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Speaker 1: It's bringing CEO of interest Bill ready for more and Bill,

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Speaker 1: good morning to you. Thank you for joining us here

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Speaker 1: on Bloomberg Technology. Let's start with that guidance, get it done.

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Speaker 1: What were the factors behind the range, which again it's

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Speaker 1: below street estimates.

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Speaker 2: Sure, yeah, I mean if you look at Q two,

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Speaker 2: you know we put up record user growth.

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Speaker 3: We hit a new all time high end users.

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Speaker 2: We came in above our guidance on revenue twenty one

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Speaker 2: percent plus revenue growth with six himesred basis points of

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Speaker 2: margin expansion. So Q two is a really strong quarter.

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Speaker 2: As we look ahead to Q three, we have a

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Speaker 2: five point tougher comps. We're laughing lapping much tougher comps

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Speaker 2: and you saw that from some of our larger peers

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Speaker 2: as well. But when you step back from that, you

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Speaker 2: know we're growing faster than our larger peers that have

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Speaker 2: already reported. We're seeing our best product market fit in years.

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Speaker 2: Gen Z's our largest, fastest growing audience, and we're winning

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Speaker 2: share of wallet with some of the largest, most sophisticated

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Speaker 2: advertisers out there. So the fundamentals of the business are

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Speaker 2: all really sound and we feel great about those and

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Speaker 2: as we guided forward, it's relatively consistent growth with where

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Speaker 2: we've been once you adjust for currency fluctuations, despite the

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Speaker 2: fact that we have a five point tougher comp So

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Speaker 2: I think you saw that in some of the reactions

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Speaker 2: on our larger peers. I think you're seeing some of

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Speaker 2: that here as well. But if you pull back from it,

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Speaker 2: the fundamentals of the business have never been better for Pinterest.

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Speaker 3: Bill.

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Speaker 1: Something you told my colleagues at Bloomberg News is that

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Speaker 1: historically Pinterest is a great place for windows shopping. But

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Speaker 1: I think the quote is that all the stores were

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Speaker 1: closed helped me understand that.

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Speaker 2: Yeah, So you know, I came in two years ago

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Speaker 2: and at that time, Pinterest was primarily about browsing and

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Speaker 2: there weren't a lot of clicks and conversions to speak

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Speaker 2: of for advertisers. We've made tremendous progress in making it

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Speaker 2: so that users can actually take action on the things

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Speaker 2: they find on Pinterest, and this has been right at

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Speaker 2: the core of how we've accelerated user growth. Last time

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Speaker 2: I was on the show last quarter, we talked about

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Speaker 2: seven consecutive quarters of accelerating user growth. We put up

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Speaker 2: consistent performance to that on users again this quarter and

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Speaker 2: at the core of that is that actionability. And not

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Speaker 2: only do users love that actionability, you know, Pinterest is

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Speaker 2: where gen Z goes to shop, but it's great for advertisers.

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Speaker 2: This is our third quarter in a row of more

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Speaker 2: than doubling the number of clicks we sent to advertisers

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Speaker 2: year on year, which is why you see us gaining

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Speaker 2: share with the largest, most sophisticated retailers out there that

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Speaker 2: are increasing share of wallet with Pinterest. And we're seeing

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Speaker 2: that start to take hold across retail, which we cited

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Speaker 2: as a place of broad strength for us and a

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Speaker 2: driver of our really strong results in Q two, and

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Speaker 2: we're excited by as we look ahead.

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Speaker 1: Bill, just really quick because you're talking about your user base, right,

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Speaker 1: So we've just shown a graphic that shows the scale.

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Speaker 1: Forty percent of that is gen Z And there's always

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Speaker 1: a question about the actions that audience takes, right, do

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Speaker 1: they actually buy anything having spent time on the platform.

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Speaker 3: Yeah?

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Speaker 2: Absolutely, I think this is you know two things I'd

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Speaker 2: say about gen Z one. They're the taste makers for

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Speaker 2: you know, the next generation. So Pintress is really unique

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Speaker 2: and it's not just the people shop on Pinterest. People

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Speaker 2: curate their tastes on pinterests. It's a completely unique behavior

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Speaker 2: on Pinterest relatives to the rest of social media, where

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Speaker 2: people are planning outfits and planning what they're going to

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Speaker 2: buy long before they do it, and so that gives

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Speaker 2: us really rich signal to feed our AI for recommendations,

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Speaker 2: and so that taste making that happens is not just

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Speaker 2: good for gen Z, but they're the taste makers for

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Speaker 2: the next older generations where we deliver more relevant recommendations there.

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Speaker 2: And then to your point on gen Z buying, Yes,

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Speaker 2: Penterest is where gen Z goes to shop and we

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Speaker 2: see that same behavior that you know gen Z. Yes,

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Speaker 2: it spans teenagers, but also spans all the way up

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Speaker 2: through you know, recent college grads and people that are

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Speaker 2: in their first jobs and their first apartments, and so

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Speaker 2: we see a lot of shopping behavior there and it's

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Speaker 2: really consistent across demographics on the platform.

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Speaker 1: Bill Pinterest does not sell political advertisements, are you able

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Speaker 1: to kind of quantify the impact of that policy in

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Speaker 1: terms of a missed opportunity?

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Speaker 3: Yeah, it's a great question.

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Speaker 2: You know, we've done a number of things to invest

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Speaker 2: in the positivity of the platform that if you look

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Speaker 2: at them on a short term optimization.

