are using a speaker phone, please pick up your handset before asking your question.

Bill: Thank you.

Speaker Change: If you would like to ask a question, please press star followed by 1 on your telephone keypad.

Speaker Change: If for any reason you would like to remove that question, press star followed by 2.

Operator: And if you are using a speakerphone, please pick up your handset before asking your question. Our first question today comes from Ross Sandler with Barclays. Your line is now open.

Speaker Change: And if you are using a speakerphone, please pick up your handset before asking your question.

Ross Sandler: Our first question is, they come from Ross Sandler with Bark Ways. Your line is now open. Great.

Speaker Change: Our first question of the day comes from Ross Sandler with Barclays. Your line is now open.

Ross Adam Sandler: Great, maybe starting with the macro. So the 17% growth for the third quarter at the midpoint obviously reflects some deceleration from 2Q, but it's within your long-term high teens range. So Julia, you just mentioned a few factors. Could you just flesh out for us how much of the deceleration you would chalk up to tougher comps versus the factors that you mentioned? And then how much might partner revenue increases or ad load increases help offset the factors that are driving deceleration? Thanks a lot.

Julia Donnelly: It's just maybe starting with the macro. So the 17% growth for a third quarter at the midpoint. Obviously, root reflects some deceleration from 2Q, but it's within your long term, high teams range. But Julia, you just mentioned a few factors. Could you just flush out for us how much of the deceleration you would chalk up to tougher cops versus the factors that you mentioned. And then how much might partner revenue increases or upload increases help offset the factors that are driving deceleration? Thanks a lot.

Ross Adam Sandler: Great, just maybe starting with the macro.

Speaker Change: So the 17% growth for third quarter at the midpoint.

Speaker Change: Obviously, it reflects some deceleration from 2Q, but it's within your long-term, high-teamed range.

Julia: So, Julia, you just mentioned a few factors, could you just flesh out for us how much of the deceleration you would chalk up to tougher comps versus...

Speaker Change: the factors that you mentioned, and then how much might partner revenue increases or ad load increases help offset the factors that are driving deceleration. Thanks a lot.

Julia Donnelly: Great. Thanks, Ross. So we feel good about the levers to drive our business. You know, our initiatives are trending consistent with what we outlined at Investor Day. The products we put in market are doing exactly what we've intended for them to do. Looking to Q3, our guidance is a continuation of many of the factors that have helped drive growth in Q1, Q2, and now into Q3, including value capture from lower funnel products and third party demand growing off the Q2 revenue base again. And we noted in the prepared remarks that we expect effects to switch to a one-point headwind for us at current spot rates.

Julia Brau Donnelly: Great, thanks, Ross. So we feel good about the levers to drive our business. You know, our initiatives are trending consistent with what we outlined at Investor Day. The products we put in the market are doing exactly what we've intended for them to do. Looking to Q3, our guidance is a continuation of many of the factors that have helped drive growth in Q1, Q2, and now into Q3, including value capture from lower funnel products and third party demand growing off the Q2 revenue base again.

Julia: Great, thanks, Ross. So we feel good about the levers to drive our business. You know, our initiatives are trending consistent with what we outlined at Investor Day. The products we put in market are doing exactly what we've intended for them to do.

Speaker Change: Looking to Q3, our guidance is a continuation of many of the factors that have helped drive growth in Q1, Q2, and now into Q3, including value capture from lower funnel products and third-party demand growing off the Q2 revenue base again. And we noted in the prepared remarks that we expect FX to switch to a one-point headwind for us at current spot rates.

Julia Brau Donnelly: And we noted in the prepared remarks that we expect FX to switch to a one point headwind for us at current spot rates, and so the 16 to 18% guidance for Q3 would have effectively been one point higher without this FX headwind.

Julia Donnelly: And so the 16 to 18% guidance for Q3 would have effectively been one point higher. Without this effects headwind, that higher range excluding effects impact is roughly consistent with the growth we drove in Q2 and Q1 this year. Particularly when accounting for some of the unique seasonal factors that benefited Q1 that we highlighted on our prior earnings call, including the Easter timing shift and leap day. So the underlying growth rate of the business is holding effectively stable despite the fact that our comps last year did start to become more difficult in Q3 and the fact that we're experiencing further softness in food and beverage.

Speaker Change: And so the 16 to 18% guidance for Q3 would have effectively been one point higher without this FX headwind. That higher range, excluding the FX impact, is roughly consistent with the growth we drove in Q2 and Q1 this year.

Speaker Change: particularly when accounting for some of the unique seasonal factors that benefited Q1 that we highlighted on our prior earnings call, including the Easter timing shift and leap day. So the underlying growth rate of the business is holding effectively stable despite the fact that our comps last year did start to become more difficult in Q3 and the fact that we're experiencing further softness in food and beverage. And if you look at it on a two-year stack basis, you'll see that strength persist as well. And then lastly, as some of you may remember, it's worth noting that we do not accept political ads. So that's a difference to account for as you compare us to other platforms as well.

Carla Sebastian: That higher range excluding the FX impact is roughly consistent with the growth we've driven in Q2 and Q1 this year, particularly when accounting for some of the unique seasonal factors that benefited Q1 that we highlighted on our prior earnings call, including the Easter timing shift and leap day. So the underlying growth rate of the business is holding effectively stable, despite the fact that our comps last year did start to become more difficult in Q3 and the fact that we're experiencing further softness in food and beverage.

Julia Donnelly: And if you look at it on a two-year stack basis, you'll see that strength persist as well.

Julia Donnelly: And then lastly, as some of you may remember, it's worth noting that we do not accept political ads. So that's a difference to account for as you compare us to other platforms as well.

Carl Sebastian: Our next question today comes from Carl Sebastian with Bay Art. Your line is now open. Great. Thanks for taking my question. I appreciate all the detail on the call.

Carla Sebastian: And then lastly, as some of you may remember, it's worth noting that we do not accept political ads. So that's a difference to account for as you compare us to other platforms as well. Our next question today comes from Carla Sebastian with Bayard. Your line is now open.

William J. Ready: Great. Thanks for taking my question. I appreciate all the detail on the call.

Speaker Change: Our next question today comes from Carl Sebastian with Bayard. Your line is now open.

William J. Ready: I was hoping to dig in a little bit more on user engagement trends. Just given all the efforts you've made to improve the amount of relevancy of personalized content and related to that, are you seeing any impact from seasonality over the summer months on user engagement? And I would also just be curious as well how much additional growth you see here from ad load as you try to balance both the organic content as well as the increasing mix-up.

Carl Sebastian: Great, thanks for taking my question.

Bill Ready: I was hoping to dig in a little bit more on user engagement trends, just given all the efforts you've made to improve the amount of relevancy of personalized content. And related to that, are you seeing any impact from seasonality over the summer months and engagement? And would also just be curious as well how much additional growth you see here from ad load as you try to balance both the organic content as well as the increasing mix of apps. Thank you. Great.

Carl Sebastian: I appreciate all the detail on the call. I was hoping to dig in a little bit more on user engagement trends.

Carl Sebastian: Just given all the efforts you've made to improve the amount of relevancy of personalized content.

Speaker Change: And related to that, are you seeing any impact from seasonality over the summer months and engagement? And I would also just be curious as well, how much additional growth you see here from ad load as you try to balance both the organic content as well as the seasonal.

William J. Ready: Thanks for the question. I'd say, you know, engagement continues to be a real highlight for us overall. You know, the general trend of, you know, not only accelerating user growth, and you saw us put up 12% user growth overall, but not only is that holding, but this general trend of engagement per user deepening is also continuing to hold. So you can see that clearly in the, you know, steady improvement in our wow to mal ratio in 2024, even as we bring in record amounts of new users.

Bill Ready: Thanks for the question. You know, I'd say engagement continues to be a real highlight for us overall. You know, the general trend of not only accelerating user growth in this all has put up 12%. You know, user growth overall, not only is that holding, you know, this general trend of engagement for user deepening is also continuing to hold. So placing to see that clearly is really in the, you know, the steady improvement in our wow to mal ratio in 2024, even as we bring in record amounts of new users.

Speaker Change: The increasing mix of ads. Thank you.

Speaker Change: Great. Thanks for the question. You know, I'd say, you know, engagement continues to be a real highlight for us overall. You know, the general trend of, you know, not only accelerating user growth, as you saw us put up 12%, you know, user growth overall, not only is that holding, you know, this general trend of engagement per user deepening is also continuing to hold.

Speaker Change: So a place you can see that clearly is really in the steady improvement in our wow to mal ratio in 2024, even as we bring in record amounts of new users.

Bill Ready: So if you pull back the covers on that, and if you get a little bit more to your question on some of the different dynamics of play, you pull back the covers on that. This is really exciting things happening with the way that users are engaging. As we've been driving improvements in curation and action ability, we're seeing more and more clicks and conversions from users. Now, this is really great for users because it means they're finding more of what they're looking for on Pinterest. And it's great for advertisers because they see clicks and conversions as much more valuable than impressions.

