Pinterest Inc Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
Pinterest's Q3 2025 earnings call highlighted strong user growth, driven by AI-powered shopping experiences and visual search capabilities. The company reported revenue growth, particularly in international markets, and discussed strategies for expanding its performance ads platform and leveraging AI for enhanced user engagement and advertising efficiency.
Key Financial Results
Q3 2025 revenue grew 17% year-over-year to $1.049 billion.
Adjusted EBITDA was $306 million, with a margin of 29%.
Free cash flow for Q3 was $318 million.
Ended the quarter with $2.7 billion in cash, cash equivalents, and marketable securities.
Ad impressions grew 54%, while ad pricing declined 24% year-over-year.
Business Segment Results
US and Canada (UCAN) revenue was $786 million, up 9%.
Europe revenue was $193 million, up 41% on a reported basis (34% on a constant currency basis).
Rest of World revenue was $70 million, up 66% on a reported basis (65% on a constant currency basis).
Capital Allocation
$199 million allocated towards share repurchases in Q3.
$115 million allocated toward net share settlement of equity awards, keeping the fully diluted share count roughly flat year-over-year.
Priorities include product and technology innovation, balance sheet optimization, opportunistic M&A, and dilution management.
Industry Trends and Dynamics
The digital ad environment is evolving, with advertisers increasingly adopting AI-driven platforms and aligning bidding with measurement sources of truth.
Gen AI-created content is seen as a tailwind for the platform.
There's an expansionary moment happening with search generally.
Competitive Landscape
Pinterest distinguishes itself as a destination, with nearly 85% of users coming directly to the mobile app.
The company is focused on visual search and AI-driven recommendations to differentiate itself.
Pinterest's AI models are trained on billions of first-party signals, creating a unique taste graph.
Macroeconomic Environment
Larger US retailers are navigating tariff-related margin pressure, impacting ad spend.
A new tariff in Q4 is expected to impact the home furnishings category.
Growth Opportunities and Strategies
AI is at the heart of the Pinterest experience, proactively anticipating user preferences.
Expanding multimodal search and bringing AI to the foreground with the Pinterest Assistant.
Introducing new trends and brands to UCAN users with a new feature called Boards made for you.
Launching the Holiday Edit, consisting of expert-curated gift guides.
New ad formats like Top of Search ads and partnerships with Instacart to enhance shopping experiences.
Driving adoption of Pinterest Performance+ to simplify campaign creation and improve outcomes for advertisers.
Focusing on international monetization by exporting proven playbooks and integrating with local advertising ecosystems.
Financial Guidance and Outlook
Expects Q4 2025 revenue to be in the range of $1.313 billion to $1.338 billion, representing 14% to 16% growth year-over-year.
Q4 guidance assumes approximately 1 point of tailwind from the impact of foreign exchange.
Expects Q4 2025 adjusted EBITDA to be in the range of $533 million to $558 million.
Anticipates Q4 2025 non-GAAP cost of revenue to grow sequentially from Q3 2025 by high single digits percent.
Adjusted EBITDA margin expansion is expected in the second half of 2025, though lower than the first half.
