Good afternoon. Thank you for attending today's Pinterest, Inc. Fourth Quarter and Full Year 2024 Earnings Call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you'd like to queue for a question on today's call, you can do so by dialing star one on your telephone keypad. I'll now hand the call over to Andrew Somberg, Vice President of Investor Relations and Treasury, to begin. Andrew, you may proceed. Good afternoon. Thank you for joining us. Welcome to Pinterest's earnings call for the fourth quarter and full year ended December 31, 2024. 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. 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.pinterest.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. In addition, our results, trends, and outlook for Q1 2025 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. 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-Ks filed with the SEC, available on our Investor Relations website. 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. And now, I'll turn the call over to Bill.

Thanks, Andrew. Good afternoon, and thank you for joining our fourth quarter and full year 2024 earnings call. My remarks today will cover the progress we made this past year and preview some of our key initiatives in 2025 to drive continued execution of our long-term goals. 2024 was a transformative year for Pinterest. We reached record high global users, surpassing 550 million MAUs globally, and 100 million in UCAN while more than doubling our full-year revenue growth rate from 2023. At the same time, we delivered over $1 billion in adjusted EBITDA, a roughly 50% increase as we continue to drive profitable growth. Our 2024 results are a testament that our long-term strategy is working. We've transformed our user experience to focus on why people come to Pinterest, investing in actionability, relevance, and curation, all about distinguishing ourselves as a positive place online. The user journey from inspiration to action maps directly to our advertiser funnel, allowing advertisers to reach users at every stage of their purchase journey. And in today's advertising environment, proving performance has never been more important. As such, we've spent the last two and a half years building a suite of lower funnel tools that captures our users' inherent commercial intent. Our efforts are paying off. In Q4, we achieved our first $1 billion revenue quarter as we grew revenue 18% and drove a record number of clicks during the critical holiday season. As we look forward to 2025, we intend to double down on the multiyear initiatives that underpin our strategy. We continue to leverage AI and our unique first-party signal to drive a more personalized and relevant experience for our users. At the same time, we'll invest in our curation experiences and the shoppability of our platform to allow our users to move…

Thanks, Bill, and good afternoon, everyone. Today, I'll be discussing our full year and fourth quarter 2024 financial results, provide an update on our preliminary first quarter 2025 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. Before I dive into the details of the fourth quarter, I want to pause and reiterate Bill's comments about how 2024 was a transformative year for Pinterest. Last year, we generated $3.65 billion in revenue, representing 19% growth, more than doubling our growth rate from 2023. Importantly, this growth illustrates the significant progress we've made to become a true full funnel platform. We grew revenue primarily from our lower funnel clicks and conversions-based objectives, a signal that our new lower funnel performance tools and strategy are working. We've also remained strategic about our investments, focusing on high ROI opportunities across users and monetization. This includes utilizing AI to improve personalization and content recommendation to enhance the user experience and building automation tools to drive better performance for advertisers. And we're doing this all while continuing to exercise expense discipline. This focus on profitable growth has led to a roughly 50% increase in adjusted EBITDA dollars year over year in 2024, with margins expanding by 510 basis points. Finally, we achieved a significant milestone in 2024, reaching GAAP profitability on a net income basis for the first time since 2021. Now let's dive into the fourth quarter. We ended the quarter with 553 million global monthly active users or MAUs, growing 11% and reaching another record high. Users also continued to grow year over year across all of our geographic regions. In Q4, our US and Canada region had 101 million MAUs, accelerating to…

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

Thank you. Okay. The first question is from the line of Eric Sheridan with Goldman Sachs. You may proceed.

Thanks so much for taking the question. And thanks for all the details in the prepared remarks. Bill, prepared remarks. I want to know what your key takeaways are from 2024 in terms of how the platform evolved and maybe with the eye forward, what are the two or three biggest strategic priorities you're setting up to try to execute against based on those learnings in 2024 as we proceed deeper into 2025. So much.

