💰 Market Cap: $17.9B | 🏢 5.8K Employees | 🌍 Global Platform

👨‍💼 CEO Bill Ready | 🎯 AI Shopping Assistant | 🇺🇸 San Francisco, CA

$26.32

📉 -$6.59 (-20.0%) After Earnings

-1% YTD | Post Q3 2025 Results

🚀 Needs:

International ARPU doubles from current $0.43 to $0.86 by Q4 2026 as Europe and Rest of World adopt monetization features • AI-powered shopping assistant drives 30%+ increase in conversion rates and advertiser ROI • US/Canada ARPU rebounds to $8.50+ as tariff pressures ease and large retailers resume ad spending • Gen Z users (50%+ of base) mature into higher-spending demographics with increasing purchasing power • Visual search queries exceed 100% YoY growth as AI recommendations become industry-leading

⚖️ Needs:

Revenue growth maintains 15-17% annual pace as international markets gradually monetize • US/Canada revenue stabilizes with mid-single-digit growth as retail advertising normalizes • EBITDA margin expands toward 32% target through operational leverage and AI infrastructure efficiency • User growth continues at 10-12% annually driven by Gen Z adoption in emerging markets • Ad pricing stabilizes as international mix matures and higher-value formats gain adoption

⚠️ Risk:

Instagram and TikTok aggressively copy visual search and shopping features with larger user bases • International monetization fails to accelerate and ARPU remains below $0.50 for 2+ years • US/Canada advertising spend contracts further as economic uncertainty and tariff pressures persist • Gen Z users shift engagement to AI chatbots and alternative platforms for shopping discovery • Ad pricing continues declining 20%+ annually as low-value international impressions dominate growth mix

💰

What Happened

Revenue: $1.05B (+17% YoY, +16% constant currency), met estimates but EPS of $0.38 missed $0.42 consensus by 9.5%

Users: Record 600M MAUs (+12% YoY), ninth consecutive quarter of growth - UCAN 103M (+4%), Europe 150M (+8%), ROW 347M (+16%)

Profitability: EBITDA $306M at 29% margin (+170 bps YoY), operating margin turned positive at 5.6% vs -0.7% last year, FCF $318M

Geography: UCAN $786M (+9%), Europe $193M (+41%, +34% constant currency), ROW $70M (+66%, +65% constant currency)

Guidance: Q4 $1.313-1.338B (14-16% growth) came in below $1.34B consensus, EBITDA $533-558M expected

📈

Why It Matters

Growth Paradox: Strong 17% revenue growth despite large US retailers pulling back spend due to "tariff-related margin pressures" - shows resilience but guidance signals continued pressure

Monetization Challenge: Ad impressions +54% but ad pricing -24% reveals core tension - international users are 83% of base but only 25% of revenue (17.7x ARPU gap vs UCAN)

Search Momentum: 80B monthly queries on platform with visual search queries +44% YoY - CEO Bill Ready positioning Pinterest as unique "visual-first" alternative to traditional search and AI chatbots

AI Differentiation: Proprietary multimodal model is 30% more effective than off-the-shelf models at recommending relevant content - plus orders of magnitude cost reduction using fine-tuned open-source models

Performance Ads Traction: Clicks to advertisers +40% in Q3 (5x over 3 years), breaking into 5-10% share of spend with world's largest advertisers, but still early vs Meta/Google capabilities

🎯

What's Next

Q4 Outlook: $1.313-1.338B revenue (14-16% growth) with $533-558M EBITDA - new tariff on home furnishings category adding pressure on top of existing retail headwinds

Performance Plus Expansion: Retail advertisers using P+ seeing 24% higher conversion lift, SMB/mid-market adopters growing revenue 12% faster - this segment only 15% of revenue today with significant upside

ROAS Bidding Scale: 22% of lower-funnel retail revenue now through ROAS bidding (launched just 2 quarters ago), doubled shopping SKUs with paid impressions - getting deeper into large retailer catalogs

International Playbook: Shopping ads grew from 9% of international revenue (Sept 2023) to 30% today (Q3 2025) - Europe ARPU +31%, ROW ARPU +44% as monetization strategies export from UCAN

AI Roadmap: Pinterest Assistant beta launching with voice-activated conversational search, Boards Made for You with AI curation, Holiday Edit with expert gift guides - all designed to deepen engagement

💡

Bottom Line for Retail Investors

Pinterest posted solid fundamentals - 17% revenue growth, 600M users (9th straight record quarter), 29% EBITDA margins - but got crushed 20% on Q4 guidance coming in 1% light. Now at $26.32 (9.6x forward P/E, $17.9B market cap), the question is whether this selloff created opportunity or revealed deeper problems. The bull case: legitimate AI shopping platform with 80B monthly queries, visual search +44%, proprietary models outperforming alternatives by 30%, and international revenue exploding (+41% Europe, +66% ROW). The bear case: US retailers cutting tariff-squeezed budgets, international ARPU stuck at $0.43 vs $7.63 domestically (17.7x gap), management admits "many years behind" Meta/Google on performance ads, Instagram/TikTok copying features with bigger scale. The wildcard is timing - clicks to advertisers up 5x in 3 years shows real progress, but monetization of that engagement remains inconsistent. Risk/reward math: 82% upside to $48 bull, 33% to $35 base, 24% downside to $20 bear. This is a "show me" story where fundamentals are strong but guidance disappoints - whether that's a buying opportunity or a warning signal depends on your conviction in the 12-18 month AI monetization thesis and tolerance for continued volatility.

