Q3 2024 Summary
Published Feb 4, 2025, 11:28 PM UTC- Expansion of third-party partnerships, including with Amazon and Google, is expected to drive increased advertiser demand and revenue growth. Pinterest is significantly undermonetized relative to the commercial intent on the platform, indicating substantial growth opportunities.
- Strong growth in lower funnel revenue, which has been the fastest-growing part of the business for the past 3 quarters, driven by product innovation. Lower funnel revenue objectives now account for over 80% of spend with some of the largest advertisers, up significantly over the last two years. This momentum is expected to continue into 2025 and beyond. ,
- Proven effectiveness of AI-driven advertising tools and privacy-resilient measurement is leading to increased value capture. More than half of the revenue is now on privacy-resilient measurement, with more than two-thirds of lower funnel revenue adopting these tools, signaling further potential for revenue growth as more advertisers adopt these solutions. ,
- Ongoing softness among food and beverage advertisers is expected to continue into Q4, which may impact revenue growth in that category.
- European revenue growth decelerated from 25% in Q2 to 20% in Q3, indicating potential slowing momentum in international markets.
- Adoption of new lower funnel products like Performance Plus has multi-quarter adoption cycles, with value capture beginning in 2025, suggesting benefits may not fully materialize in the near term.
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue | Q3 2024 | $885 million to $900 million | $898.4 million | Met |
YoY Growth | Q3 2024 | 16% to 18% | 17.7% (calculated from 763.2 millionTo 898.4 million) | Met |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Expansion of third-party partnerships (Amazon, Google) | Discussed in Q4 2023, Q1 2024, and Q2 2024, highlighting Amazon filling auction gaps and Google focusing on international monetization. Partnerships ramping steadily and seen as a significant revenue driver. | Expanded Amazon partnership into Canada and Mexico; Google partnership continues in undermonetized regions. Both are still ramping and contributing to revenue growth. | Recurring topic with positive momentum, driven by international expansion and ongoing ramp-up. |
Under-monetization relative to commercial intent | Mentioned across Q4 2023, Q1 2024, and Q2 2024 as a key opportunity to match user intent with advertisers, noting significant room to grow in leveraging high-intent users. | William Ready reiterated that Pinterest is still significantly under-monetized relative to commercial intent, focusing on AI tools and partnerships to drive more demand. | Recurring theme with continued focus on capturing advertiser demand for high-intent users. |
Lower-funnel advertising solutions and Performance Plus | Q4 2023, Q1 2024, and Q2 2024 documents highlighted growing adoption of Direct Links, mobile deep linking, and Conversion API, plus early Performance Plus results with improved ROAS and CPC. | Lower-funnel solutions remained the fastest-growing segment, with official Performance Plus launch yielding a 10% CPA improvement. Adoption is early but expected to grow in 2025. | Recurring topic showing strong momentum and more budget allocation toward lower-funnel tools. |
AI-driven and privacy-resilient measurement tools | Emphasized in Q4 2023, Q1 2024, and Q2 2024 as critical for advertisers, including Conversion API, clean rooms, and AI-driven personalization. | Over half of total revenue and two-thirds of lower-funnel revenue come from advertisers using privacy-measurement tools; AI is central to platform personalization and Performance Plus. | Recurring with expanded adoption; key for performance improvements and future growth. |
Softness in food and beverage advertising | Mentioned in Q4 2023 with a tail-off in December; continued softness noted in Q2 2024. | Pinterest still sees softness in the food and beverage subsector, offsetting growth in other verticals. | Recurring challenge** with no improvement in advertiser spending sentiment so far. |
International expansion and revenue growth deceleration | Discussed in Q4 2023, Q1 2024, and Q2 2024 with emphasis on expanding to undermonetized markets but facing slight growth deceleration. | Reported 18% YoY growth; mild deceleration forecast (15–17% growth for Q4), citing continued softness in CPG. | Recurring: steady expansion internationally, but mild deceleration persists. |
Shifts in user growth dynamics (flat in US, Gen Z rising) | Q4 2023, Q1 2024, and Q2 2024 highlight modest US/Canada user growth but rising engagement, especially among Gen Z. | No direct mention of flat US MAUs; noted 11% overall MAU growth and strong Gen Z shopping intent (66% of weekly Gen Z Pinners start shopping there). | Recurring topic with strong Gen Z engagement, less emphasis on US flatness. |
Cookie deprecation concerns | Addressed in Q1 2024 as an upcoming industry shift but not mentioned later. | No mention. | No longer mentioned after Q1 2024. |
Increasing R&D and sales/marketing spend impacting margins | Mentioned in Q4 2023, Q1 2024, and Q2 2024 as investments in AI, talent, and global selling teams, yet margins still expanded due to cost discipline. | Continued R&D and marketing investments but adjusted EBITDA margin rose to 27% in Q3, reflecting disciplined expenses. | Recurring spending increases but margins continue to improve via disciplined expense management. |
Tougher comparables in the second half of 2024 | Referenced in Q1 2024 and Q2 2024 as a challenge due to prior-year growth and margin gains. | Noted more challenging year-over-year comparisons but still saw margin expansion in Q3 2024. | Recurring mention, with no major change in sentiment—still cautious about year-over-year comps. |
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2025 Growth Outlook and Guidance
Q: How is the revenue growth outlook for 2025?