Thanks, Eric. You know, if we take a step back, you know, 2024, as I mentioned, was a transformative year for our business. We more than doubled our revenue growth rate, going from 9% growth in 2023 to 19% in 2024. We brought on a record number of users while deepening engagement, as best evidenced by our highest ever weekly active to monthly active ratio. We just finished Q4 at 18% revenue growth and are guiding Q1 15% to 17% on a constant currency basis. So all of this really represents the considerable progress against our stated longer-term goals, and we feel good about the sustainability of the revenue growth that we've been driving. So as a result, we're doubling down on our strategy, and we see multiple initiatives with strong, balanced execution to drive our growth in 2025 and beyond. First, is continue to grow our user base and deepen engagement and bring back users more frequently through our efforts in actionability and curation. As we stated many times, you know, relevant ads can be great content for our users and additive to the user experience, particularly when they're in commercial context. And as such, we see room to further grow our ad load, particularly in high intent surfaces and verticals on our platform. And for those users that, again, are in a commercial mindset. Secondly, we'll continue to drive improved performance for advertisers through lower funnel product innovation and ad platform efficiencies. Performance Plus, which we just rolled out late last year, will continue to be enhanced through features like ROAS bidding and Performance Plus Creative. As I've always said, we expect Performance Plus to be a steady build with a multiyear product and adoption cycle. No hockey stick in growth in one particular quarter, but a steady build over a multiyear product adoption cycle. And finally, we'll continue to complement our strong and growing first-party business through new sources of demand as you've seen us do through the launch of resellers and third-party partners, and we'll continue to optimize and test with incremental sources of demand over time.

And maybe just to add a little bit more color there from a vertical standpoint, retail has been strong for us in 2024, and there's certainly more room to go there in 2025. Continue to see opportunities to capture more value from all the clicks we're driving, especially as we roll out performance plus the lower funnel. More granular bidding functionality allowing advertisers to effectively bid on a wider swath of their catalog. As I noted in the prepared remarks, you know, emerging verticals such as financial. There. Within the food and beverage subsector of CPG, which was softer in 2024 due to category-specific headwinds. In 2025, we begin to anniversary the weaker trends in that category, and while we are seeing very early green shoots there in Q1, it's too early to say the headwind in food and beverage is fully behind us. As Phil described, we have several initiatives at play, and we continue to feel confident in the sustainability of our current trajectory and the steady ongoing execution of our plans. Thank you.

The next question is from Brian Nowak with Morgan Stanley. Your line is now open.

Thanks for taking the question. This is Matt on for Brian. Can you talk a little bit about the GPU-enabled machine learning in JetAI areas? That you think can be the most material drivers to further platform improvement in 2025? Thanks.

Certainly. Thanks for the question. Yeah. As a visual search platform, AI is a core competency here at Pinterest. Effectively, every pin and product shown is a result of our cutting-edge AI technique and recommendation algorithms that ingest hundreds of billions of user actions to understand what a user might be interested in. And as I mentioned in the prepared remarks, those are really unique user actions that only take place on Pinterest where users are curating, making product associations, and so that's what's really driven significant improvements in the relevance of our recommendations. So our strategy remains unwavering. We're going to continue to invest in AI that drives great experiences for our users and better performance for our advertisers. This has included things like switching from CPU to GPU serving to leverage larger models that improve organic and ad serving, integrating LLM tech into our AI to drive user experiences like guided search, and computer vision tech for experiences like shop to look, ways to style, etcetera. And as I also mentioned, the prepared remarks, we're using Cognos to help engineers accelerate the velocity of produced code and to help with improving code test coverage and quality. We see really strong internal uptake in these tools. And like I said, roughly 50% of our code base is AI-generated through these coding assistance. So, you know, we see these results clearly in our top-line numbers, you know, with WOW to MAU at an all-time high, users at an all-time high, clicks to advertisers continue to be strong even at those all-time high user numbers. So, again, you know, AI really has a core competency of the platform, and, you know, I talked about, you know, performance plus being at the beginning of a multiyear, you know, product and adoption cycle, you know, we think there's a lot of improvement there. And, you know, again, with what we're seeing in AI, we think we'll continue to drive great advancements in what we can do for user experience and advertising performance. Thank you.

