Q4 2024 Summary
Published Mar 7, 2025, 1:10 AM UTC- Strong Revenue Growth and Positive Outlook: Pinterest more than doubled its revenue growth rate from 9% in 2023 to 19% in 2024, achieving its first $1 billion revenue quarter in Q4 2024. The company expects continued growth, guiding 15% to 17% constant currency revenue growth for Q1 2025, indicating confidence in the sustainability of its revenue trajectory.
- Increasing User Base and Deepening Engagement: Pinterest reached a record high of 553 million global Monthly Active Users (MAUs) in Q4 2024, growing 11% year-over-year. The Weekly Active Users (WAUs) to MAUs ratio reached an all-time high of 62%, signifying deeper user engagement. This is driven by AI-powered recommendations, curation features, and increased actionability, which resonate particularly with Gen Z, the platform's largest and fastest-growing audience.
- Success of Lower-Funnel Ad Products and Advertiser Value Creation: Pinterest's focus on lower-funnel ad products is driving significant advertiser value, evidenced by over 90% growth in clicks to advertisers year-over-year in Q4 2024. The newly launched Performance+ product has shown promising initial results, including a 20% improvement in CPA for advertisers and a 50% reduction in inputs required to create campaigns. These initiatives are expected to yield continued growth as they mature over a multiyear product cycle.
- Continued softness in the food and beverage category is still a headwind for revenue growth, and it's too early to say the headwind is fully behind us. Julia Donnelly mentioned that while they are seeing early signs of improvement, challenges remain in this sector, which is expected to continue impacting top-line revenue.
- Key ad product innovations like Performance+ are in early stages and will require multi-year adoption cycles, potentially delaying significant revenue impact. William Ready emphasized that Performance+ is at the beginning of a multi-year product cycle, with more opportunity ahead, suggesting that substantial gains may not materialize in the near term.
- Revenue growth is decelerating, with Q1 2025 guidance of 13% to 15% growth (or 15% to 17% on a constant currency basis) compared to 18% growth in Q4 2024, indicating potential slowing momentum.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | Q1 2025 | no prior guidance | $837M–$852M, 13%–15% y/y or 15%–17% on a constant currency basis | no prior guidance |
Adjusted EBITDA | Q1 2025 | no prior guidance | $155M–$170M | no prior guidance |
Non-GAAP Cost of Revenue Expense | Q1 2025 | no prior guidance | Relatively consistent with Q4 2024 | no prior guidance |
Foreign Exchange Impact | Q1 2025 | no prior guidance | 2-point headwind | no prior guidance |
Margin Expansion | Q1 2025 | no prior guidance | Expected margin expansion in 2025, at a lower rate than the +510 bps achieved in 2024 | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Revenue Growth Dynamics | Q1 showed the fastest revenue growth with 23% YoY driven by lower‐funnel initiatives. Q2 demonstrated strong global performance at $854M with 21% growth. Q3 maintained steady revenue momentum with an 18% YoY increase driven by lower‐funnel and geographic expansion. | Q4 reported robust revenue performance with 19% growth, notable geographic gains (e.g. Rest of World up 44–53%), and strong lower‐funnel tool contributions. | Consistent strong performance with further acceleration due to enhanced lower‐funnel innovation and geographic diversification. |
Future Guidance | Q1 guidance projected 18–20% YoY growth for Q2 ; Q2 provided guidance for Q3 with 16–18% growth ; and Q3 forecasted Q4 revenue growth at 15–17%. | Q4 guidance for Q1 2025 expects revenue of $837–$852M with 13–15% reported growth (15–17% on constant currency), factoring in a 2-point FX headwind. | While still optimistic, future guidance now factors in increased FX headwinds, reflecting a slight moderation compared to earlier periods. |
Lower-Funnel Advertising Innovation | Q1 emphasized direct links boosting lower‐funnel revenue to 97% and significant click increases. Q2 introduced the Performance Plus suite with better cost per acquisition. Q3 highlighted mobile deep linking and Direct Links driving double-digit outbound click growth. | Q4 spotlighted the Performance+ launch with a 20% CPA improvement, further automation, and advanced features yielding compounding benefits. | Ongoing rollout and refinement of lower‐funnel tools continue to boost advertiser performance with steadily positive sentiment. |
Multi-Year Adoption | Q1 noted a multi-quarter adoption curve with anticipation for gradual value capture. Q2 described Performance Plus’s expected multi-quarter ramp. Q3 reiterated the long adoption cycle with successive compounding benefits. | Q4 reinforced a multi-year product cycle for Performance+, emphasizing steady, non–“hockey stick” growth with continuous enhancements and advertiser feedback. | Long-term, steady adoption with compounding improvements over time, confirming a sustained opportunity for future growth. |
AI-Driven Advertising and Personalization Strategy | Q1 highlighted integration of large language models, proprietary signals, and AI-based automation to boost personalization. Q2 introduced Performance Plus creative using generative AI, along with improved ad relevance. Q3 emphasized AI to double ad relevance, improve personalized recommendations, and drive actionable engagement. | Q4 showcased deep AI integration across the platform via its Taste Graph, upgraded ad relevance, and automated lower‐funnel solutions, further lifting performance metrics. | Continued commitment to leveraging and deepening AI integration, resulting in enhanced personalization and ad performance across all user segments. |
