Pinterest(US:PINS)2023-10-31 01:30Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was $763 million, representing an 11% increase year-over-year, marking the third consecutive quarter of accelerating revenue growth [20][28] - Adjusted EBITDA was $185 million, with a margin of 24%, reflecting a 1,300 basis point improvement from the previous year [22][28] - Monthly active users reached 482 million, up 8% year-over-year, achieving an all-time high [5][42] Business Line Data and Key Metrics Changes - Revenue from the U.S. and Canada was $618 million, an 8% increase, with notable strength in CPG, retail, and emerging categories [70] - Europe generated $114 million in revenue, growing 33%, driven by strong performance in CPG and emerging verticals [70] - Revenue from the Rest of World was $31 million, up 29%, indicating robust growth in international markets [70] Market Data and Key Metrics Changes - Ad impressions grew by 26%, driven by increases in total impressions and ad load [21][65] - The price of ads declined by 12%, an improvement from the 20% decline seen in the previous quarter, attributed to industry-wide demand stabilization [21][22] Company Strategy and Development Direction - The company aims for a mid to high-teens compound annual growth rate in revenue and to expand adjusted EBITDA margins to the low 30% range over the next three to five years [30] - Focus areas include growing users and engagement, improving monetization, and delivering profitable growth through operational rigor [30][40] - The integration of AI to enhance content recommendations and shopping experiences is a key strategic initiative [8][16] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are headwinds in the advertising industry, particularly in brand advertising, there are also tailwinds from shopping and direct response initiatives [49][50] - The company expressed confidence in its ability to execute in the upcoming quarter, bolstered by recent product improvements [99][100] - Management highlighted the importance of third-party partnerships, such as with Amazon, in driving future growth and relevance [82][87] Other Important Information - The company has migrated approximately 60% of its lower funnel revenue to Direct Links, which simplifies the shopping experience for users [12][94] - Non-GAAP operating expenses were $415 million, down 4% year-over-year, reflecting effective cost management [44] Q&A Session Questions and Answers Question: How would you characterize the headwinds from advertising dynamics versus the tailwinds from shopping? - Management acknowledged headwinds in brand advertising but emphasized the positive impact of shopping and direct response initiatives on revenue growth [49][50] Question: What is the sustainability of the trend of increasing ad load? - Management indicated that there is significant room for ad load growth, especially as user engagement continues to deepen [61][91] Question: How much of the growth is from new advertisers versus higher budget allocation from existing advertisers? - Management noted that retail has been the largest contributor to growth, driven by larger, sophisticated advertisers, while new advertisers are also entering the platform [108]