Pinterest, Inc. · NYSE:PINS
Pinterest — Investor Day (September 2023)
158 slides from Pinterest's investor day presentation, Sep 19, 2023
Slide 1: Pinterest Investor Day 2023
Pinterest Investor Day 2023 September 19, 2023
Slide 2: Agenda
Agenda Presentation Company and strategy overview Bill Ready Chief Executive Officer Building an engaging product Sabrina Ellis Chief Product Officer Driving growth through content Malik Ducard Chief Content Officer The Pinterest shopping ecosystem Martha Welsh Chief Strategy Officer Our advertisers
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, about us and our industry that involve substantial risks and uncertainties, including
Slide 4: Limitation of Key Metrics
Limitation of Key Metrics The numbers for our key metrics, which include our monthly active users (MAUs) and average revenue per user (ARPU), are calculated using internal company data based on the activity of user accounts. We define a monthly active user as an authenticated Pinterest user who visi
Slide 5: Company and strategy overview
Company and strategy overview
Slide 6: Pinterest's mission
Pinterest’s mission To bring everyone the inspiration to create a life they love
Slide 7: Significant growth and momentum since IPO
Significant growth and momentum since IPO driven by global user reach and deepening engagement IPO 1 265M $756M $(39)M Global monthly active users Revenue Adjusted EBITDA Q4 2018 FY 2018 FY 2018 Q2’23 2 465M $2.9B $407M Global monthly active users Revenue Adjusted EBITDA Q2 2023 LTM ending Q2 2023 L
Slide 8: Why I joined Pinterest
Why I joined Pinterest • Positioned at the intersection of search, social and commerce • Dynamic multi-session user journeys • Unique full funnel platform • Building a more positive internet • Opportunity to accelerate growth and monetization
Slide 9: Pinterest is a visual discovery platform at the intersection of search, social and commerce
Pinterest is a visual discovery platform at the intersection of search, social and commerce Company and strategy overview 9
Slide 10: From inspiration to action
From inspiration to action An advertiser’s view of a user journey Discover Decide Do Get inspired by home feed Search and save Pins for red dress and Purchase the full outfit get inspired around the whole outfit seamlessly across digital retailers 95% relevancy on 6B+ searches per month2 1.5B saves
Slide 11: User journeys are non-linear and multi-session
In real life, user journeys are non-linear and multi-session Pick up where you left off Collaborate Search for a red dress Get inspired by home feed Create board Visit merchant site Discover on Pinterest Decide on Pinterest Do on Pinterest Company and strategy overview 11
Slide 12: Users provide valuable intent signals
Users provide highly valuable intent signals as they progress through their journey on Pinterest Searching Curating Collaborating Clicking Saving, collaging, creating a board through to a site Company and strategy overview 12
Slide 13: The unique full funnel platform for users and advertisers
The unique full funnel platform for users and advertisers Drives full funnel User mindset Advertiser objectives engagement that aligns with Aligning user mindset to Build Upper Discover advertiser objectives, brands can Awareness funnel create content for every stage of their audiences’ journey. Dri
Slide 14: First party intent signals are a significant differentiator
With cookies going away, Pinterest provides Key differentiator advertisers unique in today’s advertising first party intent signals are a 1st party signals environment significant differentiator Searching and browsing- Privacy-focused related items Saving Pins on Permissioned curated boards cross-ap
Slide 15: Highly differentiated user signals enhance our AI capabilities
Highly differentiated user signals enhance our AI capabilities +60% +30% increase in saves per MAU from improved ad relevance AI driven personalization 1 on Search YTD 2 1 Pinterest Internal Data as of August 2023 | Note: EU 2 Pinterest Internal Data as of June 2023
Slide 16: Our unique flywheel: ads are content on Pinterest
Our unique flywheel: ads are content on Pinterest User signals+personalization+relevant ads increase user engagement Company and strategy overview 16
Slide 17: We are building a positive place on the internet
We are building a positive place on the internet— and it’s paying off for users and advertisers out out 8 of 10 #1 9 of 10 people who use Pinterest come to place that people say “has Pinterest shoppers agree they trust the platform to feel positive. 3 in 10 a positive impact in my life” the content
Slide 18: Our business priorities
Our business priorities 1 Growing users and deepening engagement 2 Improving monetization per user (ARPU) 3 Driving profitable growth
Slide 19: Growing users and deepening engagement
Growing users and deepening engagement How we are better engaging our users Before Today and go forward strategy • Comprehensive intent-based signals employing next Personalization • Underutilized intent-based signals generation AI to improve content and product recommendations • Highly exposed to s
Slide 20: Growing users and engagement outpacing MAU growth
Growing users and deepening engagement Growing users and engagement outpacing MAU growth Global MAU has returned to YoY growth Engagement growth faster (in millions) COVID pull-forward than user growth Refined strategy and unwind and focus 14% 459 465 13% 450 431 12% 10% 335 A GR 28% C 8% 265 7% 216
Slide 21: Growing monetization
Growing monetization How we are improving monetization Before Today and go forward strategy Pace of Ad product • 12 ad products shipped 2020-2021 • 30+ ad products shipped 2022-2023 innovation Ads vs. • Lower Ad relevance did not always match • Higher Ad relevance where Ads feel like content engagem