User Engagement Metrics | Q1 reported a record 518M MAUs and strong engagement increases. Q2 observed improved WAU/MAU ratios and doubled outbound clicks. Q3 noted steady gains in weekly engagement and higher actionable metrics with deeper user interaction. | Q4 achieved its highest-ever WAU-to-MAU ratio of 62%, with ad impressions up 43% and outbound clicks surging over 90% YoY, underscoring deepening engagement. | Consistent improvement and deepening user engagement with record metrics, indicative of a healthy and increasingly active user base. |
Audience Growth | Q1 reported global MAUs of 518M with a 12% YoY increase. Q2 reached a record high of 522M MAUs; Q3 recorded 537M MAUs with steady regional growth. | Q4 reached 553M MAUs globally with notable regional gains and strong contributions from Gen Z, reinforcing overall growth. | Robust and continuous growth across geographies, driven by increased adoption among key demographics such as Gen Z. |
International Expansion | Q1 emphasized initial opportunities abroad with expanded shopping tools. Q2 focused on ramping up third-party ad demand in under-monetized markets. Q3 expanded reseller partnerships across 30 markets to boost international revenue. | Q4 highlighted strong international performance with Rest of World revenues up 44–53% and further scaling of third-party partnerships to support global growth. | Ongoing expansion internationally with accelerating momentum in emerging markets, poised to have a large long-term impact. |
Currency Headwinds | Q1 noted FX changes contributed roughly 1 percentage point improvement; Q2 observed the first FX headwind of 1 point impacting guidance ; Q3 mentioned minimal FX impact for that quarter. | Q4 guidance for Q1 2025 now factors in a more significant 2-point FX headwind, indicating increased currency headwind pressures. | Increased currency headwinds relative to earlier periods, adding pressure to growth guidance. |
Third-Party Partnerships and Integrations | Q1 mentioned emerging contributions from Amazon Ads and Google partnerships, setting the stage for further integration. Q2 ramped up third-party demand to complement the first-party business and fill auction gaps. Q3 described expanded reseller partnerships across 30 markets and increasing integration with third-party systems. | Q4 continued scaling these partnerships—with expanded use of Amazon Ads, Google integrations, and resellers across 30 markets to further enhance auction density and revenue growth. | Consistent strategic expansion of third-party demand, reinforcing its critical role in complementing first-party monetization with positive long-term outlook. |
Food & Beverage Advertising Softness | Q2 noted softness among food and beverage advertisers due to broader CPG headwinds. Q3 confirmed the ongoing softness in the food and beverage subsector amidst industry challenges. | Q4 reiterated that food and beverage advertising softness persists, though very early signs of improvement may be on the horizon in Q1 2025. | Persistent challenge in the food & beverage category, with slight early improvement signals; remains a drag on overall performance. |
Measurement Innovations and Privacy-Resilient Solutions | Q1 promoted the adoption of a conversions API, integration with clean rooms, and expanding measurement tool integrations (covering nearly 40% of revenue). Q2 continued efforts to ease onboarding with third-party integrations and robust training. Q3 emphasized privacy-centric measurement adoption that now covers over half of total revenue and drives improved ROI. | Q4 provided only a brief mention of privacy-safe measurement as part of a broader value capture strategy, with fewer specific details compared to previous periods. | Although detailed discussion has receded in Q4, the focus on privacy-resilient measurement remains, suggesting a strategic priority that may be further detailed in future updates. |
Cookie Deprecation Impact on Targeting and Measurement | Q1 addressed uncertainties around cookie deprecation with confidence in their unique first-party signals, and noted preparations for decreased reliance on third-party cookies. | Q2, Q3, and Q4 did not mention cookie deprecation, indicating a reduction in emphasis on this topic in later periods. | The issue has diminished in prominence after Q1, suggesting that it has become a less central concern or is being effectively managed, thereby reducing negative sentiment. |
Increased Investment Impact on Profitability and Margins | Q1 reported strong margin expansion with adjusted EBITDA improvements and noted increasing R&D investments. Q2 emphasized margin expansion of 600 basis points despite rising operating expenses driven by investments in AI and growth initiatives. Q3 highlighted continued operating expense increases alongside significant adjusted EBITDA margin gains. | Q4 reported a roughly 50% YoY increase in adjusted EBITDA with margins expanding by 510 basis points, along with GAAP profitability achieved for the first time since 2021. | Consistent strategic investments continue to drive robust profitability improvements and margin expansion, reinforcing the company’s commitment to profitable growth. |
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Q1 2025 Revenue Outlook
Q: What are the drivers behind Q1 '25 revenue guidance?
