Pinterest Q4 Shows Favor With Gen Zs but Investors Want Faster Turn-Around

Pinterest may tout itself as the positive, politics-free visual discovery platform, but that upbeat vibe was lost on analysts Monday who felt its turn-around wasn’t happening fast enough.

This, as the San Francisco-based social media company said its Q4 earnings reflected gains in monthly active users, mobile users, Gen Z Pinners as well as video activity — all on the heels of a 45% six-month rally since new CEO Bill Ready took the helm.

“Our global mobile app users, which account for over 80% of our impressions and revenue, grew 14% and our U.S. and Canada mobile app users grew 5% and accelerated from last quarter,” Ready told analysts on the company’s fourth-quarter earnings call Monday (Feb. 6) afternoon.

More importantly, Ready pointed out, user sessions — or the amount of time spent on the site — continued to grow faster than the full site, which he said demonstrates the kind of deepening user engagement that advertisers want, as well as the monetization that Pinterest is committed to growing.

“Given that users come to our platform with intent to make, do or shop, we are well positioned to achieve this by deepening user engagement, driving more intent to action, and helping advertisers better monetize or supply on deepening user engagement,” Ready, a former Google and PayPal executive, told analysts. “We believe that we have a large opportunity to grow the frequency of engagement from episodic users,” he added.

Gen Zs and Video

Ready said the company, which he took over last June from founder and long-term CEO Ben Silberman, was “laser focused” on four strategic priorities: growing monetization and user engagement, integrating shopping into the core product experience, improving operational rigor and margin expansion, and strengthening Pinterest’s reputation as a positive and brand-safe platform. In addition, Ready said he was particularly excited about the new and emerging demographics that have joined  the platform.

“In Q4, Gen Z was once again our fastest growing cohort, growing double digits and accelerating from Q3,” Ready said. “We’re building an experience that resonates with this audience — specifically around video,” telling analysts that nearly half new videos that were “pinned” in Q4 were from Gen Z users.

Officially, Pinterest’s fourth quarter revenue and its global monthly active user tallies both rose 4% from a year ago, to $877 million and 450 million respectively.

“We believe high-quality and inspiring content will further deepen engagement, especially for Gen Zs.” he said.

A Place to Shop

To be sure, much has happened in the three months since Pinterest last reported earnings, including an announced 5% layoff or about 150 jobs last week, which came just days after the social media platform announced a new video content partnership with Conde Nast, a deal it called a “natural extension” of its existing partnership with the publisher that already has “over 40 different Pinterest profiles and tens of millions of views.” As part of that venture and Pinterest’s shift to boost monetization, the two brands will launch a new Wedding destination in April.

In addition, the company also reported in December that it was expanding its board to make room for activist investor Elliott Management, which is now Pinterest’s largest shareholder and pushing from within to grow faster.

“While our monthly active users grew at a compound annual growth rate of 10%, our growth opportunity should continue to be robust as we improve frequency and visitation,” CFO Todd Morgenfeld told investors, while also announcing that he would be stepping down July 1 after over six years in the role.

Ready said he believes high quality and inspiring content will also deepen engagement, as will new digital tools such as the newly launched “conversion API,” which has since been integrated with Shopify, that enables merchants to use conversion measurement tools; Ready said this tool had been found to boost checkout conversions by an average of 28% lift in the attributed checkout conversions, and 14% improvement in the checkout CPA metrics.