The next question is from John Blackledge with TD Securities. Your line is now open.

Great. Thank you. On the 1Q 2025 guidance, could you discuss the quarter-to-date advertising trends that you're seeing? And then what are kind of the puts and takes that got you to the 1Q 2025 revenue outlook? Thank you.

Thanks, John. Could we just finish Q4 with revenue growth of 18% and guided Q1 to 15% to 17% on a constant currency basis? If you look at Q1 on a two-year stack basis, you'll see our guidance implies a sequential acceleration this quarter. So in Q1, we'll look to continue to drive performance across the lower and upper funnel. Our new lower funnel toolset continues to drive improved value to advertisers, most recently driving over a 90% increase in clicks to advertisers year over year in Q4. We still have more value capture to go as advertisers' performance. We're seeing nice adoption of newer ad formats and capabilities, including ongoing growth of spotlight ads and the adoption of more granular bidding capabilities to give advertisers more bidding control across our catalog. And finally, as Bill mentioned, we're at the beginning of a multiyear product cycle for Performance Plus. We're seeing early good results, but more of the opportunity is in front of us and behind us. We expect the adoption impact to steadily build as it would with any new product rollout and want to reemphasize multi-quarter and multi-year new functionality continues to be out. While challenges still remain within the food and beverage category, we are now lapping the early stages of that softness, which started in December of 2023. As such, we're expecting the overall drag from food and beverage to our top-line revenue to lessen slightly in Q1 as we start to see very early signs of green shoots in that category, but too early to say the headwind is fully behind us. So and that is factored into our guidance as well. So those are some of the factors as we think about Q1 overall in our 15% to 17% constant currency guidance.

Thank you. Next question is from Mark Kelly with Stifel. Your line is now open.

Great. Thank you very much. I wanted to ask you, and you touched on this a little bit in the prepared remarks, but, you know, looking back at last year, I guess, can you talk through the contribution from the third-party partnerships? I guess, would you characterize them as, you know, in line with expectations, better, maybe a little bit slower? And then how much can we expect those partnerships to contribute this year? Very much.

Thanks, Mark. Since the beginning, we've said that our efforts to bring in new demand, inclusive of third-party demand and resellers, was targeted at rounding out gaps in our auction with a particular focus on improving shoppability as a complement to our first-party sales efforts. If we step back, we've seen great progress here on multiple fronts. The platform is more shoppable than ever, as evidenced by the strength of our holiday shopping performance, and we've made significant progress in rounding out gaps in our auction, with first-party relationships leading the way exactly as we would hope and new demand efforts providing a complement when needed. As our capabilities as a true lower funnel platform take hold, we're driving strong first-party demand. At the same time, we've enhanced our ability to bring in programmatic demand as well as demand through resellers. The net effect of that is we've driven significant improvements in the Shopify platform by closing gaps in our auction, with ads and search results now being two times as relevant as they were two years ago. Lastly, as we see strength in our first-party business and advertisers come to us directly, which is what we want, we're finding we have fewer gaps in our auction, especially in our more mature markets. Therefore, as the core first-party business grows, it reduces the need for third-party demand, again, that's a very healthy dynamic for our overall business. However, what's exciting is that our capability to ingest demand from many sources, such as resellers and multiple third-party demand partners, and then thereby reduce gaps in our auction is more advanced than it's ever been, which allows us to respond more dynamically when and if there are shifting demand patterns. So this is an area that we'll continue to optimize and advance as we move forward. Julie, anything you'd add there?

Yeah. So I guess I would say, Mark, thanks for the question. We've been very consistent that we'll not break out revenue from third-party partners or resellers separately. We've noted that these initiatives were big, were new, and began to scale in 2024, with each quarter ramping sequentially, and we'll continue to test and optimize as we move forward, as Bill noted. You know, as we've mentioned, there are many levers for growth in 2025, including growing users' engagement, increasing ad load on high intent surfaces, synergistically with that engagement, improving ad relevance, and ongoing kind of full funnel ad product innovation in addition to some of the opportunities to continue to take share in retail, some of the emerging categories I noted earlier, like financial services and technology. So on balance, we see multiple initiatives with strong balance execution going forward to help drive our growth in 2025.