William J. Ready: So if you pull back the covers on that, and this will get a little bit more to your question on some of the different dynamics at play, you pull back the covers on that, there are some really exciting things happening with the way that users are engaging. As we've been driving improvements in curation and actionability, we're seeing more and more clicks and conversions from users. Now, this is really great for users because it means they're finding more of what they're looking for on Pinterest.

Speaker Change: So, if you pull back the covers on that, and this will get a little bit more to your question around some of the different dynamics at play, you pull back the covers on that, there's some really exciting things happening with the way that users are engaging. As we've been driving improvements in curation and actionability, we're seeing more and more clicks and conversions from users.

William J. Ready: And it's great for advertisers because they see clicks and conversions as much more valuable than impressions. And to your comment about Adlo, we've been talking about ads as great content for users, particularly when they're in a commercial context, and those ads are relevant to what they're looking for. So we continue to see that synergistic dynamic there because we have more than half our users on the platform to shop. So that's been a real lever for us.

Speaker Change: This is really great for users because it means they're finding more of what they're looking for on Pinterest.

Speaker Change: And it's great for advertisers because they see clicks and conversions as much more valuable than impressions.

Bill Ready: And to your comment around Adela, we've been talking about ads as great content for users, particularly when they're in a commercial context and those ads are relevant to what they're looking for. So we continue to see that synergistic dynamic there because we have more than half our users on the platform to shop. So that's been a real lever for us. We think it continues to be. And so back to engagement, we track a number of engagement metrics, and we continue to see nice growth and engagement across the platform, measured by the various signals there, but with clicks and lower follow behavior becoming a more meaningful part of that mix, which again is really encouraging.

Speaker Change: And to your comment around Adlo, we've been talking about ads as...

Speaker Change: Great content for users, particularly when they're in a commercial context.

Speaker Change: and those ads are relevant to what they're looking for. So we continue to see that synergistic dynamic there because we have more than half our users on the platform to shop. So that's been a real lever for us. We think it continues to be.

William J. Ready: We think it continues to be. And so back to engagement, we track a number of engagement metrics, and we continue to see nice growth and engagement across the platform measured by the various signals there, but with clicks and lower funnel behavior becoming a more meaningful part of that mix, which is again really encouraging. We're also seeing deeper penetration with our mobile app users, who tend to be more sticky and highly engaged users.

Speaker Change: And so back to, you know, engagement, you know, we track a number of engagement metrics, and we continue to see nice growth and engagement across the platform, measured by the various signals there. But with clicks and lower funnel behavior, becoming a more meaningful part of that mix, which again is really encouraging. We're also seeing deeper penetration with our mobile app users, who tend to be more sticky and highly engaged users.

Julia Donnelly: We're also seeing deeper penetration with our mobile app users, who tend to be more sticky and highly engaged users. And finally, just call out that we've added more of that highly desirable lower follow behavior, as we've seen up for our users. We're adding that more into how we're measuring success for the business, for our teams, and in how we're continuing to enhance that flywheel and synergistic effect between ads as great content for users that are in a commercial context.

William J. Ready: And finally, I just want to call out that as we've added more of that highly desirable lower funnel behavior, as we've seen that for our users, we're adding that more into how we measure success for the business, for our teams, and in how we're continuing to enhance that flywheel and synergistic effect between ads as great content for users that are in commercial contexts. Maybe I'll pause there.

Speaker Change: And finally, I just call out that, you know, we've added, and we added more of that highly desirable lower funnel behavior.

Speaker Change: As we've seen that for our users, we're adding that more into how we're measuring success for the business, for our teams, and in how we're continuing to enhance that flywheel and synergistic effect between ads as great content for users that are in commercial contexts.

Julia Donnelly: Maybe I'll pause there, and Julie, anything to add to that? Yeah, so maybe just to share a little bit more color, you know, previously we measured engagement as a session longer than 60 seconds, impressions, and save. And as Bill talked about, we've evolved our platform to be more actionable, and we've updated our view of engagement to include some of these additional dimensions that are also important signals of depth of engagement, including, you know, things like measuring outbound clicks and looking at curation signals like collage creation, for example. Which is a newer feature on our platform.

Julia Brau Donnelly: And Julie, anything you'd add to that? Yeah, So maybe just to share a little bit more color: previously, we measured engagement as sessions longer than 60 seconds, impressions, and saves. And as Bill talked about, we've evolved our platform to be more actionable, and we've updated our view of engagement to include some of these additional dimensions that are also important signals of depth of engagement, including things like measuring outbound clicks and looking at curation signals like collage creation, for example, which is a newer feature on our platform.

Julie: Maybe I'll pause there, and Julia, anything you need to add to that? Yeah, so maybe just to share a little bit more color, you know, previously we measured engagement as sessions longer than 60 seconds, impressions, and saves, and as Bill talked about, we've evolved our platform to be more actionable, and we've updated our view of engagement to include some of these additional dimensions that are also important signals of depth of engagement, including, you know, things like measuring outbound clicks and looking at curation signals like collage creation, for example, which is a newer feature on our platform.

Julia Brau Donnelly: So, as Bill mentioned, overall engagement signals remain strong, and we're also seeing this exciting shift that outbound clicks are becoming a more meaningful part of user behavior as users are able to find what they're looking for more quickly. And we believe this is a healthy evolution of the platform, and it's also better aligned with the value we're providing advertisers since we sell ads across the full funnel on a views, clicks, and conversions basis. Our next question today comes from Eric Sheridan with Goldman Sachs. Your line is now open.

Julia Donnelly: So as Bill mentioned, overall engagement signals remain strong, and we're also seeing this exciting shift that outbound clicks are becoming a more meaningful part of user behavior. As users are able to find what they're looking for more quickly. And we believe this is a healthy evolution of the platform, and it's also kind of better aligned with the value we're providing advertisers since we sell ads across the full funnel and abuse clicks and conversions basis.

Julie: So as Bill mentioned, overall engagement signals remain strong and we're also seeing this exciting shift that outbound clicks are becoming a more meaningful part of user behavior as users are able to find what they're looking for more quickly and we believe this is a healthy evolution of the platform and it's also kind of better aligned with the value we're providing advertisers since we sell ads across the full funnel on a views, clicks, and conversions basis.

Julie: Our next question today comes from Eric Sheridan with Goldman Sachs. Your line is now open.

Unknown Executive: Thank you so much for taking the question. Maybe a two-parter, if I could, following up on Ross's question before about end demand, is there any differences you're seeing by geography in terms of the end demand environment you're finding something with respect to digital ads? That'd be part one. And part two, Bill, you gave a lot of detail, especially with going to Khan Interquarter, about the shift that Pinterest is seeing in terms of advertiser demand away from the macro environment. Can you talk a little bit about what you're seeing in terms of your competitive positioning, changing or shifting with respect to the broader digital advertising ecosystem?

Eric James Sheridan: Thank you so much for taking the question, maybe a two-parter if I could. Following up on Ross's question before about end demand, are there any differences you're seeing by geography in terms of the end demand environment you're finding, Seldon, with respect to digital ads? That'd be part one.

Eric James Sheridan: Thank you so much for taking the question. Maybe a two-parter if I could. Following up on Ross' question before about end demand, is there any differences you are seeing by geography in terms of the end demand environment you are finding, Seldon, with respect to digital ads? That would be part 1. And part 2, Bill, you gave a lot of detail especially with going to Con Inter Quarter about the shift that Pinterest is seeing in terms of advertiser demand away from the macro environment. Can you talk a little bit about what you are seeing in terms of your competitive positioning changing or shifting with respect to the broader digital advertising ecosystem? Go a little bit deeper there. Thanks so much.

William J. Ready: And part two, Bill, you gave a lot of detail, especially going to the Khan Intercorridor, about the shift that Pinterest is seeing in terms of advertiser demand away from the macro environment. Can you talk a little bit about what you're seeing in terms of your competitive positioning, changing or shifting with respect to the broader digital advertising ecosystem? Go a little bit deeper there. Thanks so much.

Unknown Executive: Go a little bit deeper there. Thanks so much.

Bill Ready: Maybe I'll start with the second one first, and then give Julia for the question on geography there. So I'd say, generally, just a broader macro, we're seeing an ad market, and we think it's relatively stable versus last quarter. There are some puts and takes there. We're seeing real strength come from the retail vertical due to all the lower funnel improvements we've been building to drive performance there. And within that sort of direct interior question on competitive positioning, we've talked all more than doubling a number of clicks to advertisers year on year; third straight quarter that we've done that.

William J. Ready: Great, maybe I'll start with the second one first, and then give it to Julia for the question on geography there. So I think, you know, generally, just the broader macro, we're seeing an ad market that we think is relatively stable versus last quarter, although there are some puts and takes there. You know, we're seeing real strength come from the retail vertical due to all the lower funnel improvements we've been building to drive performance there.