Slide 22: Sustained growth in ad impressions
Growing monetization Sustained growth in ad impressions has been driven by MAU growth, engagement gains and relevant ad load increases Highly relevant ads enable ARPU expansion by geography2 ad load increases1 Q2 2023 vs Q2 2019 Q2’23 YoY 33% 2.3x 5.1x Europe UCAN 14% 8% 6.7x RoW MAU Engagement Ad I
Slide 23: Driving profitable growth
Driving profitable growth Before Today and go forward strategy • Focus on solving user needs to drive Growth • Feature growth prioritized engagement and ARPU COR1 • Unfocused investments in competing product • Operational rigor driving disciplined initiatives led to margin compression innovation and
Slide 24: Executing against a massive opportunity
Executing against a massive opportunity Pinterest market share (Based on 2022 revenue) $550B US & Canada: $255B UCAN Europe Europe: $111B 0.9% 0.4% Digital RoW: $183B advertising spend1 RoW Global 0.1% 0.5% $2.8B Pinterest FY2022 revenue US & Canada: $2.3B Europe: $0.4B RoW: $0.1B 1 Insider Intellig
Slide 25: Growth framework: our revenue model
Growth framework: our revenue model Users 1 Global MAU growth Engagement 2 Engagement growth outpacing MAU growth Monetization Ad Load 3 Ad load is synergistic with engagement, and increasing Ad Pricing 4 Ad pricing tailwinds driven by lower funnel solutions Revenue 5 3P and international additional
Slide 26: The next 3-5 years: accelerating growth + profitability
The next 3–5 years: accelerating growth + profitability August ‘23 Earnings Call Our 3-5 Year Targets High single Mid-to-High Revenue digit range Expected to grow faster Growth teens CAGR than market growth (guidance for Q3 ‘23) ~400bps of YoY Committed to healthy Adjusted EBITDA Margin Low 30’s % p
Slide 27: Summary investment highlights
Summary investment Unique visual discovery experience at the 1 highlights intersection of social media, search and commerce with highly valuable millennial and Gen Z populations 2 Tremendous ~$550B digital advertising spend opportunity with right to win as lower funnel increasingly monetizes, and un
Slide 28: Management team
Management team Highly experienced and driven leadership team Bill Ready Sabrina Ellis Malik Ducard Martha Welsh Bill Watkins Chief Executive Officer Chief Product Officer Chief Content Officer Chief Strategy Officer Chief Revenue Officer Joined Pinterest in 2022 Joined Pinterest in 2023 Joined Pint
Slide 29: Building an engaging product
Building an engaging product
Slide 30: Agenda
Agenda 1 Meet our audience 2 Product investments driving growth Building an engaging product 30
Slide 31: Meet our audience
Meet our audience People come for a breadth of interests and with high commercial intent Building an engaging product 31
Slide 32: Pinterest overview: how the product works
Pinterest overview How the product works Discover Decide Do Browse personalized feeds for Save ideas from the app and around Pick up where you left off at any time. Visit your passions and projects. the web. Organize and evaluate items. merchant websites to bring ideas to life. Building an engaging
Slide 33: Ads are content on Pinterest
Ads are content on Pinterest Social feed Pinterest Video feed Ads are an interruption Ads are content, Ads are an interruption to core content highly relevant to a to core content user’s intent Ad Ad Ad Ad Ad Ad Ad Ad 520674-002-Part-2 18Sep23 20:25 Page 198 Building an engaging product 33
Slide 34: Pinterest users are a highly valuable demographic
Pinterest users are a highly valuable demographic Global audience Representative Household decision makers audience with purchasing power4 465M 67% 50% 55% Global Monthly Female1 Pinterest reach of US total digital of all US Moms Active Users1 population with a college degree 79% 42% 57% 23% Interna
Slide 35: International MAU is growing strongly and has headroom
International MAU is growing strongly and has headroom Investments in personalization have driven growth – significant additional international opportunity Europe and RoW MAU Seeking inspiration to (in millions) action resonates globally Europe MAU 4 Year CAGR: 11% 246 RoW MAU 4 Year CAGR: 18% Signi
Slide 36: Gen Z is Pinterest's newest, most engaged audience
Gen Z is Pinterest’s newest, most engaged, and fastest growing audience Gen Z MAUs growing Gen Z Gen Z saves the most per user faster than total MAUs 193 compared to other generations (in millions) 161 2.4x Q2 2023 20% YoY growth in Gen Z MAU 8% YoY growth in Total MAU Q2’22 Q2’23 Other Gen Z Pinter
Slide 37: Core and emerging use cases
Core use cases Core use cases Emerging use cases continuing to grow with (YoY MAU Growth) (YoY MAU Growth) demonstrated strength in emerging use cases 13% 27% Improvements in content and actionability Women’s Fashion Men’s Fashion have driven healthy growth in MAUs who engage in core and emerging us
Slide 38: Pinterest has become a mobile app-centric platform
Pinterest has become a mobile app-centric platform Mobile app MAU over time Mobile app users have Mobile app MAU as % of total MAU (in millions) >2x 19% 4 year CAGR ` saves per MAU of web users 454 465 416 433 154 108 88 168 300 377 325 Strategies we’ve employed 113 300 248 to grow mobile app MAU: 1
Slide 39: Strong product market fit: recent cohorts most engaged
Strong product market fit: recent cohorts are our most engaged Saves per user are sharply increasing in our more recent cohorts New users that joined in 2023 save in 1.99x their first year 1.99x as often as new users that joined in 2018 did in their first year First year saves per user indexed to 20
Slide 40: Product investments to drive growth
Product investments to drive growth Re-investing in Doubling down Atomization personalization on saving and Collages Building an engaging product 40
Slide 41: Leaning back into our unique value proposition