Thank you. The next question is from Rich Greenfield with Lightshed Partners. Your line is now open.

Thanks for taking the question. Bill and Julia, in the release, there's the quote, "People are coming to Pinterest more often." And, obviously, Bill, you've talked a few times about the improvement in weeklies to monthly weekly users relative to monthlies. But could you help us understand engagement a bit better? You know, you've got US MAUs up 4%. Should we take your comments on WOW's growing substantially faster than MAUs to mean or WOW's growing high single digits, double digits, like, any way to think about given the importance of the US market to revenues, just how to think about how fast that engagement metric is growing or any engagement metric within that is growing. And then you're at 101 million MAUs in the US and Canada. Is that, you know, I don't want to put a time frame, but is that long-term 150 million? It's sealing 200 million. Like, how do you think about the domestic TAM for your business?

Yeah. So, yeah, as I noted, our weekly active to monthly active ratio is at an all-time high for the platform. It's 62% for our global user base, which is a sign of deepening engagement even at a record number of users that I've noted before. Oftentimes, if you add large volumes of new users, that can be dilutive to your overall engagement. But yet we still achieved record highs in that weekly active to monthly active ratio. And it's worth noting, you're parsing sort of, you know, global versus you can. Our WOW to MAU is highest in our most mature regions like you can in Europe. So I've said for quite a long time that, especially in our mature markets, it's really about deepening engagement per user versus chasing new users in our particularly in most mature markets. And we're getting the dynamics that we'd want there with, again, great deep engagement across the platform. The greater frequency from weekly to monthly active ratios and with those being highest in our most mature regions. So, you know, users continue to grow nicely as noted, we had another quarter of all-time user highs, and our strategy remains the same to bring actionability to the forefront of the user experience. Drive curation through boards and collages, and create a positive space for our users, which are increasingly Gen Z, as our largest, fastest-growing audience. You know, so those efforts around actionability, shopping, curation really resonating, you know, across our user base, especially with Gen Z, and that deeper actionability on the platform, you know, I also noted that's also leading to clicks to advertisers growing at over 90% year on year in Q4. Even after lapping the initial impact of direct links from Q4 of 2023, where those clicks were up more than 100% year on year. So even lacking a really strong growth, again, you know, 90% lift in clicks to advertisers. So really finding a great dynamic around, you know, positive MAU trajectory, positive engagement, and tying the user engagement to things that are highly monetizable even as, you know, users engage more and more with that. Thank you.

The next question is from the line of Shweta Khajuria with Wolfe Research. Your line is now open.

Thanks a lot for taking my question. Because I have one on ad products and features, Bill. How should we think about the contribution of all this product innovation that you have done and will do this year as we think about one to three years out, so from performance plus to spotlight ads, new bidding capabilities, increasing ad load, deep linking, everything and what's to come. What are you most excited about in terms of the magnitude of the impact, and how should we think about, you know, when we see the impact from each of these different things? Through, call it, one to three years? How do you see it evolve?

Yeah. Thanks for the question. You know, as I mentioned in my remarks, you know, 2024, you know, was quite transformative for us, more than doubled our revenue growth rate from 2023 to 2024. You know, our lower funnel objectives being the strongest. And, you know, we've been on a journey over the last two and a half years to really make Pinterest a true performance advertising platform. And the things that we've done, you know, as I've said before, I wouldn't think of them as, like, one-off launches. They have compounding effects over, you know, not just multiple quarters, but multiple years. So, you know, we created immense value for advertisers in 2024 through our lower funnel innovation, including links, mobile deep linking, conversion API, clicks were up 90% in Q4 after lapping 100% click growth from the prior year. Doubled ad relevance on search. You know, this all culminated in, you know, the doubling of the growth rate in revenue from 2024 compared to 2023 and our first billion-dollar quarter in Q4. So all of these, again, all of these launches are compounding on each other. That's an effect that we see continuing forward. You know, as we look forward, we're not changing our strategy. We're doubling down, and there's still a lot more yield from these various efforts as they continue to mature. For example, Performance Plus is very much in its early days. It just went into general availability in October, and, you know, this is a longer-term multiyear innovation cycle and adoption curve. And if you think back to when other platforms launched similar products, it kicked off multiyear adoption cycles for them as well. Notably, these platforms were still iterating and enhancing those products today, three to four years after their initial launch. You…

The next question is from the line of Ron Josey with Citigroup. Your line is now open.

