PINS Q2 2020 Earnings

Call Details

• Call Title: Pinterest Q2 2020 Earnings Call
• Date: July 31, 2020 at 12:30 PM UTC
• Management Team:
  • Jane Penner (Head of Investor Relations)
  • Ben Silbermann (President and Chief Executive Officer)
  • Todd Morgenfeld (Chief Financial Officer and Head of Business Operations)

Call Summary

Financial Performance

• Pinterest ended Q2 with 416 million monthly active users, representing year-over-year growth of 39%.
• Total daily video views grew over 150% year-over-year in Q2 across organic and paid video formats.
• Ad impressions grew 17% in Q2 while effective CPMs decreased 11% year-over-year in Q2.
• Catalog uploads from businesses increased by more than 350% from Q1 to Q2, and product-only searches have grown 8x in 2020.
• Headcount grew 21% year-over-year and 5% sequentially in Q2 while operating expenses declined slightly year-over-year in Q2 due to accelerated cost savings and work-from-home effects.
• Through July 29th, revenue growth accelerated to about 50% year-over-year for the period-to-date measurement referenced on the call.
• Nearly half of total revenue is now sourced from mid-market and managed small and medium business advertisers, per the discussion on advertiser mix.
• Auto bid adoption increased materially, with approximately 80% of CPC revenue flowing through auto bid as of the call.

Guidance

• Pinterest provided an informal outlook expecting Q3 revenue growth in the mid-30s percent range year-over-year.
• The Q3 outlook assumes a deceleration from the roughly 50% year-over-year growth seen quarter-to-date through July 29th.
• Key risks to the Q3 outlook listed include rising COVID-19 cases, potential new lockdowns, an atypical back-to-school season that may lower engagement, and uncertainty about the duration of advertiser boycotts of other platforms.
• The company noted that revenue growth comparisons will be more difficult in August and September 2019 relative to July 2019 due to product-change-related revenue variance last year.
• Pinterest withdrew annual guidance previously and emphasized heightened uncertainty while providing monthly performance disclosures instead of long-range numeric targets.
• OPEX is expected to grow in Q3 both sequentially and year-over-year as the company continues to invest across strategic priorities.