We’re firmly in the midst of earnings season at the moment and in the last two days, three of the biggest digital ad players have all reported their earnings for the quarter ended 30 June: Pinterest, Meta and Microsoft.
However, while revenues at all three companies climbed, the stock market had a mixed reaction to the earnings reports.
“We had another impressive quarter, reporting a 21 per cent increase in revenue and 12 per cent growth in monthly active users,” said Bill Ready, Pinterest’s CEO.
In the rest of the world — where the Australian team’s performance is counted — revenue grew by 32 per cent from $US29 million ($AU44 million) to $US38 million ($AU58 million).
Its advertising revenue per user, however, was slightly more muted. Globally, Pinterest recorded an eight per cent bump from $US1.53 ($AU2.34) to $US1.64 ($AU2.50). In the rest of the world, it climbed 13 per cent from $US0.12 ($AU0.18) to $US0.13 ($AU0.20).
“Our monetization efforts are paying off. Advertisers are seeing improved performance across key objectives on Pinterest – from brand awareness to conversion – as we continue to roll out AI-powered products and experiences. As a result, we’re gaining share of advertising budgets with some of the world’s largest brands. I’m proud of our pace of innovation as we execute against the opportunity ahead,” added Ready.
Pinterest said that it had 522 million global monthly active users (MAU) for the second quarter, topping analyst estimates of 520.1 million. Of those users, the US and Canada had 98 million, Europe had 136 million and the rest of the world totaled 288 million.
Analysts were expecting its guidance for the coming quarter to be slightly stronger, however, which saw the shares fall by 15 per cent.
Pinterest’s advertising product is becoming markedly more serious and its commitment to its own place in the digital ad marketplace is proving the correct strategy.
“What’s important to us is knowing our users and staying true to who we are as a platform and investing in what makes us different. In the past, we didn’t always invest in what makes us different,” the company’s chief revenue officer, Bill Watkins, told B&T during Cannes Lions.
“Since we’ve recommitted to that in the middle of 2022, it’s had a marked improvement in our business on the core product side, the user growth and engagement side and on the outside. It’s a trend, really owning who you are, celebrating who you are and it just so happens that we’re really proud of who we are and that we’re known as this positive corner of the internet.”
Meta
Meta’s overall revenue climbed by 22 per cent year-on-year to nearly $US40 billion (nearly $AU60 billion). Ad impressions across Meta’s apps increased 10 per cent year-on-year and the average price per ad on its platforms also climbed 10 per cent.
Meta’s pure advertising revenue, increased by nearly 22 per cent year-on-year for the quarter — it still accounts for the vast majority of the company’s earnings. Comparing the first half of this year to last year, ad revenues climbed by 24 per cent.
“We had a strong quarter, and Meta AI is on track to be the most used AI assistant in the world by the end of the year,” said Mark Zuckerberg, Meta founder and CEO. “We’ve released the first frontier-level open source AI model, we continue to see good traction with our Ray-Ban Meta AI glasses, and we’re driving good growth across our apps.”
As a result of the earnings, which beat analyst expectations, Meta’s shares jumped by seven per cent.
Microsoft
Microsoft’s revenue climbed by 15 per cent year-on-year $US64.7 billion ($AU98.80 billion). Its search and news advertising revenue excluding traffic acquisition costs increased 19 per cent year-on-year.
Windows revenue increased seven per cent with Windows OEM revenue growth of four per cent and Windows Commercial products and cloud services revenue growth of 11 per cent. Devices revenue decreased 11 per cent and Xbox content and services revenue increased 61% per cent driven by 58 points of net impact from the Activision acquisition.
“Our strong performance this fiscal year speaks both to our innovation and to the trust customers continue to place in Microsoft,” said Satya Nadella, chairman and chief executive officer of Microsoft.
“As a platform company, we are focused on meeting the mission-critical needs of our customers across our at-scale platforms today, while also ensuring we lead the AI era.”