Great. Thanks for taking the question, Bill. Maybe the quick follow-up to Shweta's just there. I really enjoyed your comment not one-time launches, but compounding over multiple years. Now a year into direct links, maybe a year and a quarter, and so with outbound clicks growing 90%, just I would love to hear how advertiser adoption of the direct links going, the sales process is going, etcetera. And really how that's compounding to more advertisers just diverting more always-on ad spending. And then maybe more tactically, what's realized is bidding set to launch, I think you said end of the quarter. I'd love to understand just the benefits and the real opportunity around Real Estate is doing. What do you think could or how do we think about what could happen here once launched? Thank you.

Yeah. So, you know, on this compounding effect, you know, and, you know, the direct links, mobile deep linking. You know, as we talked about before, you know, we launched those in Q4 of 2023 is when we launched direct links. And we said then that we were focused first on value creation, and then value capture second. So we launched, you know, mobile deep linking and direct links in the back half of 2023. Then that gave advertisers a reason to go launch measurement tools with us. And so we really focused on getting more average adopting our measurement tools through 2024 based on the evidence of the quick traffic we're able to drive, and we saw as those advertisers adopted performance measurement with us, privacy-safe measurement, that consistently that would lead to them being able to see the value that we are driving and then shift in our direction. And we see more of that to go both on that value capture from, you know, the measurement implementations that are happening as well as the next phase of work which we talked about, which was after we created the value, made it so they could measure the value, then with Performance Plus, that makes it so they can easily take action on that value with easy campaign creation and setup. And then so, you know, we've created tremendous value through direct links, through mobile deep linking, and really just the shoppability of our users, because it's not just the format changes that as we made shopping better for users, we're seeing users engage more with shopping, clicking more on the platform, taking action more on the platform. And advertisers taking advantage of all that value creation again, we see more of that value in front of us than…

Then the last question is from Jason Helfstein with Oppenheimer. Your line is now open.

Thanks. Thanks for taking the question. So in the quarter, you saw sequential improvement in both US and Europe MAU. How should we think about MAU growth for this year? And then how are you thinking about further improvement in the, you know, the DAU to MAU ratio after the improvement in 2024? Thank you.

You know, so, you know, we don't guide to users. So, you know, not gonna answer the question, you know, precisely. But, you know, as I've shared in my remarks, you know, we see really positive trajectory and giving better recommendations to our users, the curation on the platform, you know, leading them to, you know, work through more of their decision-making journey and then the actionability that we brought in the platform, making it easier for them to take action. So those are the things, you know, when we look at why we're getting to record highs and MAUs, you know, the deep engagements, as evidenced in the WOW to MAU ratios at all-time highs. You know, it is leveraging AI against our unique signal to make really great recommendations to our users that are fed by the unique curation signal that we have. And that compounding effect we see continuing forward. So while we don't guide to users, you know, the underlying effects that are driving user engagement and MAU growth, we see those as long-term durable effects, you know, and as I mentioned in my remarks, we have a lot more to do to continue doubling down on that work when you think about, you know, how much shopping activity occurs in the broader ecosystem, the size of that market, there's a lot more of that out there for us to capture. So again, while we don't guide to users, I think the effects that we see, we believe are durable and based on the uniqueness of our platform and, you know, we continue to focus on as we look ahead. And with that, I'd like to thank all of you again for joining the call and for your questions. We look forward to keeping this dialogue going, and we hope you enjoy the rest of your day. That concludes today's conference call.

Thank you for your participation. You may now disconnect your lines.