A: The company expects Q1 revenue to grow 15% to 17% on a constant currency basis, following an 18% growth in Q4. This guidance factors in continued performance across lower and upper funnel initiatives, a 90% year-over-year increase in clicks to advertisers in Q4 , and early signs of improvement in the food and beverage category. However, it's too early to say if the headwinds in that category are fully behind us. -
Key Takeaways and Strategic Priorities
Q: What are your key takeaways from 2024 and priorities for 2025?
A: In 2024, the company more than doubled its revenue growth rate from 9% in '23 to 19% in 2024 , achieved record user numbers, and increased engagement, evidenced by the highest-ever weekly active to monthly active ratio. For 2025, the strategic priorities are: growing the user base and deepening engagement; increasing ad load in high-intent areas; enhancing advertiser performance through lower funnel innovations like Performance+; and complementing first-party business with new demand sources. -
Third-Party Partnerships Contribution
Q: How did third-party partnerships contribute last year, and what to expect ahead?
A: The company made significant progress in rounding out gaps in its auction, with first-party relationships leading and third-party demand complementing when needed. As first-party demand strengthens, there's less reliance on third-party demand, especially in mature markets. The capability to ingest demand from multiple sources is more advanced than ever, allowing dynamic response to shifting demand patterns. -
Engagement Metrics Growth
Q: Can you elaborate on engagement and WAU growth metrics?
A: The global weekly active to monthly active ratio reached an all-time high of 62%, indicating deepening engagement even with record user numbers. This ratio is highest in mature regions like the U.S. and Canada. Efforts in actionability, shopping, and curation are resonating, especially with Gen Z, leading to a 90% year-over-year increase in clicks to advertisers in Q4. -
Product Innovation Impact
Q: How will product innovations contribute over the next 1–3 years?
A: Product innovations like Performance+, spotlight ads, and new bidding capabilities aren't one-off launches but have compounding effects over multiple years. In 2024, these innovations led to a doubling of revenue growth and the first $1 billion quarter in Q4. Performance+ is in early days, showing a 20% CPA improvement for advertisers and requiring 50% less inputs to create campaigns. The company sees a steady build and is doubling down on these efforts. -
AI and Machine Learning Impact
Q: How will AI and machine learning drive platform improvement?
A: AI is a core competency, with every pin and product shown resulting from advanced AI techniques. Integration of large language models enhances user experiences like guided search, and approximately 15% of the codebase is AI-generated through coding assistants. These efforts contribute to all-time highs in weekly active users and strong clicks to advertisers. -
Advertiser Adoption of Direct Link
Q: How is advertiser adoption of Direct Link progressing?
A: Since launching Direct Link and mobile deep linking in late 2023, the focus has been on value creation and then value capture. Advertisers adopting measurement tools have seen the value and are shifting budgets accordingly. Some of the largest advertisers now have over 80% of their spend focused on lower funnel objectives, up significantly over the last two years. -
MAU Growth and DAU-to-MAU Ratio
Q: How should we think about MAU growth and engagement improvements?
A: While the company doesn't provide user guidance, they are seeing positive trends in user engagement and record highs in MAUs. Deep engagement is evidenced by all-time high WAU-to-MAU ratios. Leveraging AI for better recommendations and increasing actionability is driving these durable effects, and there's much more opportunity ahead in capturing the broader market.