Leaning back into our unique value proposition has driven user growth & engagement—and we’re doubling down Focus on entertainment video and Focus on Pinterest differentiators and user intent creator driven ecosystem Engagement Continue leaning into our core value proposition Q1’21 Q2’21 Q3’21 Q4’21
Slide 42: Personalization AI has improved home feed
Personalization AI has improved home feed Home decor enthusiast Fashionista recommendations, surfacing new Personalized Home feed Personalized Home feed ideas and topics to explore, and driving a return to growth +60% increase in saves per MAU driven by personalization Pinterest Internal Data as of
Slide 43: Personalization launched: inclusive technology
Personalization Launched Users want to see themselves Skin tone ranges Body type technology represented in ideas. We’re leading Allows users to filter in search Powers more diverse by preferred skin tone body type ranges in feeds the industry in building inclusive products powered by AI Increasing r
Slide 44: Personalization upcoming
Personalization Upcoming We’ll leverage AI to help users explore Explore your style Tailored recommendations and define their personal style, taking Insights generated to help with Provide feedback to build a personalized self-discovery and pivots to new topics experience and tailored recommendation
Slide 45: Saving is our differentiated intent signal
Saving Launched Saving is our differentiated intent signal Save Personalized feed Save ideas for projects and Return and discover new ideas It is how users navigate their multi-session interests when inspiration strikes based on what you’ve saved planning journeys – and drives the personalization of
Slide 46: Saving for yourself
Saving for yourself In beta We’re making it easier for users to Easy to find “Auto-magical” what is saved organization tools save, retrieve and organize Pins – the With search, sort & filtering capabilities Using AI to auto-organize saved content stickiest retention loop on the platform 28% higher r
Slide 47: Saving with others: collaboration and sharing
Saving with others: In beta collaboration and sharing Collaborate Share Invite a friend to Share ideas with a friend on or off drives engagement collaborate on a board platform to get their advice Making it easier for friends and family to share ideas and collaborate on projects or plans Investing i
Slide 48: Atomization
Atomization In beta Atomization is the technology that breaks complex scenes on Pins into their individual elements Users can create Cutouts of specific parts of images that inspire them and products within Pins they want to buy Early testing with users expected to roll out in the coming months 48
Slide 49: Atomization powers the next generation of content
Atomization powers In beta the next generation of Pinterest content Collages empower users to visualize, curate, personalize and share their ideas Collages create new, native Pinterest content Collages drive 2x more saves than other Pin types Atomization unlocks a new understanding of the specific e
Slide 50: Key takeaways
Key takeaways 1 Users come to Pinterest with a breadth of interests and high commercial intent 2 Our audience is highly valuable and growing globally, with particular strength in Gen Z 3 Engagement outpacing user growth, evidenced by recent cohorts being the most engaged 4 User experience that allow
Slide 51: Driving growth through content
Driving growth through content
Slide 52: Agenda
Agenda 1 Diverse content across verticals and formats 2 Highly scalable content strategy 1 Content drives engagement Driving growth through content 52
Slide 53: Content through a wide spectrum of formats
Content through a wide Actionable Content spectrum of formats Images Videos Products via merchant catalogs 475B 475B Pins saved Ads Boards Atomized content A collection of content organized by users 175B ~25% CAGR 2018 (IPO) 2023 Pinterest Internal Data as of August 2023 | Note: Cumulative count of
Slide 54: Curation is a content superpower
Curation is a content superpower Boards Highly personalized A collection of content recommendations User curation of content provides unique signals organized by a user for our ecosystem contributing to personalization ~70% of monthly active users >10B have created a board # of boards >4B ~25% CAGR
Slide 55: Video helps users discover ideas and shop
Video plays a critical role in helping users discover ideas and shop their inspiration Focusing on lean forward content, not lean back entertainment Nearly 170% increase in video content YoY as of Q2 Pinterest Internal Data as of June 2023 55
Slide 56: Content with personality, not only personalities with content
Content with personality, not only personalities with content Prioritization today How new content gets acquired Publishers Deals & partnerships Prioritization before Media Cos Native publishing Creators Scaled acquisition Ads Merchants Brands Brand content Scale Providers Product catalogs Board & C
Slide 57: Content that is globally scalable
Content that is globally scalable and resonates across demographics 62% of saves is on content from outside of the user’s home market1 Millennial users are over 30% more likely to save Gen Z-created images than images from their own generation2 1 Pinterest Internal Data as of July 2023 | Note: Measu
Slide 58: Content lifespan and engagement are positively correlated
Content lifespan and 80% engagement are positively correlated 60% The best performing content has a half saves life of over a year and often finds new life as trends ebb and flow or seasonal percent 40% moments arrive Cumulative 20% 13 month average half life of a Pin 0% 0 4 8 12 16 20 24 Age, month
Slide 59: Key takeaways