Bill: Great. Maybe I'll start with the second one first and then give it to Julia for the question on geography there. So I think, you know, generally, you know, just the broader macro, we're seeing an ad market that we think is relatively stable versus last quarter. There are some puts and takes there. You know, we're seeing real strength come from the retail vertical due to all the lower funnel improvements we've been building to drive performance there. And, you know, within that, you know, sort of directly to your question on competitive positioning, you know, we've talked about more than doubling the number of clicks to advertisers year on year. Third straight quarter that we've done that, you know, the value capture on that we've seen take hold first with the largest, most sophisticated advertisers as more and more advertisers are seeing that first.

William J. Ready: And, you know, within that, sort of directly to your question on competitive positioning, you know, we've talked about more than doubling the number of clicks to advertisers year on year, third straight quarter that we've done that. The value capture on that, we've seen take hold first with the largest, most sophisticated advertisers, as more and more advertisers are seeing that flow through into their measurement tools and seeing that remain consistent, we're seeing that now take hold Consistent with what we shared on prior calls, you know, we're seeing that we're actually winning more and more of those performance budgets and always on budgets, particularly with those larger advertisers in retail, and we're seeing that continue to be a real strength for us as we're driving more and more lower funnel performance. So we think we're positioned quite well there. And, again, that's why we're seeing, you know, broad-based strength across retail. And we think there's more of that to go.

Bill Ready: The value capture on that we've seen take hold first with the largest, most sophisticated advertisers as more and more advertisers are seeing that flow through into their measurement tools and seeing that remain consistent. We're seeing that now take hold with the next grouping of advertisers. So consistent with what we shared on prior calls. We're seeing that we're actually winning more and more of those performance budgets and always-on budgets, particularly with those larger advertisers in retail. And we're seeing that continue to be a real strength for us as we're driving more and more lower funnel performance.

Bill: Unknown Speaker ... ... ... ... ... ...

Bill: Consistent with what we shared on prior calls, you know, we're seeing that we're actually winning more and more of those performance budgets and always-on budgets, particularly with those larger advertisers in retail, and we're seeing that continue to be a real strength for us as we're driving more and more lower funnel performance. So we think we're positioned quite well there, and again, that's why we're seeing, you know, broad-based strength across retail, and we think there's more of that to go. I talked about how Performance Plus...

Bill Ready: So we think we're positioned quite well there. And again, that's why we're seeing broad-based strength across retail. And we think there's more of that to go. I talked about how Performance Plus, as that comes out for that next year of advertisers, that some of the hurdles they face to adopting more and more of our lower funnel performance solutions, Performance Plus, that actually automates so much of that for them around campaign creation and setup. In those various factors, we think can help to further accelerate that adoption. And that's the place that we've known that some of the larger ad platforms have had those things for a while.

William J. Ready: I talked about how Performance Plus, as that comes out, for that next tier of advertisers, some of the hurdles they face to adopting more and more of our lower funnel performance solutions, Performance Plus that actually, you know, automates so much of that for them around campaign creation and setup, and those various factors we think can help to further accelerate that adoption. And that's a place that we've known that some of the larger ad platforms have had those things for a while, and we've been competing on, you know, the high commercial intent of our platform, the uniqueness of being able to see what users are shopping for before they purchase. We've been competing in those things.

Bill: As that comes out, you know, for that next tier of advertisers, that, you know, some of the some of the hurdles they face to, you know, adopting more and more of our lower funnel performance solutions.

Bill: Performance Plus that actually, you know, automates so much of that for them around campaign creation and set up. And those various factors, we think, can help to further accelerate that adoption. And that's a place that we've known that some of the larger ad platforms have had those things for a while. And we've been competing on, you know, the high commercial intent of our platform, the uniqueness of being able to see what users are shopping for.

Bill Ready: And we've been competing on the high commercial intent of our platform, the uniqueness of being able to see what users are shopping for before they purchase. We've been competing on those things; large, sophisticated advertisers have been seeing it as we bring more of that automation. We think of broader swap of retailers going to be able to lean in even more on that. And again, we've been seeing really good signals of that. We think there's more of that to come. So we feel really well positioned there. And I'd call out that we have other verticals where we're seeing strength as well, like technology, auto, financial services.

William J. Ready: Large, sophisticated advertisers have been seeing it. As we bring more of that automation, we think a broader swath of retailers are going to be able to lean in even more on that. And, again, we've been seeing really good signals of that. We think there's more of that to come. So we feel really well positioned there.

Bill: before they purchase, we've been competing on those things, large, sophisticated advertisers have been seeing it as we bring more of that automation, we think a broader swath of retailers are gonna be able to lean in even more on that. And again, we've, we've been seeing really good signals of that we think there's more that to come. So we feel really well positioned there.

William J. Ready: And I would call out that we have other verticals where we're seeing strength as well, like technology, auto, and financial services. And so, you know, that's giving you some of the competitive dynamic. And back to the macro and sort of the puts and takes, you know, again, relatively stable overall, but we do have more exposure in certain categories given the use cases on Pinterest, such as food and beverage that Julia called out in her comments, where we've seen some weakness there.

Bill: And I'd, you know, call out that we have other verticals where we're seeing strength as well like technology, autos, financial services. And so, you know, that's giving you some of the competitive dynamic. And back to the macro and sort of the puts and takes.

Bill Ready: And so that's giving you some of the competitive dynamic and back to the macro on sort of the puts and takes. Again, relatively stable overall, but we do have more exposure and certain categories given the use cases on Pinterest, such as food and beverage that Julia called out in her comments, where we've seen some weakness there. This really industry based. I think, as many of the advertisers have been calling out in their own results, where they've been facing some pressure around some of what they're seeing from consumers. That's more specific to food and beverage. Brought to that, I think we see relative stability.

Speaker Change: You know, again, relatively stable overall, but we do have more exposure in certain categories given the use cases on Pinterest.

Speaker Change: Such as food and beverage that Julia called out in her comments, where we've seen some weakness there. It's really industry-based. I think as many of those advertisers have been calling out in their own results.

William J. Ready: It's really industry-based, and I think, you know, many of those advertisers have been calling out in their own results where they've been facing some pressure around some of what they're seeing from consumers. That's more specific to food and beverage.

Speaker Change: where they've been facing some pressure around some of what they're seeing from consumers. That's more specific to food and beverage. Broader than that, I think we see relative stability. Maybe with that, I'll pause. Julia, anything else you'd add on the macro? Or we can go to the other part of the question on geography. Yeah, so I don't think anything else to add on the broader commentary there on the ad market overall. I think the only other kind of point I might add is in, you know, our rest of world segment, you know, we did see a nice acceleration to 36% on a constant currency basis, up from 26% the prior quarter, albeit off a relatively small dollar base there. Revenue, the primary factor that drove this acceleration was the ramping of the Google third-party partnership that we announced in Q1, began to ramp.

William J. Ready: Broader than that, I think we see relative stability. Maybe with that, I'll pause. Julia, anything else you'd add to the macro?

Julia Donnelly: Maybe without pause, Julia, anything else you add on the macro? Or we can go to the other part of the question on geography. Yeah, I don't think there's anything else to add on the broader commentary there on the ad market overall. I think the only other kind of point I might add is in, you know, our Rest of World segment. No, we did see a nice acceleration to 36% on a constant currency basis, up from 26% the prior quarter. I'll beat off a relatively small dollar base there revenue. The primary factor that drove this acceleration was the ramping of the Google third-party partnerships that we announced in Q1 began to ramp in Q2.

Julia Brau Donnelly: Or we can go to the other part of the question on geography. Yeah, so I don't think I have anything else to add to the broader commentary there on the ad market overall. I think the only other kind of point I might add is in, you know, our rest of world segment, we did see a nice acceleration to 36% on a constant currency basis, up from 26% the prior quarter, albeit off of, you know, a relatively small dollar base there for revenue.

Julia Brau Donnelly: The primary factor that drove this acceleration was the ramping of the Google third-party partnership that we announced in Q1 and began to ramp up in Q2. And as a reminder, that is allowing us to monetize what were previously unmonetized markets. And we're now also starting to expand into countries in our rest of the world segment that we were undermonetized in, so we're pleased with how that's beginning to launch. Resellers are another lever to monetize those regions. We launched these reseller partnerships in Q2. So that's still in the early days.

Julia Donnelly: As a reminder, that is allowing us to monetize what was previously unmonetized markets. We're now also starting to expand into countries in our Rest of World segment that we were under monetized in. So we're pleased with how that's beginning to launch. Resilvers are another lever to monetizing those regions. We launched these reseller partnerships in Q2. That's still in early days, but we expect this to start to modestly contribute to the rest of world segment over the course of the next year as well.

Speaker Change: Agency. We're pleased with how that's beginning to launch. Resellers are another lever to monetizing those regions. We launched these reseller partnerships in Q2, so that's still in early days, but we expect this to start to modestly contribute to the rest of world segment over the course of the next year as well.

