International gains helped counter slightly sluggish U.S numbers
Pinterest posted a modest 4% year-over-year revenue gain in the second quarter, totaling $272 million, well above the consensus of $250 million.
The company said in its earnings report Friday morning that through July 29, revenue growth for July was roughly 50% higher than July 2019, adding that while it was encouraged by the numbers, uncertainly remains due to the Covid-19 pandemic and other factors.
Pinterest projected that its third-quarter revenue will rise in the mid-30% range year-over-year, adding that it continues to evaluate its spending with an eye toward remaining prudent in the near-term while at the same time investing in and prioritizing long-term growth.
The U.S. accounted for $232 million of the company’s revenue in the second quarter, down 2% from the year-ago period, and Pinterest attributed the decline to compression in ARPU (average revenue per user).
The company fared better internationally, with non-U.S. revenue of $41 million up 72% year-over-year and accounting for 15% of its total, compared with 9% in the second quarter of 2019. Pinterest said the growth was driven by a rise in monthly active users and ARPU gains.
“In these tough times, we’re seeing more and more people rely on Pinterest to cook at home, plan kids activities and set up a home office,” co-founder and CEO Ben Silbermann said in a statement. “Businesses are helping them turn their ideas into reality as people are increasingly discovering and buying products on Pinterest.”
Pinterest shot well past its 400 million users milestone, finishing the quarter with 416 million MAUs, up 39% year-over-year and well over the consensus of 379 million. The company topped the 300 million mark in the second quarter of 2019.
Chief marketing officer Andréa Mallard added more context in a blog post this morning, saying that while women still account for over 60% of Pinterest’s user base, there have been year-over-year surges in the Gen Z (50%), men (48%) and millennial (36%) demographics.
Gen Z is coming to Pinterest to search for ideas on social good, future growth, beauty inspiration and wardrobe, Mallard said, while men are eyeing personal betterment, home upgrade ideas and creative inspiration. Millennials are looking for inspiration on life skills, family-friendly ideas and tips for adjusting to the new normal.
Pinterest reported 96 million MAUs in the U.S., up 13% compared with the year-earlier period, with the company adding that it experienced particularly strong growth from “resurrected users,” or people returning to the platform after having been dormant for some time.
International MAUs rose 49% year-over-year in the second quarter, reaching 321 million, and Pinterest said this growth exceeded the typical seasonal trend, driven by unique circumstances including Covid-19. The company expects this pace to slow going forward, both year-over-year and quarter-over-quarter.
Moving forward, Pinterest said it remains committed to its four strategic priorities.
- Inspiring content: Daily video views (organic and paid) grew by more than 150% year-over-year in the second quarter, while unique video uploads were up over 600%. Pinterest also highlighted its curated Today tab, and said people who joined in the early stages of the pandemic were more engaged that a cohort of new users in the year-ago period.
- Shopping: Pinterest said ingestion of catalogs on its platform was up over 350% quarter-over-quarter and grew 10 times during the first half of the year, driven largely by its integration with Shopify, which became generally available in May. The percentage of users visiting shopping-only areas was up by more than 50% in the first half of the year, while product-only searches spiked by a factor of eight.
- Advertiser diversification and delivering value: Revenue from conversion optimization and shopping ads grew at a faster pace than overall revenue during the second quarter, with attributed conversions up 2.7 times year-over-year, exceeding the level it reached during the fourth quarter of last year, which is typically the most conversion-heavy quarter due to the holiday shopping season.
- Ease of use: Pinterest said its total advertiser growth accelerated year-over-year, and spend from mid-market and managed small and mid-size businesses represented nearly one-half of its total revenue, driven by improved automation tools for advertisers and international momentum.
“By all accounts, this was a challenging quarter, as Covid-19 continued to spread. I’m pleased with the way we responded and remained engaged with our advertising partners,” chief financial officer and head of business operations Todd Morgenfeld said in a statement. “It has been encouraging to see the recovery in our business over the past few months, but there is still a tremendous amount of uncertainty and work to be done.”