Key takeaways 1 Content Users come across t Pinteres a wide spectrum with a breadth of formats f is vital to interests our engagement and high commercial proposition, intent including curation which creates a completely unique form of content on Pinterest 2 We are growing globally scalable and everg
Slide 60: The Pinterest shopping ecosystem
The Pinterest shopping ecosystem
Slide 61: Agenda
Agenda 1 Introduction to our shopping experience 2 Our shopping strategy: historical and future 3 Shopping and ads are highly synergistic The Pinterest shopping ecosystem 61
Slide 62: Users come to Pinterest with active shopping intent
Users come to Pinterest active shopping intent +50% of users think of Pinterest as a place to shop today1 96% of searches are unbranded2 1 Pinterest Internal Data as of June 2023 | Note: In-app survey results 2 Pinterest Internal Data as of June 2023 | Note: US; calculated as % of the top 1000 mos 6
Slide 63: Integrated shopping into core experiences
Integrated shopping into core experiences We fundamentally shifted our shopping strategy a year ago From being the retailer to partnering with retailers The Pinterest shopping ecosystem 63
Slide 64: Integrating shopping into core experiences
Integrating shopping into core experiences From shopping as a destination to pervasive throughout core experiences Before Shop tab Today Home feed Related pins Search Designated Shopping integrated shopping tab across core platform Low +50% YoY engagement increase in click throughs and saves of buya
Slide 65: Shopping on the platform
Shopping on the platform Shop the Look Visual Search Shopping Pin Shopping Ad Format (Organic catalog) (Promoted catalog) The Pinterest shopping ecosystem 65
Slide 66: From being the retailer to partnering with retailers
From being the retailer to partnering with retailers Supporting a seamless handoff to our retail partners instead of driving transactions on Pinterest Before Today Checkout experience Seamless handoff to checkout on on Pinterest merchant site or mobile app Low checkouts per day Brings more merchants
Slide 67: Go-forward shopping strategy
Go-forward shopping strategy Increasing Improving shopping Connecting users Scaling ads shoppable content recommendations and merchants seamlessly The Pinterest shopping ecosystem 67
Slide 68: Increasing shoppable content
Increasing shoppable content Making the content across Pinterest more shoppable Shop the Look And merchants are getting value 70% 10% of the products recommended lift in conversion when first are rated as exact or users engage with Shop highly relevant matches1 the Look module2 Fully launched Q2 202
Slide 69: Improving shopping recommendations
Improving shopping recommendations AI and signals from multi-session shopping journeys will supercharge personalization capabilities +50% YoY increase in buyable items saved in Q2 2023 Pinterest Internal Data as of June 2023 69
Slide 70: Connecting users and merchants seamlessly
Connecting users and merchants seamlessly Mobile Deep Linking Enabling a seamless handoff to our retail partners for checkout Mobile Deep Linking drives a Direct Links drives 235% 88% lift in conversion rates compared increase in outbound clicks when we to previous experience1 removed the intermedia
Slide 71: Scaling ads
Scaling ads Ads are helpful content, when relevant Shopping Ad format has 2.5x the average click through rate vs. other ad formats Pinterest Internal Data as of June 2023 The Pinterest shopping ecosystem 71
Slide 72: Accelerating the ads opportunity with Amazon Ads
Scaling ads Accelerating the How it works? Amazon Merchants who buy Sponsored Product ads on Amazon are ads opportunity automatically opted in, and their ads can also show up on Pinterest. with Amazon Ads Pinterest sees shopping intent, then as our first of many equests relevant ads from Amazon 3P p
Slide 73: Scaling 3P demand
Scaling ads Opportunities to replace existing, less Opportunities to Amazon 3P demand relevant ads and increase auction density increase ad load is improving ad relevance across More contextually Pinterest surfaces relevant Increasing ad relevance enables a Ads appear like native higher ad load wher
Slide 74: Our unique flywheel: ads are content on Pinterest
Our unique flywheel: ads are content on Pinterest Shopping accelerates our unique flywheel where relevant ads boosts user engagement The Pinterest shopping ecosystem 74
Slide 75: Opportunity to scale monetization across additional verticals
Opportunity to scale Travel Local commerce (e.g., wedding planning, monetization across home design, local services) additional verticals 100% increase in YoY searches for dream vacation destinations Pinterest Internal Data as of August 2023 The Pinterest shopping ecosystem 75
Slide 76: Key takeaways
Key takeaways 1 Users come to Pinterest with active shopping intent. We are enabling multi-session shopping journeys, providing users with opportunities to easily go from inspiration to action across the platform 2 We pivoted our shopping efforts meaningfully last year, and brought shopping into the
Slide 77: Our advertisers and ads product innovation
Our advertisers and ads product innovation
Slide 78: Agenda
Agenda 1 Growth and increasing diversity of our advertiser base 2 The differentiated value we offer to advertisers 3 Key innovations that are driving our growth 4 Go forward advertiser solution priorities Our advertisers and ads product innovation 78
Slide 79: Growing and diversified advertiser base
Growing and diversified advertiser base # of Quarterly Active Advertisers (Global)1 Revenue growth 4-Year CAGR across regions1 Pinterest has less than 1% of total CAGR Q2 2019-Q2 2023, UCAN +23% market based on 2022 global Constant Currency digital Ad dollar market size2 Europe +68% Europe + RoW = 2
Slide 80: How we serve advertisers today