Julia Brau Donnelly: But we expect this to start to modestly contribute to the rest of the world segment over the course of the next year as well. Our next question comes from Ron Josey with Citi. Your line is now open.

Ron Josie: Our next question comes from Ron Josie with City. Your line is now open. Thanks for the question.

Speaker Change: Our next question comes from Ron Josey with Citi. Your line is now open.

Ronald Victor Josey: Great, thanks for the question. You know, Bill, Julia, I wanted to maybe double-click a little bit more on the advertising products that are coming out here. And specifically, on the ad product without direct links, you know, this is now the third quarter in a row with clicks doubling again this quarter. So we'd love to hear just about the progress in terms of adoption amongst your advertiser base and then also how the sales process is going to discontinue the ramp over the coming quarters.

Ron Josie: You know, Bill Julia wanted to maybe double click a little bit more on the ad products that are coming out here and specifically on the ad talk that's out directly linked. You know, this is now what the third quarter in a row with clicks doubling. Again, this quarter. So we'd love to hear just about the progress in terms of adoption amongst your advertisers. And then also how the sales process is going to discontinue their ramp over, you know, coming quarters. And then, with Performance Plus coming online here, Bill, you talked about it being very well received.

Ronald Victor Josey: Great, thanks for the question. You know, Bill, Julia, I wanted to maybe double click a little bit more on the ad products that are coming out here and specifically on the ad products without direct links, you know, this is now what the third quarter in a row with clicks doubling again this quarter. So we'd love to hear just about the progress in terms of adoption amongst

Speaker Change: Unknown Speaker Your advertiser base and then also how the sales process is going to discontinue the ramp over over, you know, coming quarters. And then with performance plus coming online here, Bill, you talked about it being very well received. I'd love to hear more about the rollout. Specifically, should we expect a similar timeline to direct links? Or perhaps with different modules roll out faster, like performance plus creative coming up before automation and things along those lines?

Ronald Victor Josey: And then with Performance Plus coming online here, Bill, you talked about it being very well received. We'd love to hear more about the rollout. Specifically, should we expect a similar timeline to direct links, or perhaps with different modules rolling out faster, like Performance Plus Creative coming up before automation and things along those lines? Thanks for the help.

Bill Ready: We love to hear more about the rollout. Specifically, should we expect a similar timeline to direct links, or perhaps with different modules rollout faster, like performance plus creative coming up before automation and things along that line. Thanks for the help. Yeah, thanks for the question. So, you know, on direct links, yes, the third quarter row of doubling clicks. You know, we saw very quickly that the largest, most sophisticated advertisers; you know, they're the ones able to respond to that very quickly. They've been, you know, driving, you know, really tremendous strength for us and continue to do so.

William J. Ready: Yeah, thanks for the question. So, you know, on direct links, yes, the third quarter of doubling clicks, we saw very quickly that the largest, most sophisticated advertisers, you know, they're the ones that are able to respond to that very quickly. They've been, you know, driving, you know, really tremendous strength for us and continue to do so. We're seeing that start to broaden into the next tranche of retailers. That's also why we feel really good about sort of the ongoing dynamics in the business, because we know we've generated really great raw material in terms of the clicks and conversions that we're sending to advertisers and the very significant increases of those year-on-year.

Speaker Change: Thanks for the help.

Bill: Yeah, thanks for the question. So, you know, on direct links, yeah, it's the third quarter of doubling clicks.

Bill: You know, we saw very quickly that the largest, most sophisticated advertisers, you know, they're the ones that are able to respond to that very quickly. They've been, you know, driving, you know, really tremendous strength for us and continue to do so. We're seeing that start to broaden into the next tranche of retailers. That's also why we feel really good about sort of the ongoing dynamics in the business is that we know we've generated really great raw material in terms of the clicks and conversion that we're sending to advertisers and the very significant increases of those year on year. But we also know that, you know, we've only yet captured the value from a portion of those. And the rest of those will continue to capture value from those as other retailers adopt measurement solutions. And now with Performance Plus, we're going to make it easier.

Bill Ready: We're seeing that start to broaden into the next tranche of retailers. That's also why we feel really good about sort of the ongoing dynamics in the business is that we know we've generated really great raw material in terms of the clicks and conversion that we're sending to advertisers in the very significant increase of those year on year. But we also know that you know, we've only yet captured the value from a portion of those, and the rest of those will continue to capture value from those other retailers adopt measurement solutions. And now, with Performance Plus, we're going to make it easier for them on campaign creation.

William J. Ready: But we also know that, you know, we've only yet captured the value from a portion of those, and the rest of those will continue to capture value from those as other retailers adopt measurement solutions. And now, with Performance Plus, we're going to make it easier for them to create campaigns. And, you know, I mentioned this in my remarks a little bit, as we get to the second part of your question around Performance Plus, you know, for a lot of those less sophisticated advertisers, you know, for them, it's not just about their sophistication, you know, which, you know, we've talked about that in measurement and how it takes longer for them to see that, and they need to see it over multiple quarters.

Bill Ready: And you know, I mentioned this in my remarks a little bit. But I also get to sort of the second part of your question around performance plus, you know, for a lot of those less sophisticated advertisers, you know, for them, it's not just about their sophistication, you know, which, you know, we've talked about that in measurement and how it takes longer for them to see that they need to see over multiple quarters. It's also about, you know, the work they have to do to go create a campaign and how do you optimize creative across our platform and those kinds of things.

Speaker Change: Director of Campaign Creation, and I mentioned this in my remarks a little bit.

Speaker Change: As we get to sort of the second part of your question around Performance Plus, you know, for a lot of those less sophisticated advertisers,

Speaker Change: For them, it's not just about their sophistication, which we've talked about in measurement and how it takes longer for them to see that and they need to see it over multiple quarters.

William J. Ready: It's also about, you know, the work they have to do to go create a campaign and how you optimize creative across our platform and those kinds of things. And when you look at what we're doing with Performance Plus, it's really getting to, you know, how do you go create the setup of a campaign? How do you optimize the performance of that campaign? How do you match the creative, you know, to the audience? And then, you know, how might you further optimize that creative idea?

Speaker Change: It's also about, you know, the work they have to do to go create a campaign and how you optimize creative across our platform and those kinds of things. And when you look at what we're doing with Performance Plus.

Bill Ready: And when you look at what we're doing with Performance Plus, you know, it's really getting to, you know, how do you go create, you know, the setup of a campaign, how do you optimize the performance of that campaign, how do you match the creative for the, you know, to the audience. And then, you know, how might you further optimize that creative, and the more sophisticated advertisers, I think, do that really well, you know, on their own. And where we think Performance Plus can be additive, but they've been the first to sort of pick up on the increased clicks and conversions on the platform.

Speaker Change: You know, it's really getting to, you know, how do you go create.

Speaker Change: You know, the setup of a campaign.

Speaker Change: How do you optimize the performance of that campaign? How do you match the creative to the audience?

William J. Ready: And the more sophisticated advertisers, I think, do that really well, you know, on their own, and that's where we think Performance Plus can be added to, but they've been the first to sort of pick up on the increased clicks and conversions on the platform. For that next tranche, we think, you know, the fact that it becomes dramatically easier to set up a campaign, significantly easier to optimize creative for different audiences, or even dynamically create creative that will further optimize their click-through rates.

Speaker Change: And then, you know, how might you further optimize that creative? And the more sophisticated advertisers, I think, do that really well, you know, on their own and where we think Performance Plus can be additive, but they've been the first to sort of pick up on the increased clicks and conversions on the platform. For that next tranche, we think, you know, the fact that it becomes dramatically easier to set up a campaign, significantly easier to optimize creative to the different audiences or even dynamically create creative that will further optimize their click-through rates. We think it's going to really help that value capture to spread further. Now, again, it's a multi-quarter rollout, you know, don't think of this as like a hockey stick, just as with our other things, multi-quarter rollout, but that's, again, what gives us a lot of confidence in the...

Bill Ready: For that next challenge, we think, you know, the fact that it becomes dramatically easier to set up a campaign, significantly easier to optimize creative to the different audiences or even dynamically create creative that will further optimize their click-through rates. We think that's going to really help that value capture to spread further. Now, again, it's a multi-quarter rollout. You know, I don't think of this as like a hockey stick, just as with our other things, multi-quarter rollout. But that's again what gives us a lot of confidence in the ongoing momentum in the business and the steady build on that over a multi-quarter period.

William J. Ready: We think that's going to really help that value capture to spread further. Now, again, this is a multi-quarter rollout. You know, don't think of this as like a hockey stick, just as with our other things, multi-quarter rollout, but that's, again, what gives us a lot of confidence in the ongoing momentum in the business and the steady build in that over a multi-quarter period. And, you know, the tangible examples of that, a few of which I mentioned in my comments, they're pretty real, right?