🤖

AI Shopping Moat Building

Visual Search Dominance: 80B monthly queries on platform with 44% YoY growth in latest visual search features - related items and visual search drive "vast majority" of query behavior

Pinterest Assistant Launch: Voice-activated conversational AI that transforms "open-ended, complex questions" into shoppable visual results using proprietary multimodal model trained on Pinterest's unique dataset

Proprietary Model Edge: In-house multimodal model is 30% more effective at identifying relevant content vs leading off-the-shelf models, fine-tuned with first-party signals from billions of curation actions

Cost Advantage: Open-source models delivering "orders of magnitude reduction in cost with comparable performance" vs proprietary LLMs - critical for margin expansion while scaling AI features

👥

Demographic Gold Mine

Gen Z Dominance: Over 50% of 600M users are Gen Z (largest, fastest-growing cohort), UCAN MAUs at 103M (highest in 4.5 years), 100% of users are logged in providing first-party signals

Direct Traffic Moat: Nearly 85% of users come directly to mobile app (not via search engines/third parties) - demonstrates destination status and reduces platform risk vs social media

Board Curation Power: Hundreds of millions actively save to 15B boards organizing every aspect of their lives - "intent signal found nowhere else in the Western world" per CEO

Engagement Deepening: Queries per user growing YoY, board creation accelerating, users who create boards are more likely to revisit, less likely to churn, have deeper sessions - sticky behavior

🌍

International Monetization Runway

Massive Imbalance: 500M international users (83% of base) generated only 25% of Q3 revenue due to historical UCAN monetization focus - multi-year opportunity to close gap

ARPU Acceleration: Europe ARPU +31% YoY, ROW ARPU +44% YoY as playbook scales - but still at $0.43 internationally vs $7.63 UCAN (17.7x difference to narrow)

Shopping Ads Explosion: Shopping ads grew from 9% of international revenue at Sept 2023 Investor Day to 30% in Q3 2025 - grew 2x faster than overall regional revenue

Hybrid Go-To-Market: Direct sales in Europe with agency partnerships, reseller partners in 40+ countries for ROW, plus third-party ad demand for long-tail markets previously unmonetized

📊

Operating Leverage Inflection

Margin Trajectory: EBITDA margin 29% in Q3 (+170 bps YoY), approaching 30% for full year 2025, targeting 30-34% over 3-5 years from Sept 2023 Investor Day - on track

Cash Generation: $318M free cash flow in Q3 with over 90% of EBITDA converting to FCF over trailing 12 months, $2.7B cash/equivalents on balance sheet, zero debt concerns

Infrastructure Efficiency: Cost of revenue +13% YoY but will grow "more in line with business" going forward as 2+ years of optimization work shows diminishing returns - partially offset by AI monetizing immediately

Capital Allocation: $199M share repurchases + $115M net share settlements in Q3 keeping diluted share count flat YoY - disciplined approach to returning capital while funding growth

📉

Decelerating Growth Trajectory

Sequential Deceleration: Q4 guidance of 14-16% growth (midpoint $1.326B) represents 1 point lower range than Q3 due to "broader trends and market uncertainty" plus new home furnishings tariff

Ad Pricing Pressure: Pricing declined 24% YoY in Q3 (impressions +54%) as low-value international mix grows faster than monetization - structural headwind until ARPU gap closes

UCAN Headwinds: Core US/Canada growing only 9% with "pockets of moderating ad spend" as large retailers navigate tariff-related margin pressure - most profitable segment under stress

Asia E-Commerce Volatility: Spend from Asia-based e-commerce players (Temu/Shein) down YoY again in Q3 though partially recovered from Q2 - unpredictable demand source

⚔️

Instagram/TikTok Existential Threat

Feature Replication Risk: Instagram Collections and TikTok Shop copy visual discovery/shopping with 10x+ user bases - CEO admits Pinterest "still a long way" from capabilities of largest platforms

Market Share Battle: Financial services category is $40B digital ad market in US where Pinterest has "less than half a point of market share" - demonstrates limited penetration vs incumbents

Performance Ads Gap: Management acknowledges "larger platforms are many years into their AI-driven ad systems" while Pinterest is "only a couple of years" in - playing catch-up on core monetization

Scale Disadvantage: Fighting for same retail advertiser budgets against Meta ($134B revenue) and Amazon ($55B ads) who have superior targeting, measurement, and attribution capabilities at massive scale

💸

International Monetization Mirage

ARPU Gap Reality: International ARPU at $0.43 vs UCAN at $7.63 represents 17.7x difference - even strong 31-44% YoY ARPU growth means years/decades to close this structural gap

Advertiser Economics: Management celebrating shopping ads reaching 30% of international revenue (up from 9% two years ago) but absolute dollar contribution remains minimal given low base

Infrastructure Investment: Building direct sales teams in Europe, reseller networks in 40+ ROW countries, plus localized ad formats requires significant upfront spend before payback materializes

Competitive Timing: Meta and Snap have decade+ head start monetizing international markets with established advertiser relationships - Pinterest entering as third/fourth option with limited differentiation

🏪

Retail Advertising Dependency

Tariff Vulnerability: Management explicitly cited "tariff-related margin pressure" causing large US retailers to pull back spend industry-wide, with NEW Q4 tariff on home furnishings adding incremental pressure

Retailer Concentration: Shopping focus means disproportionate exposure to large retailers vs other platforms - "some of our largest retailers pulled back spend across the industry" per CEO

Cyclical Exposure: Heavy reliance on discretionary retail (fashion, home décor) that gets cut first in uncertain economic environment - less diversified than Meta/Google across verticals

Emerging Vertical Penetration: Financial services, travel, entertainment, telecom growing nicely but collectively still small - CEO noted financial services is $40B market where Pinterest has <0.5% share