How we serve advertisers today Large advertisers SMB advertisers Opportunity Full-funnel solution serving multiple objectives Growth strategy Increase share of wallet Acquire, retain, and grow advertiser partners Sales and Partnership • Full Time Salesforce and vertical specific support • Full Time
Slide 81: Full-funnel solution that mirrors a user's journey
Pinterest offers our advertisers a full-funnel solution that mirrors a user’s journey Global Revenue Breakdown (LTM ending Q2’23) Over half Discover 34% Upper of large advertisers have optimized for brand awareness funnel multiple campaign objectives Increased lower-funnel Decide functionality for a
Slide 82: Comprehensive ads platform for our advertisers
Comprehensive ads platform for our advertisers Representative Representative AI-powered Ad Measurement ad serving formats solutions User Journey Advertiser objectives Premiere Spotlight Upper Brand Lift Discover Grow brand awareness (1st and 3rd party) funnel Max Width Video Showcase Ads Conversion
Slide 83: Driving conversion visibility with API for Conversions
Driving conversion visibility & attribution with API for Conversions Increased measurable performance Product overview Industry context +28% lift in conversions for adopters1 A server-to-server integration As a cookieless future becomes (online and offline) enables a reality, conversion visibility i
Slide 84: Our advertising solutions deliver clear, positive results
Our advertising solutions deliver clear, positive results 95% +14% pts +45% of large advertisers provided YoY increase in advertiser increase in ROAS when their goals to Pinterest when campaigns meeting their goals using Pinterest first-party (Q2’23 LTM)1 targeting signals, compared running an adver
Slide 85: Key innovations that have driven growth
Key innovations that have driven growth
Slide 86: Ads product focus areas
Ads product focus areas AI powered Ad formats Expanded Ease of use and Creative solutions across full measurement automation tools funnel solutions Our advertisers and ads product innovation 86
Slide 87: Innovating with more velocity than ever
Innovating with more velocity than ever YTD in 2023 we’ve launched more products than in any year in our history 3P ad demand auction integration Outbound click optimization Premiere Spotlight AI powered solutions MDL (consideration, Ad formats across full funnel conversion, catalog sales) Native Br
Slide 88: AI powered solutions
AI powered solutions Whole Page AI investments driving significant Optimization enabling gains in advertiser performance growth in relevant ad load Our advanced AI (including large-scale models—100x increase in size) and Whole Page Optimization enables us to flex ad load in high-intent moments +30%
Slide 89: Ad formats across full funnel: Premiere Spotlight and Showcase
Ad formats across full funnel New formats driving performance for brand advertisers Premiere Spotlight and Showcase Ads are new high-impact formats for upper funnel campaigns Premiere Spotlight Showcase Ads High-impact video ad placement Creative solution for brands to to maximize reach on Pinterest
Slide 90: Lead Ads and Quiz Ads
Ad formats across full funnel Lead Ads and Quiz Ads help brands move users from discovery to decision New native formats helping advertisers acquire qualified prospects Lead Ads Quiz Ads Help advertisers quickly Interactive ad experience that capture high quality leads using drives deeper engagement
Slide 91: Catalog innovations
Ad formats across full funnel Catalog innovations are driving increased performance for brands We’re scaling our product catalog technology to more formats and verticals Video in shopping catalogs Travel Catalogs Enable video for shopping catalog ads Turn static travel ad into a dynamic (feed-based)
Slide 92: Lower funnel value through clicks and conversions
Ad formats across full funnel Providing advertisers more lower funnel value through clicks and conversions Seamless one-click handoff makes it easy for users to purchase Mobile Deep Linking Direct Links Allows merchants to direct users to Catalog ads, consideration and a specific page in their app,
Slide 93: Expanded measurement solutions
Expanded measurement solutions Understanding performance via privacy-centric measurement We’re proving our performance to advertisers with a wide variety of new partnerships and solutions We’ve added new solutions Incrementality measurement Cross-channel measurement and partnerships to meet advertis
Slide 94: Ease of use and automation
Ease of use and automation It’s now easier for advertisers Business Manager suite enables agencies and advertisers to centralize and collaborate more efficiently by managing and agencies to create and Pinterest the same way they manage their businesses manage their campaigns We sat down with key adv
Slide 95: Investments in automation improve performance
Ease of use and automation Investments in automation have improved performance and budget utilization Auto-bidding efficiently spends HomeUniversal | 5465123 budget while maintaining CPA 85% of global revenue runs on automated bidding and budgeting in Q2’23 Pinterest Internal Data as of June 2023 Ou
Slide 96: Creative tools: split testing
Creative tools Split testing enables advertisers to optimize creative performance at scale Enabling advertisers to test creatives to A understand and scale what performs best B Our advertisers and ads product innovation 96
Slide 97: Creative Studio uses Generative AI
Creative tools Creative Studio uses Generative AI to produce inspiring ad imagery Helping advertisers create more engaging ads from their existing assets This product is currently in testing. Screens for illustrative purposes only. Our advertisers and ads product innovation 97
Slide 98: Coming in 2024
Coming in 2024! Fully-automated end- New product Ease of use & across to-end ad solution automation full funnel We’ll launch a fully-automated ad product to enable advertisers to get even better results with less effort AI powered solutions Expanded Creative measurement solutions Our advertisers and
