Pinterest CEO Bill Ready Talks 2nd Quarter Earnings
08:58 Share

You're listening to an iHeart Podcast. When you're with Amex Business Platinum, going the extra mile for your business pays off.

With five times membership rewards points on flights and prepaid hotels booked through amextravel.com, you can earn more points to help grow your business. And with access to more than 1,400 lounges globally through the American Express Global Lounge Collection, including the Centurion Lounge. Can I get you a refill? You can stay fresh wherever your business travel takes you. That's the powerful backing of American Express. Terms apply. Learn more at americanexpress.com slash amexbusiness.

Bloomberg Audio Studios. Podcasts, radio, news. Pinterest is ending the week on a high note. The company's second quarter revenue topping guidance, easing investor concerns about an advertising slowdown. Pinterest also saying that its AI investments are beginning to pay off. The CEO of the company, Bill Reddy,

saying, our ability to leverage AI to personalize our users' experience is a key differentiator. It also makes us a highly valuable partner to advertisers. He joins us now along with Bloomberg Technologies' Caroline Hyde. Bill, thanks for coming on the program. Really appreciate it. I'm fascinated by...

really the sell-through revenue that you can get. Not as much the advertising, but because of the way I use the internet, because of the way I want to use Pinterest, I search for things that I want or need and I want to just click through and buy them. How much closer are you to making that a very profitable reality? - Yeah, we've had a huge transformation in our business over the last three years where we've really made Pinterest a shopping destination for our users.

And exactly to your question, you know, Pinterest historically was great for window shopping, but you really couldn't click or take action. Over the last three years, we've really opened up those stores. So it's not just window shopping. Now you can easily click and purchase with some really seamless examples. You can link your Amazon account. You can have a one-click buying experience right inside of our app. And there's a lot that we're doing to really drive clicks and conversions and sales for advertisers. But for our users, it's just really great shopping and seamless buying right on our platform.

And let's just talk about the resilience of those consumers, the buying and indeed the advertisers, Bill, because it's not exactly a feeling of economic nirvana out there right now, but still you're managing to give us a forecast unlike rivals in the social media space. What gives you that clarity? What gives you that resilience in the business?

Well, you know, back to what we've done for our users in turning Pinterest into a shopping destination. Pinterest is where Gen Z goes to shop. Gen Z is now our largest, fastest growing demographic, over 40% of our users. And, you know, they're coming here to shop. We're giving them a great shopping destination.

But that has allowed us to deliver great performance for our advertisers. We've delivered a performance advertising platform where advertisers can get clicks and conversions and great performance. We're giving them AI enabled tools so it's easier than ever for them to go create campaigns on Pinterest.

and see really great returns on that. So that's the other side of the business is that we've made Pinterest a shopping destination. 85% of our users come to us directly and then we connect them with advertisers and make it really easy for advertisers to connect with those users in this moment where they're in market

looking for something to buy but haven't decided what to buy, that's a great moment for those two to meet. And we see that continue to accelerate. We're at all-time highs on users and all-time highs on depth of engagement per user, really driven by AI and the personalization there and then how we're connecting shoppers and sellers.

So is that keeping the likes of Timu and Sheen, who a lot of those Gen Zs are going to, to buy on your platform? Is that sticking around? Because many had worried because of the tariffs, because of the difficulty accessing the U.S. and consumer in terms of price point, what we'd see retrenchment in terms of ads from those companies. Yeah. Well, we're a global platform. We're over 570 million users. 80% of those are outside the U.S. And so we noted as others that for Asian cross-border sellers,

You know, that has slowed down coming into the U.S., as others have noted as well. But we're seeing those sellers sell more globally, and we're helping them to connect to other markets around the world. Here in the U.S., consumers are resilient. You know, there's lots of public spending information that says that consumers are still shopping. We went through a major supply chain disruption just a few years ago during the pandemic.

And we all saw things are out of stock and consumers found other ways to buy, other things to buy. And we see that happening on our platform that while you have things like budget conscious searches, like budget friendly recipes or budget party decorations, budget party favors and those kinds of things up 200% plus year on year.

People find substitute products. They find other ways to go sort of bring delight into their life. And we're a great place to help them do that and a great place for advertisers to see these shifting consumer trends.