Bill Ready: And the tangible example of that, a few of which I mentioned in my comments, they're pretty real, right? You know, seeing 10% plus, you know, improvement in costs for advertisers and our alpha testing on our beta testing is quite encouraging. And then like the examples I shared in the case that he's like from Timberland, you know, 34% lower CPA, 16% higher CTR, 50% higher ROAS that Timberland saw. You know, these are really, really encouraging. And again, multi-quarter adoption curve as we talked about before. But I think that's what gives us a lot of confidence that can really help that next tier of advertisers in the campaign setup.

Speaker Change: ongoing momentum in the business and the steady build in that over a multi-quarter period. And, you know, the tangible examples of that, a few of which I mentioned in my comments, they're pretty real, right? You know, seeing 10% plus

William J. Ready: You know, improvement in costs for advertisers in our alpha testing and our beta testing is quite encouraging. And like the examples I shared in the case study from Timberland, you know, a 34% lower CPA, 16% higher CTR, and 50% higher ROAS that Timberland saw. You know, these are really, really encouraging.

Speaker Change: So, you know, improvement in costs for advertisers in our alpha testing and our beta testing is quite encouraging. And like the examples I shared in the case study from Timberland, you know, a 34 percent lower CPA, 16 percent higher CTR, 50 percent higher ROAS that Timberland saw, you know, these are really, really encouraging. And again, multi-quarter adoption curve, as we've talked about before, but I think that's what gives us a lot of confidence that can really help that next tier of advertisers in the campaign set up, you know, we're seeing things like 50 percent reduction in the number of steps required to go create a campaign on Pinterest. So I think it just holds with the broader theme you've seen from us over the last two years.

William J. Ready: And again, the multi-quarter adoption curve, as we've talked about before. But I think that gives us a lot of confidence that we can really help that next tier of advertisers in the campaign setup. You know, we're seeing things like a 50% reduction in the number of steps required to go create a campaign on Pinterest. So I think it just holds with the broader theme that you've seen from us over the last two years.

Bill Ready: You know, we're seeing things like a 50% reduction in the number of steps required to go create a campaign on Pinterest. So I think it just holds with the broader theme that you've seen from us over the last two years. We're just consistently, we're making it easier and easier for more and more advertisers and more and more of the industry to do business with Pinterest. And so you've seen that, you know, every couple of quarters has created a step function for us. And we think that as we look forward, you know, it continues to bolster the ongoing strength in the business and, you know, very much consistent with what we talked about.

William J. Ready: We're just consistently making it easier and easier for more and more advertisers and more and more of the industry to do business with Pinterest. And so you've seen that, you know, every couple of quarters has created a step function for us. And, you know, we think that as we look forward, it continues to bolster the ongoing strength in the business and, you know, very much consistent with what we talked about as we lined those initiatives out at our investor day last year for our multi-year review. Hope that helps. Our next question comes from Mark Mahaney with Evercore. Your line is now open.

Speaker Change: consistently, we're making it easier and easier for more and more advertisers and more and more of the industry to do business with Pinterest. And so you've seen that, you know, every couple quarters has created a step function for us. And we think that as we look forward, you know, continues to bolster the ongoing strength in the business, and, you know, very much consistent with what we talked about, as we line those initiatives out at our Investor Day last year for our multi-year review. Hopefully that helps.

Unknown Executive: As we line those initiatives, I arm best of day last year for a multi-review. Hope that helps.

Mark Mahaney: Our next question comes from Mark Mahaney.

Mark Mahaney: What's Evercore? Your line is now open. Thanks. I just asked about the 3P partnerships. You mentioned the contribution that Google made to Rest of the World. I know in the past you've said you expect a contribution to be greater in the June quarter than in the March quarter. And again, again, greater in the September quarter than in the June quarter.

Speaker Change: Our next question comes from Mark Mahaney with Evercore. Your line is now open.

Mark Stephen F. Mahaney: Thanks. I'll just ask about the 3P partnerships. You mentioned the contribution that Google made to the rest of their world. I know in the past, you've said you expect the contribution to be greater in the June quarter than in the March quarter. And again, again, greater in the September quarter than in the June quarter. How far do you think this, talk about like how long you think this takes to ramp up or how long, how long is the runway for ramping? Is this something that could build an absolute fortune for a year or two?

Mark Stephen F. Mahaney: Thanks. I'll just ask about the three key partnerships you mentioned, the contribution that Google made to the rest of the world. I know in the past you've said you expect the contribution to be greater in the June quarter than in the March quarter, and again, again, greater in the September quarter than in the June quarter. How far do you think this...

Bill Ready: How far do you think this talk about, like how long you think this takes to ramp, or how long is the runway for ramp? Is this something that could build an absolute dollars for a year or two? Is there anything you can do to accelerate the, I guess, the performance of the 3P partnerships. And do you need to expand anymore with 3 partnerships? You've got two very large partners now in Amazon and Google. That may be good enough, but just talk about the opportunity to fill in beyond those two. Thank you very much. Yeah, thanks for the question, Mark.

Speaker Change: Talk about like how long you think this takes to ramp or how long how long is the runway for ramping? Is this something that could build an absolute dollars for a year or two? Is there anything you can do to accelerate?

William J. Ready: Is there anything you can do to accelerate the, I guess, performance of the 3P partnerships? And do you need to expand any more 3P partnerships? You've got two, you know, very large partners now in Amazon and Google. That may be good enough, but just talk about the opportunity to fill in beyond those two. Thank you very much.

Speaker Change: The, I guess, the performance of the three key partnerships, and do you need to expand any more three partnerships? You've got two very large partners now in Amazon and Google, that may be good enough, but just talk about the opportunity to fill in beyond those two. Thank you very much.

William J. Ready: Yeah, thanks for the question, Mark. You know, if you step back from it all, you know, we're still in the relatively early days of what we're doing with 3P, right? We're a little bit more than a year in from when we first announced that early 23. And, you know, we've seen Amazon ramping nicely, you know, Google, you know, we're much earlier on with that as we announced them, you know, roughly a year after Amazon, and that's starting to ramp as well.

Bill Ready: You know, if you step back from it all, you know, we're still relatively early days and what we're doing with 3P. Right. We're a little bit. More than a year and from when we first announced that early 23. And you know, we've seen, you know, Amazon ramping nicely. You know, Google, you know, we're, we're much earlier on with that as we announced them, you know, roughly a year after Amazon. And that's starting to ramp as well. And so we continue to see each of those build, you know, as we shared in our commentary that, you know, Q2 built off the baseline and we saw on Q1.

Speaker Change: Yeah. Thanks for the question, Mark. You know, if you step back from it all, you know, we're still relatively early days in what we're doing with 3P, right? We're a little bit more than a year in from when we first announced that early 23. And, you know, we've seen, you know, Amazon ramping nicely, you know, Google, you know, we're much earlier on with that, as we announced them, you know, roughly a year after Amazon, and that's starting to ramp as well. And so we continue to see each of those build, you know, as we shared in our commentary, that, you know, Q2 built off the baseline that we saw on Q1. We have similar expectations of that going forward.

William J. Ready: And so we continue to see each of those build, you know, as we shared in our commentary that, you know, Q2 built off the baseline that we saw in Q1. We have similar expectations of that going forward. So we continue to see those things as a steady build.

Bill Ready: We have similar expectations of that going forward. So we continue to see those things as a steady build.

Bill Ready: And we think there's a lot more opportunity, not just with 3P, but in monetizing more of our platform. You know, we really brought those in to round out gaps in our auction and the markets where we were already monetized, and then help us start monetizing a market where we were completely unmonetized. And so, you know, we see that as, you know, something that will be optimizing for quarters and years to go. And with a lot more of that opportunity still in front of us. But even as we still feel really good about the progress that we've made and the steady build about, you know, on each of those partnerships.

William J. Ready: And we think there's a lot more opportunity, not just with 3P, but in monetizing more of our platform. You know, we really brought those in to round out gaps in our auction and the markets where we were already monetized, and then to help us start monetizing in markets where we were completely unmonetized.

Speaker Change: So we continue to see those things as a steady build, and we think there's a lot more opportunity, not just with 3P, but in monetizing more of our platform. We really brought those into.

Speaker Change: Round out gaps in our auction and the markets where we were already monetized

William J. Ready: And so, you know, we see that as, you know, something that we'll be optimizing for quarters and years to go, and with a lot more of that opportunity still in front of us, even as we still feel really good about the progress that we've made and the steady build of that, you know, on each of those partnerships. Sorry, Mark, I didn't touch on the other part of your question on expanding those partnerships. Well, we don't have any more of those partnerships that we're, you know, talking about right now.

Speaker Change: And then to help us start monetizing in markets where we were completely unmonetized. And so, you know, we see that as, you know, something that we'll be optimizing for quarters and years to go. And with a lot more of that opportunity still in front of us, even as we still feel really good about the progress that we've made, and the steady build of that, you know, on each of those partnerships.