Slide 99: Go-forward advertiser priorities
Go-forward advertiser priorities
Slide 100: Key advertiser solution priorities
Key advertiser solution priorities Increased lower Full funnel Further vertical International Greater funnel clicks & video solution diversification growth partnership conversions sales Our advertisers and ads product innovation 100
Slide 101: Driving growth through a holistic lower-funnel solution
Driving growth Additional lower-funnel offerings Significant through a holistic gaining traction headroom [Format] Shopping Ads2 lower-funnel 1 +47% YoY growth; 14% of total revenue (Q2’23) advertiser solution 57% 2a [Clicks & Conversions] Mobile Deep Linking (Jul’23)3 Results: 235% lift in conversi
Slide 102: Our full-funnel video ads solution
Driving growth Our full-funnel video ads solution Large share of revenue, through a holistic across the funnel [Format] Standard Video full funnel video 1 and Max Width Video • Leverage these formats for advertiser solution all advertising objectives 39% of revenue from video ads [Upper Funnel] Prem
Slide 103: Extending our impact across verticals
Extending our impact across verticals Extending from CPG & Retail to verticals beyond our traditional focus Demonstrated traction New offerings highly applicable for non-Retail, non-CPG verticals 2022 US TAM1 and Pinterest Revenue YoY growth2 Travel Travel Automotive Financial Services Pinterest 73%
Slide 104: Expanding in Europe and Rest of World
Expanding in Europe and Rest of World Opportunity Large opportunity Demonstrated traction Addressable markets1 $255 Select markets $2.50 $2.24 2022 eMarketer Global Digital $183 demonstrate European ARPU potential2 Advertising TAM by $111 Country ($ in billions) Q2’23 $0.91 Europe RoW UCAN Europe UK
Slide 105: Growth strategy for existing budgets
Expanding in Europe and Rest of World Growth strategy for existing budgets Applying UCAN winning strategies Efficient growth and scale via partnerships 1 15% Third-Party Demand Shopping Ads format (% of revenue) 9% 3P strategy expansion beyond US to bring additional demand 6% Agencies Europe RoW UCA
Slide 106: Growth strategy for new budgets
Expanding in Europe and Rest of World Growth strategy for new budgets Increasing demand in non-monetized markets Opportunity Monetizing demand from new markets not yet accessed today, which represent 13% of global TAM1 Growth strategy Export monetization to UCAN & Europe New markets monetization Sal
Slide 107: Key takeaways
Key takeaways 1 We have a growing and diversified advertiser base 2 Pinterest delivers a unique AI-powered full-funnel solution and we’re accelerating ads product velocity & success with all verticals 3 We are delivering more clicks and conversions directly to all global advertisers 4 We are focused
Slide 108: Chief Marketing Officer perspectives
Chief Marketing Officer perspectives
Slide 109: It's never been harder to be a CMO
It’s never been harder to be a CMO Chief Marketing Officer perspectives 109
Slide 110: The Pinterest difference
The Pinterest difference Only true Predictive insights A uniquely full funnel into tastes, interests, positive online solution and intent environment Chief Marketing Officer perspectives 110
Slide 111: Meet our panel
Meet our panel William White Tracy-Ann Lim Morgan Brown Shenan Reed Chief Marketing Officer Chief Media Officer Head of Performance Marketing SVP, Head of Media Chief Marketing Officer perspectives 111
Slide 112: AI and Pinterest
Aland Pinterest Jeremy King Chief Technology Officer @ Pinterest Investor Day
Slide 113: Agenda
Agenda 1 Industry leading AI team 2 AI at Pinterest leverages unique signals 3 World-class AI platform 4 Delivering for users, advertisers and Pinterest 5 The next chapter: Generative AI and Pinterest 113
Slide 114: Our AI team is exceptional
Our AI team is exceptional Recent awards In Visual AI, we have build for over a decade one of 2023 2022 the best sandboxes in the world Best Workplaces Brands That Matter for inclusive Leadership in Recommender Systems, Inclusive AI for Innovators AI and industry-leading policies and especially in V
Slide 115: Our AI models leverage our truly unique signals
Our AI models leverage First party intent signals + feedback loops our truly unique signals Raw data Patterns Pin2Board associations High-quality intent signals based on what users do on Pinterest and product associations they create Liked shoes 1.5B Athletic shoes saves per week by Cocktail hour cl
Slide 116: World-class AI platform
World-class AI platform Scaling AI without scaling cost2 Driving scale, speed to market and cost efficiency with our world-class AI Platform Non-GAAP COR YoY Growth Engagement Early movers in scaling AI model size with 1 14% GPU-serving with minimal infra spend growth 43% 13% 12% 10% +100x 1x 27% mo
Slide 117: Benefitting users
Benefitting users When our AI talent trains models using our unique user intent signals, we set industry standards • We have seen >60% better lift in saves per user by incorporating our intent signals into our image understanding models vs. without those signals1 When we apply to user needs: • Our A
Slide 118: Benefitting advertisers
Benefitting advertisers AI-driven optimizations power our ads delivery funnel Compared to 2022, we’ve grown our model size by 100x, allowing us to deliver more relevant and engaging ads to users1 Whole page optimization (launched in Q4 2022) is our first step in personalizing and optimizing the user
Slide 119: Benefitting shopping
Benefitting shopping As we continue to develop boards and atomization, our unique product association advantage will make us further outperform We have deployed large Visual AI models (billion+ variables) that drove +7% increase in visual shopping relevance1 Leveraging the product catalog, using AI
