Pinterest's AI-Powered Personalization Drives 16% Revenue Growth and User Engagement

Pinterest CEO Credits AI-Powered Personalization for 16% Revenue Growth | PYMNTS.com

Pinterest reported strong first-quarter results on Thursday (May 8), with $855 million in revenue and a 10% year-over-year increase in monthly active users to 570 million. According to a Thursday (May 8) press release, revenue increased by 16% year over year. Speaking on an earnings call, CEO Bill Ready attributed the growth to the company's investment in artificial intelligence (AI), noting that the algorithm has been especially successful at attracting Generation Z users. "Our ability to leverage AI to personalize our users' experience is a key differentiator and has enabled us to find our best product market fit in years," Ready said. "The ability for users to explore their interests visually and take action on them is one of our core differentiators and an important reason why users come to our platform in the first place," he added. "This is especially relevant for Gen Z, our largest and fastest growing user cohort, who have been raised on an internet of visual content across images and video and who find utility in the ability to search visually." The CEO also said that the company is "doubling down" in 2025 on visual search capabilities, powered by multimodal AI models. "Leveraging this enhanced multimodal technology, we are unlocking a new level of personalization for our users," Ready said. Pinterest is not alone in its shift toward visual search engines. As PYMNTS reported in December, startup Aesthetic launched into the AI-powered clothing recognition field, adding to the competition of see-now-buy-now fashion AI technology. The field has seen more investment as social media platforms move to add shopping features. Besides Pinterest, Google has partnered with retailers to integrate its Lens technology directly into their apps, PYMNTS wrote at the time. "Aesthetic's technology lets users search with screenshots or photos, analyzing an image to identify specific clothing items and matching them to similar products," PYMNTS reported. "Unlike broader visual search tools, the company says it focuses exclusively on fashion, training its AI to recognize details like necklines, sleeve lengths and fabric patterns." Pinterest announced earlier this week that it was expanding its visual search features to the U.S., the U.K. and Canada, enabling users to search for personalized women's fashion content. "The new tools let users find what they're searching for without using words, by breaking down and decoding images so users can quickly search and shop for the details of an outfit they like," according to a PYMNTS report.

Pinterest's revenue forecast gets boost from AI ad tools, growing marketing spend

(Reuters) -Pinterest forecast current-quarter revenue above Wall Street estimates on Thursday, signaling its artificial intelligence tools are boosting advertising spend on the platform and sending its shares up 16% in extended trading. Despite uncertainty over marketing budgets, the company's emphasis on direct response ads -- designed to prompt specific actions like shopping, app downloads or website visits -- continues to drive ad spend. Pinterest's results came after the termination of a duty-free import loophole in the U.S., which, combined with deepening trade tensions, has constrained ad budgets for some social media platforms. Finance chief Julia Donnelly said on the post-earnings call that Pinterest is "not immune to the macro environment," but added that the company is confident in its "multiple revenue initiatives." "We have observed a reduction in spend from Asia-based e-commerce retailers in the U.S., given the change in the de minimis exemption; however, we have also seen a geographic diversification from some of those Asia-based retailers to our European and rest-of-world user regions," Donnelly added. Rivals Facebook-parent Meta and Reddit topped revenue expectations in the first quarter. In contrast, Snap said that it would not issue a quarterly forecast due to economic uncertainty. Pinterest is becoming increasingly attractive to advertisers due to its largest and fastest growing user cohort, Gen Z, along with its "Performance+" automation and AI tools for creating personalized ad campaigns. CEO Bill Ready also announced a third-party ad deal with Magnite to help the company "aggregate smaller sources" of advertising demand. The company already has such deals with Google and Amazon.com. Pinterest's global monthly active users rose 10% to 570 million in the first quarter, exceeding analysts' average estimate of 564 million, according to data compiled by LSEG. The quarterly results show the company "can sustain momentum without the holiday tailwind," eMarketer senior director Jeremy Goldman said. Pinterest forecast second-quarter revenue of $960 million to $980 million, above estimates of $966.3 million. Revenue of $855 million for the first quarter beat estimates of $846.6 million. But adjusted earnings per share of 23 cents missed estimates of 26 cents. (Reporting by Jaspreet Singh in Bengaluru; Editing by Alan Barona)