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Speaker 3: You know, like political ads.

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Speaker 2: You could say, Okay, there'd be a lot of money

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Speaker 2: spent on political ads over the of the coming quarter. However,

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Speaker 2: we don't take that money because we see that that's

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Speaker 2: an investment in the long term health of our platform.

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Speaker 2: As we're winning with gen Z, one of the top

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Speaker 2: reasons gen Z sites as why they come to Pinterest

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Speaker 2: is they see it as an oasis away from the

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Speaker 2: toxicity they experience elsewhere on social media. So as we've

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Speaker 2: done things like making pinterest private only for under sixteen,

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Speaker 2: we've actually seen that come through and drive user growth

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Speaker 2: and engagement for us, and we're seeing it cut through

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Speaker 2: with advertisers too, where advertisers also want to be in

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Speaker 2: a brand safe environment. Brands are built on positivity, and

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Speaker 2: brands don't want to show up next to negative, polarizing content.

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Speaker 2: And so you know, yes, there'll be a lot of

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Speaker 2: money spent on political ads, but we're consciously choosing not

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Speaker 2: to take those because we think that's in the long

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Speaker 2: term interest of our platform for both users and advertisers.

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Speaker 1: Bill, let's talk about osificial intelligence, but I think some

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Speaker 1: granila is important. So which large language models or partners

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Speaker 1: and you're building on top of and then you were

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Speaker 1: able to give a sense of like the specific AI

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Speaker 1: spend that's related to kind of add targeting and add improvement,

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Speaker 1: bit pricing or something else.

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Speaker 3: Yeah, this is AI is a core competency for us.

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Speaker 2: I've talked about on prior earnings calls where when you

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Speaker 2: look at the fact that we're not only growing users

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Speaker 2: at record levels, we're actually deepening engagement per user. A

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Speaker 2: big part of that is on the increasing relevancy of

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Speaker 2: our recommendations, and so I shared on a prior call

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Speaker 2: that through large language models, we saw a ten percentage

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Speaker 2: point lift and the relevancy of our recommendations. That's really

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Speaker 2: really encouraging is why users are coming back to finding

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Speaker 2: more of what they're looking for on Pinterest. But to

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Speaker 2: your question on spend, we've also delivered really great margin

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Speaker 2: expansion this past quarter, even as we were investing in AI.

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Speaker 2: We delivered six hundred basis points of margin expansion and

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Speaker 2: you've seen that consistently over the last two years. And

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Speaker 2: the reason for that is that we're delivering great user

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Speaker 2: engagement from the AI, but it's user engagement that is

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Speaker 2: highly monetizable. More than half the users on pinchests are

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Speaker 2: there to shop, So we're turning that AI investment into

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Speaker 2: really great return through higher engagement. And then advertisers want

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Speaker 2: to meet those users where they're shopping, and that's driving

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Speaker 2: acceleration and AdSpend for us.

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Speaker 3: And so you've seen that in the results.

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Speaker 2: But we're really finding that we can deliver great return

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Speaker 2: on our AI investments, and we have really unique signal.

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Speaker 2: I think this is one thing that is underappreciated across

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Speaker 2: the industry, and so much like cloud commuting, much like

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Speaker 2: cloud computing, I think everyone have access to basic building blocks,

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Speaker 2: but who has really unique signal? And the curation of

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Speaker 2: shopping behavior on pinterest gives us really unique signal to

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Speaker 2: feed our AI bill.

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Speaker 1: The stocks down significantly in the session. It's down sort

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Speaker 1: of twelve percent year to date, that big year last year,

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Speaker 1: I think more than fifty percent gain in the stock.

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Speaker 1: You're two years into this job, So what's the biggest

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Speaker 1: action you've taken and one that you want to take.

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Speaker 3: Yeah, so it's a great question, and I think you.

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Speaker 2: Know, I certainly you don't like to see volatility, but

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Speaker 2: we've seen volatility before. If you step back from it,

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Speaker 2: we have consider distantly over the last two years demonstrated

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Speaker 2: steady progress and improving the overall health of the business

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Speaker 2: on on top line, on bottom line, on.

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Speaker 3: User growth and engagement.

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Speaker 2: You know, so the fundamentals have are sound and improving,

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Speaker 2: and we've delivered a say do ratio of one on

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Speaker 2: these things and we'll look to continue.

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Speaker 3: To do that.

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Speaker 2: The things have been the biggest drivers in the business,

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Speaker 2: I would say one really investing in AI uh and

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Speaker 2: the actionability on the platform via that AI so relevancy, actionability,

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Speaker 2: and then positivity in terms of delivering a safe space

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Speaker 2: for our users. State is simply you know, our users

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Speaker 2: go to pinterest because it's a place they can invest

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Speaker 2: in themselves without the sort of comparative performative nature you

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Speaker 2: know that they experience on the rest of social media,

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Speaker 2: and that's why they're there for that commercial intent. So

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Speaker 2: we're going to continue to invest in those things. They're

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Speaker 2: really working well for us. When you zoom out over

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Speaker 2: the multi quarter period, you know, it's been a fundamental

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Speaker 2: change introductory of the business and we're going to keep

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Speaker 2: investing those things that are working because again, our fundamentals

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Speaker 2: have never been healthier and what they aren't right now

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Speaker 1: Interesting CEO Bill Ready, thank you for coming back on

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Speaker 1: Bloomberg Technology