Bill Ready: All right, next one comes from the other part of your question. Sorry, Mark, I didn't hit the other part of your question while expanding those partnerships, but we don't have any more of those partnerships that we're, you know, talking about right now. We're going to continue to look for how we round out gaps in the auction and, you know, maybe one final nugget I'll give is on our resellers. So, as we talked about monetizing international, we talked about how that would be not just with 3P, but also with resellers. We're seeing those resellers start to ramp; you know, we're early days and that we're seeing them start to ramp and contribute.

Speaker Change: Our next question comes from a stranger. The other part of your question...

Speaker Change: Sorry, Mark, I didn't hit the other part of your question about expanding those partnerships. While we don't have any more of those partnerships that we're, you know, talking about right now, we're going to continue to look for how we round out gaps in the auction. And, you know, maybe one final nugget I'll give is on our resellers. So as we talked about monetizing international, we talked about how that would be not just with

William J. Ready: We're going to continue to look for ways to round out gaps in the auction. And, you know, maybe one final nugget I'll give you is on our resellers. So as we talked about modernizing international, we talked about how that would be not just with 3P but also with resellers. We're seeing those resellers start to ramp up. You know, we're in the early days of that.

Speaker Change: 3P but also with resellers. We're seeing those resellers start to ramp, you know, we're early days in that, we're seeing them start to ramp and contribute and we're actually seeing some synergies between the resellers and the 3P partnerships where

William J. Ready: We're seeing them start to ramp up and contribute, and we're actually seeing some synergies between the resellers and the 3P partnerships where for some of those resellers, as they're bringing advertisers in, the fact that they can buy from us through Google Ads Manager, where they already have an integration is, you know, creating some synergies between the 3P and the resellers in the 1P business. You know, as we think about, you know, advertisers that, you know, are still thinking of us directly but are now seeing an easier path to, you know, make that purchase through an existing integration. So, again, I feel really good about the progress. It continues to sort of build sequentially quarter on quarter.

Bill Ready: And we're actually seeing some synergies between the resellers and the 3P partnerships where not for some of those resellers, as they bring advertisers in, the fact that they can buy from us through Google Ads Manager, where they already have an integration, is, you know, creating some synergy between the 3P and the resellers and the 1P business, you know, as we think about, you know, advertisers that, you know, are still thinking of us directly, but now seeing an easier path to, you know, make that purchase through an existing integration. So, again, you know, feel really good about the progress.

Speaker Change: For some of those resellers, as they're bringing advertisers in, the fact that they can buy from us through Google Ads Manager, where they already have an integration, is creating some synergy between the 3P and the resellers in the 1P business.

Speaker Change: as we think about advertisers that are still thinking of us directly, but now seeing an easier path to make that purchase through an existing integration. So again, feel really good about the progress. It continues to sort of build sequentially quarter on quarter, and we think there's a lot more of that ahead of us.

Bill Ready: It continues to sort of build sequentially quarter on quarter, and we think there's a lot more of that ahead of us.

Rich Greenfield: Our next question comes from Rich Greenfield with LightShap Partners. Your line is out. Hi. Thanks for taking the question, Bill. Julia, you spent the tremendous amount of time improving the product that Pinterest, making it more useful and thoughtful as you talked about. I guess we get a question sort of, why is that not translating into a meaningful acceleration in US users? You know, you're up a hair from where you ended last year, but given the product improvements, I guess what's the, how do we sort of reconcile those two things? Are you seeing a meaningful, meaningful increase in time spent per US user per week or per month, meaning you're seeing it more in engagement rather than overall growth and users?

William J. Ready: And we think there's a lot more of that ahead of us. Our next question comes from Richard Greenfield with Lightship Partners. Your line is now open.

Speaker Change: Our next question comes from Richard Greenfield with Lightship Partners. Your line is now open.

Richard Scott Greenfield: Thanks for taking the question, Bill and Julia. You spent a tremendous amount of time improving the product at Pinterest, making it more useful and shoppable, as you talked about. I guess we get a question sort of, why is that not translating into a meaningful acceleration in US users? You know, you're up a hair from where you ended last year, but given the product improvement, I guess, what's the, how do we sort of reconcile those two things?

Richard Scott Greenfield: Hi, thanks for taking the question, Bill and Julia. You spent a tremendous amount of time improving the product at Pinterest, making it more useful and shopful, as you talked about.

Richard Scott Greenfield: I guess we get a question sort of, why is that not translating into a meaningful acceleration in U.S. users? You know, you're up a hair from where you ended last year, but given the product improvements, I guess...

Richard Scott Greenfield: Are you seeing a meaningful increase in time spent per US user per week or per month, meaning you're seeing it more in engagement rather than overall growth in users? And sort of, I know this is sort of a related question, but you keep talking about how younger users, I think, since you joined, are your fastest growing segment. If overall users are relatively flattish, does that mean you're losing older users, meaning younger is replacing older? I just would love to understand sort of what's happening in terms of the overall mix of users. It would be great. Yeah, yeah, thanks, Rich.

Speaker Change: What's the, how do we sort of reconcile those two things?

Speaker Change: Are you seeing a meaningful increase in time spent per U.S. user per week or per month? Meaning you're seeing it more in engagement rather than overall growth in users?

Bill Ready: And sort of, I know this is sort of a related question, but you keep talking about how younger users, I think, since you joined, how younger users are your fastest growing segment. If overall users are relatively flatish, does that mean you're losing older users, meaning younger is replacing older? Just would love to understand sort of what's happening in terms of the overall mix of users would be great. Thanks. Yeah. Thanks, Rich.

Speaker Change: And sort of, I know this is sort of a related question, but you keep talking about how younger users, I think, since you joined, how younger users are your fastest growing segment.

Speaker Change: If overall users are relatively flattish, does that mean you're losing older users, meaning younger is replacing older? I just would love to understand sort of what's happening in terms of the overall mix of users would be great.

William J. Ready: So, you know, I've been pretty consistent on this since I got here that in mature markets like the US, the story was much more about growing depth of engagement with users. And, you know, to my comments earlier in the Q&A, we're seeing really, really encouraging signs there around depth of engagement. We've been talking about that consistently.

Bill Ready: So, you know, I've been pretty consistent on this from, you know, since I got here that in mature markets like the US, that really the story was much more about growing depths of engagement with users. And, you know, to my comments earlier in the Q&A, you know, we're seeing really, really encouraging signs there around depths of engagement. We've been talking about that consistently. We see that continue to happen with, you know, as I mentioned, the out of mal ratio continuing to be to improve. Now, I think it's really noteworthy if you think about that, you know, we're bringing on new users to the platform at record levels.

Speaker Change: Yeah.

Speaker Change: Yeah, thanks, Rich. So, you know, I've been pretty consistent on this from, you know, since I got here that in mature markets like the US, that really the story was much more about growing depth of engagement with users.

Speaker Change: and, you know, to my comments earlier in the Q&A.

Speaker Change: We're seeing really, really encouraging signs there around depth of engagement. We've been talking about that consistently. We see that continue to happen with, as I mentioned, the wow to mal ratio continuing to improve. And I think it's really noteworthy, if you think about that, we're bringing on

William J. Ready: We see that continue to happen with, you know, as I mentioned, the wow to mal ratio continuing to improve. And I think it's really noteworthy if you think about that, you know, we're bringing in new users to the platform at record levels. And so normally, when you're bringing in, you know, record levels of new users, that would be dilutive to your engagement per user because new users may be somewhat more marginally engaged or more peripheral, as you have your early adopters, you know, that were sort of your power users.

Bill Ready: And so, normally when you're bringing on, you know, record level of new users, that would be dilutive to your engagement per user because new users may be somewhat more marginally engaged or more peripheral, as you got your early adopters, you know, that were sort of your power users. The fact that we're, you know, not only bringing on record numbers of new users, but also deeply engaging per user while doing that, I think is exactly to that point of like it's really about depths of engagement with users. And particularly, you know, as I shared earlier in my commentary, you know, we see that the depths of engagement is really occurring in exactly the ways that we wanted it to, where the curation signal that lets us help users through their shopping, you know, help users navigate through their shopping journey, where they're deciding what to buy.

Speaker Change: New users to the platform at record levels.

Speaker Change: And so normally when you're bringing on record levels of new users, that would be dilutive to your engagement per user because new users may be somewhat more marginally engaged or more peripheral as you got your early adopters that were sort of your power users. The fact that we're not only bringing on record numbers of new users, but also deepening engagement per users while doing that, I think is exactly to that point of like it's really about depth of engagement with users.

William J. Ready: The fact that we're, you know, not only bringing on record numbers of new users, but also deepening engagement per users while doing that, I think is exactly to that point of like, it's really about depth of engagement with users. And particularly, you know, as I shared earlier in my commentary, you know, we see that that depth of engagement is really occurring in exactly the ways that we wanted it to, where the curation signal that lets us help users through their shopping, you know, help users navigate through their shopping journey where they're deciding what to buy, we see the curation behaviors deepening, and then clicks is a major place that we see deepening, which has, as you know, had previously been a bit of an Achilles heel to platform, that's now becoming a real strength for us.