Slide 120: Enhancing inspirational tools with Generative AI
Enhancing the inspirational tools that are native to the Pinterest platform with Generative AI Combining state-of-the art industry models with our unique, high-quality signals to create differentiated experiences Gen AI improves Ads In Development Gen AI improves user experience Generated Personaliz
Slide 121: Key takeaways
Key takeaways 1 Pinterest has an industry leading AI team, especially in visual AI 2 AI at Pinterest leverages unique intent-based signals, which we use to train models to dive engagement and user satisfaction across products 3 Our AI platform fuels Pinterest’s ability to achieve scale, speed to mar
Slide 122: Financial overview
Financial overview Julia Donnelly Chief Financial Officer @ Pinterest Investor Day
Slide 123: Our business priorities
Our business priorities … Growing users Improving Driving profitable and deepening monetization per growth engagement user (ARPU) Financial overview 123
Slide 124: Inform our financial framework
… inform our financial framework Growing users Improving Driving profitable and deepening monetization per growth engagement user (ARPU) Durable revenue Improving Disciplined growth profitability capital allocation Financial overview 124
Slide 125: Our financial profile since IPO
Our financial profile since IPO: scale, growth and profitability Revenue Adjusted EBITDA $2.9B $407 ~35% CAGR ( $ $—39) $0 $. 7 756B 56 IPO (FY’18) LTM (Q2’23) IPO (FY’18) LTM (Q2’23) Adj. EBITDA Margin % (5)% 14% Note: Pinterest IPO on 17-Apr-2019; FY2018 is the first available full fiscal year dat
Slide 126: The next 3-5 years: accelerating growth + profitability
The next 3–5 years: accelerating growth + profitability August ‘23 Earnings Call Our 3-5 Year Targets High single Mid-to-High Revenue digit range Expected to grow faster Growth teens CAGR than market growth (guidance for Q3 ‘23) ~400bps of YoY Committed to healthy Adjusted EBITDA Margin Low 30’s % p
Slide 127: Durable revenue growth
Durable revenue growth
Slide 128: Executing against a massive opportunity
Executing against a massive opportunity $550B US & Canada: $255B Europe: $111B Digital RoW: $183B advertising spend1 $2.8B Pinterest FY2022 revenue US & Canada: $2.3B Europe: $0.4B RoW: $0.1B 1 Insider Intelligence | eMarketer | Note: Worldwide Global Digital Advertising Spend Forecast as of Q1 2023
Slide 129: The market is growing, and we are growing our share
The market is growing, and we are growing our share Digital advertising spend ($B) Estimated future CAGR Pinterest vs. market historical growth 2023E-2025E: 10% (2019-2022 CAGR) Historical CAGR 2019-2022: 18% $735 35% $668 $602 $550 $506 $390 18% $337 2019 2020 2021 2022 2023 2024 2025 Digital adver
Slide 130: Key growth drivers
Key growth drivers Our Revenue Model Users 1 Global MAU growth Engagement 2 Engagement growth outpacing MAU growth Monetization Ad Load 3 Ad load is synergistic with engagement, and increasing Ad Pricing 4 Ad pricing tailwinds driven by lower funnel solutions Revenue 5 3P and international additiona
Slide 131: Continued global user growth
1 Continued global user growth MAU YoY Growth Forward (Q2’23) (Q2’23) trajectory Consistent with UCAN 95M 3% recent quarters Faster than Europe 124M 6% UCAN Faster than RoW 246M 10% Europe Global 465M 8% Financial overview 131
Slide 132: Growing users and engagement outpacing MAU growth
2 Growing users and deepening engagement Growing users and engagement outpacing MAU growth Global MAU has returned to YoY growth Engagement growth faster than user growth (in millions) COVID pull-forward Refined strategy and unwind and focus 14% 459 465 13% 450 431 12% 10% 335 A GR 28% C 8% 265 7% 2
Slide 133: Our unique flywheel: ads are content on Pinterest
3 Our unique flywheel: ads are content on Pinterest User signals+personalization+relevant ads increase user engagement Financial overview 133
Slide 134: Ad load is synergistic with engagement
3 Ad load is synergistic with engagement, and increasing Drivers of ad Ad impression growth driven by engagement growth and ad load growth impressions Q3’22 Q4’22 Q1’23 Q2’23 Global total impressions1 WPO 33% 33% launches 22% Global ad load % 15% Global ad impressions Y/Y Growth Total impressions co
Slide 135: Pricing drivers as we grow lower funnel solutions
4 Pricing drivers as we grow lower funnel solutions Drivers Grow lower funnel revenue mix • US lower funnel pricing is meaningfully higher1 than upper funnel pricing, even as we are early in the adoption of our lower funnel solutions Deliver more value (clicks, conversions) to advertisers in the low
Slide 136: Third party strategy drives additional upside
5 Third party strategy drives additional upside Improving ad relevance across Pinterest surfaces +50% +100% improvement in improvement in relevance of 3P Ads on relevance on Related Search vs. current ads1 Pins vs. current ads2 Amazon the first of additional expected partners Improved ad relevance e
Slide 137: Renewed focus on international strategy: Europe
5 Renewed focus on international strategy: Europe Significant increase in monetization in Europe 3.5x ARPU expansion in 3 years $0.86 $0.91 $0.72 $0.26 Q2’20 Q2’21 Q2’22 Q2’23 Leading European markets monetize at premium ARPU 1 (Q2’23) $2.50 2.24 $0.91 Europe UK Germany Accelerate monetization of us
Slide 138: Renewed focus on international strategy: Rest of World
5 Renewed focus on international strategy: Rest of World Monetization early with demonstrated progress 6x+ ARPU expansion in 3 years $0.12 $0.10 $0.06 $0.02 Q2’20 Q2’21 Q2’22 Q2’23 Significant upside remains (RoW ARPU Q2’23) $3.76 $0.12 META PINS User growth and ARPU upside are key growth drivers 3P
Slide 139: Improving profitability
