Pinterest reports strong Q2 growth: Revenue up 21%, user base expands 12%

Pinterest this week announced its financial results for the second quarter of 2024, revealing substantial growth in both revenue and user base. The visual discovery platform reported a 21% year-over-year increase in revenue, reaching $853.7 million, and a 12% rise in global monthly active users (MAUs), totaling 522 million. These results, disclosed just yesterday, underscore Pinterest's continued momentum in the digital advertising and social media landscape.

According to the company's earnings report, Pinterest's strong performance was driven by several key factors. The platform saw significant gains in social measurement revenue, which surged by 44% compared to the same period last year. This growth reflects Pinterest's increasing appeal to advertisers seeking to reach engaged audiences across various social media environments. Additionally, Connected TV (CTV) measurement volumes experienced a remarkable 55% year-over-year increase, highlighting the platform's expanding footprint in the rapidly growing streaming advertising market.

Pinterest's CEO, Bill Ready, emphasized the company's progress in executing its strategic initiatives. Ready stated, "We had another impressive quarter, reporting a 21% increase in revenue and 12% growth in monthly active users globally." He further noted that advertisers are seeing improved performance across key objectives on Pinterest, from brand awareness to conversion, as the company continues to roll out AI-powered products and experiences.

The financial results reveal a nuanced picture of Pinterest's global expansion. While the U.S. and Canada remain the largest revenue contributors, growing 19% year-over-year to $672.9 million, international markets showed even stronger growth. Europe saw a 25% increase to $142.7 million, and the Rest of World category surged by 32% to $38.1 million. This geographic diversification suggests Pinterest's growing appeal to users and advertisers worldwide.

One of the most notable achievements in the quarter was the milestone of measuring more video impressions than display impressions for the first time in the company's history. This shift underscores the increasing importance of video content on the platform and aligns with broader industry trends favoring video-based advertising. Furthermore, Pinterest reported that it now measures more impressions outside of North America than within, marking a significant step in its global expansion strategy.

The company's focus on enhancing its advertising offerings appears to be paying dividends. Pinterest highlighted the success of its efforts to become a true full-funnel platform, particularly through new lower-funnel offerings. These initiatives have created significant value for advertisers, contributing to the strong revenue growth observed in the quarter.

In terms of user engagement, Pinterest reported that its efforts to improve content discovery and relevance are yielding positive results. The company upgraded its search ranking algorithm to incorporate new signals, leading to a significant increase in the global search fulfillment rate. This improvement means users are finding more of what they're looking for when they search on Pinterest, potentially leading to increased time spent on the platform and higher user satisfaction.

The earnings report also shed light on Pinterest's advancements in AI and machine learning. The company introduced new features such as guided search, which uses generative AI to help users refine their searches and explore content more effectively. This technology-driven approach to content discovery appears to be resonating particularly well with episodic users, who are generally less familiar with the platform.

Pinterest's financial performance in the quarter was robust, with the company reporting net income of $8.9 million, a significant improvement from a net loss of $34.9 million in the same quarter of the previous year. Adjusted EBITDA reached $179.9 million, representing a 30% margin and demonstrating the company's ability to drive profitability alongside growth.

Looking ahead, Pinterest provided guidance for the third quarter of 2024, projecting revenue between $885 million and $900 million, which would represent 16-18% year-over-year growth at the midpoint. The company also raised the midpoints of its full-year guidance ranges for both revenue and adjusted EBITDA, signaling confidence in its continued growth trajectory.

The strong quarter comes amid a challenging macroeconomic environment for many digital advertising platforms. Pinterest's ability to deliver significant growth in this context suggests that its strategic initiatives and unique value proposition are resonating with both users and advertisers. The company's focus on visual discovery and inspiration-to-action journeys appears to be differentiating it in a crowded social media landscape.

However, Pinterest faces ongoing challenges and competition. The digital advertising market remains highly competitive, with giants like Google and Meta commanding significant market share. Pinterest's continued success will likely depend on its ability to innovate, expand its advertiser base, and maintain user engagement in an increasingly saturated attention economy.

The company's investments in AI and machine learning technologies could be crucial in addressing these challenges. By enhancing content relevance and ad targeting capabilities, Pinterest aims to improve both user experience and advertiser return on investment. The success of these initiatives will be closely watched by investors and industry observers alike in the coming quarters.

In conclusion, Pinterest's second quarter results for 2024 paint a picture of a company successfully executing its growth strategy in a challenging market. With strong revenue growth, expanding user base, and improving profitability, Pinterest appears well-positioned to capitalize on the ongoing shift to digital advertising and the increasing importance of visual discovery in consumers' online experiences.

Key facts from Pinterest's Q2 2024 earnings report

Revenue increased 21% year-over-year to $853.7 million

Global monthly active users grew 12% to 522 million

Social measurement revenue surged 44% compared to Q2 2023

Connected TV measurement volumes increased 55% year-over-year

U.S. and Canada revenue grew 19% to $672.9 million

Europe revenue increased 25% to $142.7 million

Rest of World revenue rose 32% to $38.1 million

Net income was $8.9 million, compared to a net loss of $34.9 million in Q2 2023

Adjusted EBITDA reached $179.9 million, representing a 30% margin

Q3 2024 revenue guidance set between $885 million and $900 million