A: Management is confident about revenue growth in 2025, expecting lower funnel strength to continue into Q4 and beyond. Excluding food and beverage, which faces macro headwinds, revenue grew in the low 20% range in Q3. They anticipate ongoing gains from lower funnel revenue growth and new products like Performance Plus, which should compound gains into 2025 and beyond. -
Performance Plus Impact on Growth
Q: How will Performance Plus contribute to 2025 growth?
A: Performance Plus, launched in October, is expected to drive revenue growth in 2025 as adoption increases. Early results show 50% fewer inputs to set up campaigns and over 20% CPA improvement, attracting midsized advertisers. As more advertisers adopt Performance Plus, it should lead to greater share of wallet and more ad inventory on the platform. -
Value Capture from Increased Clicks
Q: What hurdles exist in capturing value from increased clicks?
A: While Pinterest has doubled clicks to advertisers for four consecutive quarters, capturing value requires advertisers to implement privacy-resilient measurement. Over half of the revenue now uses such measurement, but there's still room to grow. As advertisers adopt better measurement tools, Pinterest expects further budget shifts and monetization. -
Ad Load and Monetization Potential
Q: How are you balancing ad load and engagement?
A: Pinterest sees significant headroom to increase ad load, currently at a fraction of potential monetization. Delivering more relevant ads allows higher ad load without harming engagement, as shown by improving weekly active to monthly active ratios and deepening user engagement. -
User Engagement and Actionability
Q: How is user engagement trending, especially in shoppable actions?
A: User engagement continues to deepen, with actionability like sessions with curation and clicks driving an increasing share. Mature markets have the highest engagement per MAU, especially in the U.S. and Canada. The shift to search-related use cases means improved weekly active to monthly active ratios indicate better engagement. -
Amazon and Google Partnerships Progress
Q: How are the Amazon and Google partnerships progressing?
A: These partnerships are building sequentially, with Amazon expanding to Canada and Mexico. In Rest of World markets, both Google partnerships and resellers contribute to growth, though it's still early days. -
Advertiser Growth and Share of Wallet
Q: What is the contribution from new advertisers to growth?
A: Pinterest is seeing growth in the total number of active advertisers and increased share of wallet, particularly among enterprise accounts. Tools like Performance Plus help attract midsized advertisers, broadening adoption and spend on the platform. -
Rest of World Growth
Q: How is international advertiser spending trending?
A: Rest of World regions show good acceleration both quarter-over-quarter and year-over-year, driven by ongoing partnerships and early contributions from third-party demand. Though early, international markets benefit from partnerships with Google and resellers. -
Third-Party Partnership Expansion
Q: Will you expand third-party partnerships?
A: Pinterest intends to work with multiple partners, having built the platform to ingest third-party demand. While no new partnerships are announced now, they expect to add more to bring more advertiser demand and fill gaps in auctions. -
User Engagement Metrics in UCAN
Q: Is time spent per user growing in the U.S. and Canada?
A: Time spent per user isn't the focus due to the shift to search-related use cases, where quicker results are better. Depth of engagement is measured by improving weekly active to monthly active ratios, indicating users returning more frequently.