Improving profitability
Slide 140: Delivering profitability with renewed focus on cost discipline
Delivering profitability with a renewed focus on cost discipline Track record of profitability $1.7B cumulative Adj. EBITDA generated since 2019 12 straight quarters of positive Adj. EBITDA 4/4 years as a public company with positive Adj. EBITDA Renewed focus on cost discipline Adjusted EBITDA Margi
Slide 141: Increased recent focus on cost optimization
1 Gross margin is calculated as Revenue less non-GAAP cost of revenue as % of revenue 2 Pinterest Internal Data as of June 2023 | Note: Engagement includes the basket of metrics: saves, impressions (include both paid and organic impressions), and engaged sessions (1min or greater) Increased recent f
Slide 142: Path to increased profitability at scale
Path to increased profitability at scale Adjusted EBITDA Margin bridge Low 30’s % Adj. EBITDA Margin in next 3-5 years 400 bps YoY Adj. EBITDA Margin expansion as guided from Q2 Earnings 16% 2022A 2023E COR S&M R&D G&A 3-5 Year Optimization Efficiency Leverage Leverage Target Cost of Revenue • Infra
Slide 143: Our 3-5 year targets: building blocks to profitability expansion
Our 3-5 year targets: building blocks to profitability expansion Long Range target LTM 3-5 year target (all metrics are Non-GAAP) 2018 2019 2020 2021 2022 (at IPO) (Q2 2023) (today) Gross Margin 68% 71% 74% 80% 76% 72—76% 76% 76—80% OpEx as % 76% 72% 58% 49% 61% 47—53% 62% 45 -51% of revenue EBITDA
Slide 144: Capex light model generates significant cash flow
Capex light model generates significant cash flow Drivers of strong cash flow generation • Asset light business model with minimal capex • Minimal shifts in working capital Free Cash Flow as % of Adj. EBITDA 100% 91% 91% FY21 FY22 LTM (Q2’23) Note: Free cash flow is calculated as Net cash provided b
Slide 145: Disciplined capital allocation
Disciplined capital allocation
Slide 146: Capital allocation framework
Capital allocation framework Product and Balance sheet Disciplined Opportunistic, technology optimization dilution disciplined M&A innovation management
Slide 147: Optimizing our Balance Sheet
Optimizing our Balance Sheet Cash balance over time (in millions) $2,698 $2,480 $2,295 $1,713 $1,760 FY19 FY20 FY21 FY22 Q2’23 Robust cash balance Undrawn revolver capacity of $400M No financial debt Note: $ in millions; Cash includes cash and cash equivalents and marketable securities.
Slide 148: Disciplined in managing dilution
Disciplined in managing dilution Recent increased focus on managing dilution Fully Diluted Shares (in millions) 3.5 Year CAGR: 2% (2)% 754 740 704 709 684 YE2019 YE2020 YE2021 YE2022 Q2’23 3% 1% 6% % YoY Change Key dilution management strategies • Net share settlement implemented in Q2’22 • $500M sh
Slide 149: Key takeaways
Key takeaways 1 Multiple levers for growth, including users, ARPU, 3P, and international opportunities 2 Re-accelerate revenue growth to mid-to-high teens CAGR over the next 3-5 years 3 Operational rigor to continue expanding profitability to low 30% Adjusted EBITDA Margin in the next 3-5 years 4 Di
Slide 150: Closing remarks
Closing is . remarks ~ Bill Ready CEO. @ Pinterest Investor Day
Slide 151: Closing remarks
Closing remarks 1 Pinterest has truly unique content because of the curation at scale on our platform, which provides deep signal on user intent Users come to Pinterest to shop, which should drive 2 engagement and higher monetization, especially as we open up the platform to 3P partners 3 We’ve sign
Slide 152: Appendix
Appendix
Slide 153: Consolidated Quarterly Statement of Operations
Consolidated Quarterly Statement of Operations Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Revenue $ 574,885 $ 665,930 $ 684,550 $ 877,209 $ 602,581 $ 708,025 Costs and expenses: Cost of revenue 146,070 164,896 182,603 185,028 170,926 168,740 Research and development 195,548 233,508 254,684 265,240 266,346
Slide 154: GAAP to Non-GAAP Costs and Expenses reconciliation quarterly
GAAP to Non-GAAP Costs and Expenses reconciliation quarterly Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Share-based compensation by function: Cost of revenue $ 1,194 $ 1,417 $ 2,189 $ 2,829 $ 2,309 $ 2,740 Research and development 52,890 81,436 89,669 100,166 94,265 108,580 Sales and marketing 11,769 18,50
Slide 155: GAAP to Non-GAAP Adjusted EBITDA and Free Cash Flow reconciliation quarterly
GAAP to Non-GAAP Adjusted EBITDA and Free Cash Flow reconciliation quarterly Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Reconciliation of net income (loss) to Adjusted EBITDA: Net income (loss) $ (5,281) $ (43,076) $ (65,181) $ 17,491 $ (208,579) $ (34,942) Depreciation and amortization 7,220 9,135 10,529
Slide 156: Consolidated Annual Statement of Operations
Consolidated Annual Statement of Operations Year Ended 2018 2019 2020 2021 2022 LTM Revenue $ 755,932 $ 1,142,761 $ 1,692,658 $ 2,578,027 $ 2,802,574 $ 2,872,365 Costs and expenses: Cost of revenue 241,584 358,903 449,358 529,320 678,597 707,297 Research and development 251,662 1,207,059 606,194 780
Slide 157: GAAP to Non-GAAP Costs and Expenses reconciliation annually
GAAP to Non-GAAP Costs and Expenses reconciliation annually Year Ended 2018 2019 2020 2021 2022 LTM Share-based compensation by function: Cost of revenue $ 83 $ 31,758 $ 7,865 $ 7,438 $ 7,629 $ 10,067 Research and development 13,155 867,191 218,718 309,715 324,161 392,680 Sales and marketing 784 239
Slide 158: GAAP to Non-GAAP Adjusted EBITDA and Free Cash Flow reconciliation annually
GAAP to Non-GAAP Adjusted EBITDA and Free Cash Flow reconciliation annually Year Ended 2018 2019 2020 2021 2022 LTM Reconciliation of net income (loss) to Adjusted EBITDA: Net income (loss) $ (62,974) $ (1,361,371) $ (128,323) $ 316,438 $ (96,047) $ (291,211) Depreciation and amortization 20,859 27,