So I'm fascinated. Did you say 80% of your users are outside of the U.S. or that U.S. consumers? Approximately, yes. Approximately 80% of our users are outside the U.S. What's the mix of sales? So for U.S. consumers, you know, I'm looking at stuff all the time that's...

Aero Leathers in Scotland or the real McCoys in Tokyo. So all of the products that I'm looking for, for the most part, except for Wesco boots in California, are coming from overseas. What's the mix right now for US shoppers through Pinterest on overseas products versus made in the USA stuff?

Well, I would say we track the market generally on that. But the opportunity for us with 80% of the users being outside the U.S. is that we have 80% of our users outside the U.S., but roughly only 20% of our revenue outside the U.S. So the shopping playbook that we've created over the last few years is really working in North America for us. We're now exporting that to other markets, and we're seeing that shopping playbook really take hold in other markets as well.

So that's a big part of our forward-looking opportunity. And here in the U.S., we continue to grow rapidly as well, particularly on our depth of engagement, really making Pinterest a shopping destination. And again, consumers are resilient. If some things are unavailable to them, they're going to be creative and find other ways to buy. And even if their pocket gets pinched,

We are a place for intentional purchases, not just impulse purchases. So we see highly considered purchases on our platform. Our users are planful. And so if they go through a moment where they need to be a little more thoughtful about what they buy or a little bit more creative about where to get it, that's exactly what people do on our platform. We think that'd be a great moment for us to shine. - You talk about that depth of engagement and in many ways that's driven by the AI investment you've made and the fact that you're personalizing it. You call it a differentiator.

How is it differentiating you when we see Meta also plowing a lot of money into AI and offering that to advertisers too? What's the secret sauce that you've had? So for us, you know, the really unique thing on our platform is that Pinterest is the only place in the Western world where users not only shop, but they also curate. So, you know, there's plenty of other places through third-party cookies and things like that that could say they know everything you've bought and everything in your closet.

but they have no idea how you style that into an outfit. They don't know your taste. On Pinterest, hundreds of millions of people every day are styling their outfits, deciding what handbag to go with, what pair of shoes, with what dress. And so we learn people's taste. I talked about it on our call. Our taste graph has grown by over 75% over the last two years. And that really unique signal lets us train AI to be really, really personalized. And the way that manifests for our users, if you go ask a Gen Z user why they go to Pinterest, what they'll say is, Pinterest just gets...

gets me. Well, that is the use of AI trained on that really unique signal where we understand not only their style and taste, but when somebody else bought that same handbag, how did they put an outfit together around that? That is really, really great personalization that's really helpful to our user. And again, totally unique in that signal that we have that we're able to do differentiated things with AI.

because of that unique signal from the curation that users do on our platform. - I'm wondering about partnerships. You mentioned recipes earlier, and that's probably the main thing that I do on a daily basis with Pinterest. I save recipes that I like there, and then I go to Pinterest when I'm ready to cook them. Can you partner up with, for example, an Instacart to use your AI, find all the ingredients I need, and then say, like, you know, click this button to order all the stuff you need for this recipe?

What we're seeing is that our visual search technology is working across many, many categories. Shopping has been a first area of focus for us, but there are many adjacent categories that it works for. And the way we think about that is partnering closely with great retailers, great brands to connect them directly to a customer. So I think those opportunities continue to abound.

In terms of that visual search capability, one of the things that we talked about on our call yesterday is we just launched a new multimodal AI model for our visual search.

that outperforms off-the-shelf models by over 30%. So just to make it really tangible how much better those recommendations are because of that unique signal, outperforming the best off-the-shelf models by over 30% gets to really just how unique our capabilities are there. And that makes us a great partner for many. And you've seen us partner with Amazon, you've seen us partner with large retailers, and we're now expanding that to more and more other great partners. And so there are many more forward opportunities for us on that.

All right, Bill, thanks so much for joining us on what must be a very busy day for you. Bill Reddy there, the CEO of Pinterest. There are presentations. And then there are Canva presentations. With Canva, you can use AI to take your presentation to the next level. You can generate dynamic slides and text with a simple prompt. You can drag and drop graphics and charts from Canva's media library and add interactive elements to plus up your deck. And with collaboration tools built in, the whole team can work together better.

You'll love the presentations you can easily design with Canva. Your clients and coworkers will too. Love your work with Canva presentations at Canva.com. You're listening to an iHeart Podcast. ♪