Speaker Change: And particularly, you know, as I shared earlier in my commentary, you know, we see that that depth of engagement is really occurring in exactly the ways that we wanted it to, where the curation signal that lets us help users through their shopping, you know, help users navigate through their shopping journey where they're deciding what to buy, we see the curation behaviors deepening, and then clicks is a major place that we see deepening, which has, as you know, had previously been a bit of an Achilles heel to the platform, that's now becoming a real strength for us where we're you know, doubling the number of clicks we send advertisers year on year, which just means more users are finding more of what they're looking for on the platform.

Bill Ready: We see the curation behavior is deepening. And then clicks is a major place that we see deepening, which is because, as you know, had previously been a bit of an Achilles heel to platform, that's now becoming a real strength for us, where we're, you know, doubling the number of clicks we send to advertisers a year on year, which just means more users are finding more of what they're looking for on the platform.

William J. Ready: We're, you know, doubling the number of clicks we send to advertisers year on year, which just means more users are finding more of what they're looking for on the platform. So, you know, all those things, I think, are very positive dynamics. And then to your specific question around, you know, okay, if Gen Z is growing, are we losing others?

Bill Ready: So, you know, all those things that you're very positive dynamics, and then to your specific question around, you know, OK, if Gen Z is growing, are we losing, you know, others? I've shared this last quarter; it's true again this quarter that we are growing across every demographic that we track and across every geography that we track. So, our strength of users is really broad-based, and really directly tied to the improvements we've made to the platform around, you know, AI-driven relevancy recommendations, and then the action ability and curation on the platform. I hope that helps.

Speaker Change: So, you know, all those things I think are very positive dynamics and then to your specific question.

Speaker Change: around, you know, okay, if Gen Z is growing, are we losing, you know, others?

William J. Ready: I shared this last quarter, and it's true again this quarter that we are growing across every demographic that we track and across every geography that we track. So, our strength with users is really broad and really directly tied to the improvements we've made to the platform around, you know, AI-driven relevancy of recommendations, and then the actionability and curation on the platform. I hope that helps. Our next question comes from Doug Anmuth with J.P. Morgan. Your line is now open.

Speaker Change: I've shared this last quarter, it's true again this quarter, that we are growing across every demographic that we track.

Speaker Change: and across every geography that we track. So, our strength with users is really broad-based and really directly tied to the improvements we've made to the platform around, you know, AI-driven relevancy recommendations and then the actionability and curation on the platform. Hope that helps.

Doug Ameth: Our next question comes from Doug Ameth, with JP Morgan. Your line is out open. Thanks for taking a question.

Speaker Change: Our next question comes from Doug Anmuth with J.P. Morgan. Your line is now open.

Douglas Till Anmuth: Thanks for taking the question. When you think about all the ways you've improved the ad stack and your tools for advertisers, where do you see the biggest opportunity to close that gap between value creation and value capture? And how much visibility do you think you have in that shift, particularly in a potentially tougher macro environment? Thanks.

Doug Ameth: When you think about all the ways you've improved the ad-sack and your tools for advertisers, where do you see the biggest opportunity to close that gap between value creation and value capture, and how much visibility do you think you have in that shift, particularly in a potentially tougher macro environment? Thanks. You know, I'd say on the visibility of it, like, you know, we know it's, we've been talking pretty consistently about, you know, even your driving performance. It's only as good as what the advertisers are able to see and measure, and so, you know, measurement has been a really big focus for us; it continues to be. If you think about Pinterest's history as, you know, primarily more of an upper funnel platform, you know, it would make sense that a lot of those advertisers hadn't implemented, you know, lower funnel measurement tools with us.

Douglas Till Anmuth: Thanks for taking the question. When you think about all the ways you've improved the ad stack and your tools for advertisers.

Douglas Till Anmuth: Where do you see the biggest opportunity to close that gap between value creation and value capture, and how much visibility do you think you have in that shift, particularly in a potentially tougher macro environment? Thanks.

William J. Ready: You know, I'd say on the visibility of it, like, you know, we know it's, we've been talking pretty consistently about, you know, even if you're driving performance, it's only as good as what the advertisers are able to see and measure. And so, you know, measurement has been a really big focus for us and continues to be. If you think about Pinterest's history as, you know, primarily more of an upper funnel platform, it would make sense that a lot of those advertisers hadn't implemented, you know, lower funnel measurement tools with us.

Speaker Change: You know I'd say on the visibility of it like

Speaker Change: [inaudible]

Speaker Change: We know it's we've been talking pretty consistently about, you know, even if you're driving performance, it's only as good as what the advertisers are able to see and measure. And so, you know, measurement has been a really big focus for us continues to be, if you think about Pinterest's history as, you know, primarily more of an upper funnel platform, you know, it would make sense that a lot of those advertisers hadn't implemented, you know, lower funnel measurement tools with us.

Bill Ready: You know, it's really been, you know, we're less than a year in with direct links. You know, so less than a year into that, we've made really good progress in getting more advertisers to adopt that measurement, but we see a lot more of it ahead, and to your point of visibility, you know, we're tracking it all the way down to the count level, and, you know, sales teams are not only looking at account by account, our sales reps have been trained on it, their gold on it. And so, you know, we feel like we've got pretty good visibility to what's driving that adoption, as well as, you know, responding to advertisers' feedback of things that will make it easier for them to adopt, especially as you get to the smaller advertisers, where, you know, I talked about in my comments, you know, on the last couple calls that, you know, we launched our API for conversions, you know, a little more than a year ago, and, you know, that's all really successful, successful rollout with, you know, large advertisers.

William J. Ready: You know, it's really been, you know, we're less than a year in with direct links, you know, so less than a year into that, we've made really good progress in getting more advertisers to adopt that measurement. But we see a lot more of it ahead, and to your point of visibility, you know, we're tracking it all the way down to the account level, and, you know, sales teams are not only looking at it account by account; our sales reps have been trained on it, and they're gold on it.

Speaker Change: Um, you know, it's really been, you know, we're less than a year in with direct links.

Speaker Change: You know, so less than a year into that, we've made really good progress and getting more advertisers to adopt that measurement.

Speaker Change: But we see a lot more of it ahead. And to your point of visibility, you know, we're tracking it all the way down to the account level. And, you know, sales teams are not only looking at it account by account.

William J. Ready: And so, you know, we feel like we've got pretty good visibility into what's driving that adoption as well as, you know, responding to advertiser feedback of things that will make it easier for them to adopt, especially as you get to the smaller advertisers, where, you know, I talked about in my comments on the last couple calls that, you know, we launched our API for conversions a little more than a year ago. And, you know, that saw a really successful rollout with, you know, large advertisers. As we went to take that more broadly, you know, we saw a need to meet advertisers where they were, integrate with the third-party tools that they were using, and clean rooms and the like.

Speaker Change: Our sales reps have been trained on it, they're gold on it, and so we feel like we've got pretty good visibility to what's driving that adoption, as well as responding to advertiser feedback of things that will make it easier for them to adopt, especially as you get to the smaller advertisers.

Speaker Change: where you, I talked about in my comments, you know, on the last couple of calls.

Speaker Change: that, you know, we launched our API for conversions.

Speaker Change: You know, a little more than a year ago.

Speaker Change: And, you know, that's all really successful rollout with, you know, large advertisers. As we went to take that more broadly, you know, we saw a need to meet advertisers where they were, integrate to the third-party tools that they were using, clean rooms and the like. So you've heard us talking about more partnerships with third-party measurement platforms, more partnerships with clean rooms. So as we're doing that, we're seeing that's really helping us make.

Bill Ready: As we went to take that more broadly, you know, we saw a need to meet advertisers where they were, integrate to the third party tools that they were using, clean rooms and the like. So, you've heard us talking about more partnerships with third party measurement platforms, more partnerships with clean rooms. So, as we're doing that, we're seeing that's really helping us make, you know, broad progress with retailers and advertisers, particularly lower funnel advertisers, that, you know, we're making it easier for them to adopt the measurement, so they can see the value. When they see that come through in their measurement, then we see them shifting budgets, and, you know, again, we think there's a lot more that ahead.

William J. Ready: So, you've heard us talking about more partnerships with third-party measurement platforms, and more partnerships with clean rooms. So, as we do that, we're seeing that's really helping us make, you know, broad progress with retailers and advertisers, particularly lower funnel advertisers that we're making it easier for them to adopt measurement so they can see the value. When they see that come through in their measurement, then we see them shifting budgets.

Speaker Change: You know, broad progress with retailers and advertisers, particularly lower funnel advertisers that, you know, are making it easier for them to adopt the measurement so they can see the value. When they see that come through in their measurement, then we see them shifting budgets.

