Pinterest reported 8% growth in monthly active users (MAUs), reaching 465 million. Although this growth rate was similar to the previous quarter, the company noted that users were spending more time on the platform, thanks in part to improved post and ad recommendations made possible by artificial intelligence (AI).
During the last quarter, ending June 30, Pinterest’s revenue increased by 6% to $708 million, meeting the company’s projections from the previous quarter. For the third quarter, the company anticipates revenue to grow in the high single digits compared to the previous year.
“In Q2, we continued to build momentum with consumers and advertisers while further accelerating our pace of innovation,” Pinterest CEO Bill Ready said in a statement. “Over the past year, we’ve been laser-focused on our key differentiators, and we’re seeing results.”
However, this news led to a decrease of about 4% in Pinterest’s shares during after-hours trading.
In contrast, Meta Platforms achieved double-digit percentage growth, and it anticipates further sales acceleration later this year.
Pinterest also shared progress on its endeavors to become a more prominent eCommerce destination. Click rates and saves on posts linked to shoppable items grew 50%, outpacing the first quarter’s growth rate.
After a year in his position, Ready is pushing to increase the time users spend on Pinterest.
“Shopping is working on Pinterest, and we’ve had some great partnerships that are aiding with that,” Ready said in an interview Tuesday. “There’ll be more of those to go.”
Whether people would shop on Pinterest “was a big question a year ago,” Ready said during the call with analysts. “We have answered that question definitively.”
In late April, in an effort to create more shoppable content, Pinterest inked a multiyear deal with Amazon Ads to enhance the platform’s offering of relevant products and brands. This marked Amazon’s status as Pinterest’s first third-party advertising partner.
The decision came in response to the growing prominence of video-based platforms such as TikTok and Reels, prompting Pinterest to revamp its image pinboard. Consequently, the platform introduced Idea Pins, which prioritizes video content and places a stronger focus on user-generated content.
Additionally, the move falls in line with PYMNTS research conducted at the end of the previous year, which foresaw that online sellers would prioritize social media channels in 2023. The research revealed that about 47.9% of online sellers planned to increase their reliance on platforms like Instagram and TikTok for sales and marketing.
This move is in line with Pinterest’s longstanding efforts to connect product inspiration with purchases. The recently forged alliance with Amazon has the potential to create a more streamlined buying process for consumers. With the integration of Amazon’s platform, shoppers can expect a smoother experience, eliminating the need to fill out forms, since the company securely stores their payment information. As a result, checkouts are likely to be much faster compared to other eCommerce websites.
Additionally, Pinterest revealed ongoing tests of AI-powered product recommendations in certain categories, leading to an increase in the number of shoppers making purchases based on items they saw on the platform.
“Over 50% [of users] say they view Pinterest as a place to shop,” Ready said during a Q4 2022 earnings call. “Yet we haven’t made it easy for them to shop historically, as shoppable content was not integrated into core experiences.”
Through the integration of AI and shoppable media features, Pinterest aims to transform into a virtual “digital bazaar,” providing users with inspiration, brand exploration, and seamless in-app purchasing, eliminating the need to navigate elsewhere for their shopping.
Similar to Meta and Snapchat, Pinterest has been exploring the integration of AI into its platform. However, Ready emphasizes that the company is approaching this implementation with careful consideration.
“We’re making sure that it’s additive to people’s lives, not addictive, which I think has been one of the criticisms of some of what has happened with AI and social media over the last many years is that in a lot of ways it was becoming more and more addictive — connecting you to things that make you engage for longer but may not make you feel better after you engage with it,” he told Yahoo Finance.
Ready highlighted the significance of customer data in harnessing the full potential of AI. The platform has the capability to leverage the vast amount of user interactions, amounting to “billions of interactions,” to enhance AI capabilities and provide consumers with more relevant content and connections.
“We’re connecting users to the full-funnel experience where they can go from inspiration to consideration to action in the same place,” Ready said.