William J. Ready: And, you know, again, we think there's a lot more of that ahead. And then finally, on performance plus, there's the other side of that, which is just the campaign creation and the creative optimization where, if you think about Pinterest as, you know, a smaller player in the overall ad market, if you go to, you know, some of these advertisers and say, oh, well, if you implement measurement with us, and if you do some campaign setup, we can drive good performance for you, but Well, now we're able to point to the fact that we have, you know, the largest, most sophisticated advertisers getting really great performance from us. We're getting into their always-on budgets, their performance budgets.

Bill Ready: And then finally, on Performance Plus, there's the other side of it, which is just the campaign creation and the creative optimization where, if you think about Pinterest as, you know, a smaller player in the overall ad market, if you go to, you know, some of these advertisers and say, oh, well, hey, if you implement measurement, you know, with us. And if you do some campaign set up, we can drive good performance for you, but we're low single-digit percentage points of your total, you know, total spend. You know, that's a harder conversation to get people to adopt.

Speaker Change: And, you know, again, we think there's a lot more of that ahead. And then finally on Performance Plus, there's the other side of that, which is just the campaign creation and the creative optimization where.

Speaker Change: If you think about Pinterest as, you know, you know, a smaller player in the overall ad market, if you go to, you know, some of these advertisers and say, Oh, well, hey, if you implement measurement, you know, with us,

Speaker Change: And if you do some campaign setup, we can drive good performance for you. But we're low single digit percentage points of your total, you know, total spend, you know, that's a harder conversation to get people to adopt. Well, now we're able to point to the fact that we have

Bill Ready: Well, now we're able to point to the fact that we have, you know, the largest and most sophisticated advertisers getting really great performance from us. We're getting into, they're always on budget, the performance budgets. You know, I shared in our last call, getting to, you know, 5, 10% of ads spend for some of these really large sophisticated retailers, as we're, as we're now able to point to that and say, not only can you have that kind of performance, but we're making it easier for you to measure because we're integrating to your measurement tools, and now with Performance Plus, we're going to solve the other side of this and make it easier for your campaign creation and campaign optimization and creative optimization.

Speaker Change: You know, the largest, most sophisticated advertisers getting really great performance from us. We're getting into their always-on budgets, their performance budgets. You know, I shared in our last call getting the, you know, 5%, 10% of ad spend for some of these really large, sophisticated retailers. As we're now able to point to that and say, not only can you have that kind of performance, but we're making it easier for you to measure because we're integrating to your measurement tools. And now with Performance Plus, we're going to solve the other side of this and make it easier for your campaign creation and campaign optimization and creative optimization. We think these are all things that are responding to that advertiser feedback that we've been getting account by account and making it so that, you know, we have clear line of sight to that value capture continuing to play out, even though it's still something to think about.

William J. Ready: You know, I shared in our last call that we're getting the, you know, 5%, 10% of ad spend for some of these really large, sophisticated retailers. And as we're now able to point to that and say, not only can you have that kind of performance, but we're making it easier for you to measure because we're integrating with your measurement tools. And now, with Performance Plus, we're going to solve the other side of this and make it easier for your campaign creation, campaign optimization, and creative optimization.

William J. Ready: We think these are all things that are responding to that advertiser feedback that we've been getting account by account and making it so that, you know, we have a clear line of sight to that value capture continuing to play out, even though it's still something to think about over a multi-quarter period. Hope that helps. Our next question comes from Dan Salmon with New Street Research. Your line is now open. Great afternoon, everybody.

Bill Ready: We think these are all things that are responding to that advertiser feedback that we've been getting account by account and making it so that, you know, we have clear line of sight to that value capture continuing to play out, even though it's just still something to be about as over a multi-quarter period.

Unknown Executive: Hope that helps.

Speaker Change: over a multi-quarter period.

Dan Salmon: Our next question comes from Dan Salmon with New Street Research. It lies now open. Great.

Speaker Change: Hope that helps.

Speaker Change: Our next question comes from Dan Salmon with New Street Research. Your line is now open.

William J. Ready: Julia, I just wanted to follow up on your comment about the lower eCPMs from third parties. As you noted, these are, you know, smaller under-monetized markets that we're starting to step into. So that's not a big surprise.

Julia Donnelly: Good afternoon, everybody. Julia, I just wanted to follow up on your comment about the lower ECPMs from third parties. You know, as you know, these are, you know, smaller under monetized markets that we're starting to step into. So that's not a big surprise. Are those that pricing coming in sort of in line with your expectations so far?

Daniel Salmon: Great, good afternoon everybody. Julia, I just wanted to follow up on your comment about the lower eCPMs from third parties.

Daniel Salmon: You know, as you noted, these are, you know, smaller under monetized markets that we're starting to step into. So that's not a big surprise. But are those is that pricing coming in sort of in line with your expectations so far? And then just second,

Bill Ready: And then just second. Do you feel I can follow up just a little bit on performance plus? It sounds like you're starting to get into that next trunch already. Do you think that that next trunch will really have given it a solid test drive ahead of holiday season when your retail vertical be extra important? Thank you. Yeah.

Daniel Salmon: But is that pricing coming in sort of in line with your expectations so far? And then, just second, do you feel I can follow up just a little bit on performance? Plus, it sounds like you're starting to get into that next tranche already. Do you think that that next tranche will really give it a solid test drive ahead of the holiday season when your retail vertical will be extra important? Thank you. Yeah, maybe I'll take the last one first.

Speaker Change: Do you feel I could follow up just a little bit on Performance Plus?

Speaker Change: It sounds like you're starting to get into that next tranche already. Do you think that that next tranche will really have given it a solid test drive ahead of holiday season when your retail vertical will be extra important? Thank you.

William J. Ready: I just think that we've seen that continue to be a steady build. And so, you know, we think, you know, progress in retail, which started as one of our primary sources of strength, we see that continue to build in performance plus. It's early on, it's multi-quarter, but we've seen a start with the largest, most sophisticated retailers and advertisers, then we started to hit the next group down, we think performance plus will start to take it further down even than that.

Bill Ready: May I take the last one first? I just think that we've seen that continue to be a steady build. And so, you know, we think that progress and retail. We saw it as one of our primary sources of strength. We see that continue to build in, you know, performance plus it's early on. It's multi quarter. But we've seen it start with the largest, most sophisticated retailers and advertisers. Then we started to hit the next group down. We think Performance Plus will start to take it further down even that. But we think that sets us up well as we look into the future and look to continue that steady build within retail.

Speaker Change: Yeah.

Speaker Change: May I'll take the last one first. I just I think that we've seen that continue to be a steady build. And so, you know, we think, you know, that progress in retail, we started as one of our primary sources of strength, we see that continue to build in, you know, performance plus, it's early on, it's multi quarter, but we've seen a start with the largest, most sophisticated retailers and advertisers, then we started to hit the next group down, we think performance plus will start to take it further down even than that. But we think that sets us up well, as we look into the future, and look to the continued steady build within.

William J. Ready: But we think that sets us up well as we look into the future and look to continue that steady build within retail. Yeah, and on the first part of your question, though, on eCPMs, and so yes, it is generally coming in line with sort of where we expected for those rest of the world markets that just have a lower eCPM. I do think over time, as we continue to ramp those partnerships and add even more option density in those markets, we can expect those eCPMs to rise. But based on where we are right now, and based on the fact that they're just sort of lower TAM markets overall, we feel really pleased with sort of how those are initially ramping up.

Julia Donnelly: Yeah, and I think on your the first prior question though on ECPMs, and so yes, it is it is generally coming in line with sort of where we expected for those rest of world markets, such as have a lower ECPM. I do think over time as we continue to ramp those partnerships and add even more oxygen density in those markets, we can expect those ECPMs to rise. But based on where we are right now and based on the fact that they're to sort of lower TAM markets overall, we feel really pleased with those are how those are initially ramping.

Speaker Change: within retail.

Speaker Change: Yeah, I think on the first part of your question though on eCPMs, and so yes, it is generally coming in line with sort of where we expected for those rest of world markets that just have a lower eCPM. I do think over time as we continue to ramp those partnerships and add even more option density in those markets, we can expect those eCPMs to rise. But based on where we are right now and based on the fact that they're just sort of lower TAM markets overall, we feel really pleased with sort of how those are initially ramping.

Unknown Executive: All right, I think that's our last question, operator. All right, thanks again to all of you for joining the call and for your questions. We look forward to keeping this dialogue going.

Julia Brau Donnelly: All right, I think that's our last question, operator. All right. Thanks again to all of you for joining the call and for your questions. We look forward to continuing this dialogue. We hope you enjoy the rest of your day. That will conclude today's conference call. Thank you all for your participation. You may now disconnect your line.

Speaker Change: All right, I think that's our last question, operator.

Speaker Change: All right. Thanks again to all of you for joining the call and for your questions. We look forward to keeping this dialogue going. We hope you enjoy the rest of your day.

Unknown Executive: We hope you enjoy the rest of your day.

Unknown Executive: That will conclude the day's conference call. Thank you for your participation. You may now disconnect your line.

Speaker Change: That will conclude today's conference call. Thank you all for your participation. You may now disconnect your line.