Pinterest Inc Earnings - Q4 2025 Analysis & Highlights
Pinterest reported strong user growth and engagement metrics in Q4 2025, but acknowledged underperformance in revenue growth driven by tariff-related headwinds affecting large retailers. The company is executing a comprehensive go-to-market transformation to broaden its advertiser base, accelerate AI-driven product innovation, and unlock significant monetization opportunities across SMBs, mid-market enterprises, and international markets.
Key Financial Results
Q4 2025 global revenue was $1.319 billion, up 14% year-over-year (13% on constant currency basis).
Global monthly active users (MAUs) reached 619 million, growing 12% year-over-year, representing the 10th consecutive quarter of record high users.
Q4 adjusted EBITDA was $542 million with an adjusted EBITDA margin of 41%, up 20 basis points versus Q4 last year.
Full year 2025 free cash flow increased 33% to $1.25 billion, with free cash flow conversion of 99% compared to 2025 adjusted EBITDA of $1.27 billion.
Ad impressions grew 41% in Q4, while ad pricing declined 19% year-over-year, driven primarily by mix shift from growing ad impressions in under-monetized international markets.
Cost of revenue in Q4 was $221 million, up 15% year-over-year and up 7% versus Q3, due to increased infrastructure spend related to user and engagement growth.
Non-GAAP operating expenses were $562 million, up 13%, driven by headcount investments in sales and marketing and R&D.
Business Segment Results
US and Canada region had 105 million MAUs, growing 4%, with Q4 revenue of $979 million, growing 9%.
Europe region had 158 million MAUs, growing 9%, with Q4 revenue of $245 million, growing 25% on a reported basis (18% on constant currency basis).
Rest of world markets had 356 million MAUs, growing 16%, with Q4 revenue of $96 million, growing 64% on a reported and constant currency basis.
Revenue growth was driven by retail, financial services, and telecom verticals, with conversion objective showing strength.
Managed SMB business doubled its growth rate in 2025 versus 2024, representing approximately 15% of revenue.
Capital Allocation
The company allocated $500 million towards share repurchases in Q4, bringing full year 2025 share repurchases to $927 million for a total of 30 million shares.
Net share settlement of equity awards utilized $399 million of cash in 2025.
Combined share repurchases and equity award settlements drove an approximately 1.6% decline in year-over-year fully diluted share count, comparing favorably to the stated positive 2% to 3% average annual target.
The company ended the year with cash, cash equivalents, and marketable securities of $2.5 billion.
Pinterest agreed to acquire tvScientific, a leading connected TV performance advertising platform, to monetize off-platform supply and expand into connected TV.
Industry Trends and Dynamics
The company operates in a period of rapid innovation with new AI chatbots quickly scaling to hundreds of millions of users.
Pinterest reported over 80 billion monthly searches on its platform, most of which are visual, generating 1.7 billion monthly outbound clicks.
More than half of Pinterest's searches are commercial in nature, compared to approximately 2% for ChatGPT.
The company achieved 10 consecutive quarters of record high MAUs and 105 million UCAN MAUs, with Gen Z representing over 50% of users and remaining the fastest growing user cohort.
Queries, boards created, and clicks to advertisers continue to grow faster than users overall, both globally and in the UCAN region.
Paid clicks to advertisers are up roughly five-fold over the last three years.
Competitive Landscape
Pinterest differentiates itself through visual search, discovery, and shopping, not general-purpose text-based search, positioning itself distinctly from competitors like ChatGPT.
The company has created one of the largest search destinations in the world by pairing AI capabilities with unique feedback loops, one of the largest image corpuses, and the Taste Graph curation signal from hundreds of millions of users.
Pinterest's latest multimodal visual search models outperform leading proprietary off-the-shelf models by 30 full percentage points on the relevancy of shopping recommendations.
The company uses a combination of AI models including proprietary fit-for-purpose foundation models, leading third-party proprietary models, and increasingly open source models fine-tuned on unique signals.
Management noted that while competing for user engagement is not new, Pinterest has thrived by doing something separate and distinct from AI chatbots.
Macroeconomic Environment
The company absorbed an exogenous shock related to tariffs, which are disproportionately affecting ad spend from top retail advertisers.
Many of the largest retailers have been disproportionately impacted by tariffs and have been pulling back on advertising spend across the industry as they seek to protect their margins.
Pinterest's higher mix of large retailers relative to some peers resulted in the company feeling more of an impact from tariff-related headwinds.
A new furniture tariff enacted last October has left the home category challenged overall.
Large global retailers pulled back ad spend in Europe and UCAN as they recalibrated across their global portfolio due to tariff and margin pressure.
Management expects tariff-related headwinds to continue and may become slightly more pronounced in Q1, including in UCAN and Europe.
Growth Opportunities and Strategies
The company is prioritizing broadening its revenue mix with a primary focus on deepening footprint with mid-market enterprises and SMB advertisers, who range from roughly $30 billion down to tens of millions in annual GMV.
Pinterest is advancing Pinterest Performance+ by investing in the next wave of bidding and performance enhancements, with the number of shopping SKUs with paid ad impressions increased roughly five times since end of 2023.
The company launched Pinterest Performance+ ROAS bidding in Q1 2025, which adds more granular bidding functionality and allows advertisers to optimize for conversion value.
Pinterest began piloting integrations with sophisticated advertisers' proprietary in-house measurement systems, with one advertiser increasing its bids on Pinterest by more than 30%.
The company will enable deeper, direct integrations between Pinterest and measurement partners later in 2026 to allow automated, two-way data transfer for continuous training and optimization of bidding models.
Pinterest recently entered beta for Pinterest Performance+ new customer acquisition feature, with initial testing showing new customer conversions increase by an average of 64% in campaigns where the feature was enabled.
The company introduced OmniSage, its core AI model trained on the Taste Graph, which drove a 450 basis point lift in site-wide saves.
Pinterest developed PinFM, a proprietary foundational ranking model that distills lifetime user actions into recommendations, driving a 240 basis point increase in saves across the platform.
The company developed Navigator One, a model framework that leverages visual embeddings and fine-tunes open source models, reducing latency and delivering approximately 90% reduction in cost versus leading third-party proprietary models.
Pinterest Assistant, a voice-activated, visual-first conversational assistant launched in beta in Q4, shows users asking a significantly higher share of commercially oriented questions, about 25 percentage points more compared with traditional text-based search.
Roughly 50% of new code at Pinterest is AI-generated.
The company appointed Lee Brown as Chief Business Officer in late January to lead the next phase of sales and go-to-market transformation.
Claudine Cheever joined as Chief Marketing Officer in February, bringing extensive background with the world's largest online retailer.
The Taste Graph grew by nearly 40% in 2025 as users make more associations across pins, products, boards, retailers, and brands.
Financial Guidance and Outlook
Q1 2026 revenue is expected to be in the range of $951 million to $971 million, representing 11% to 14% growth year-over-year.
Q1 2026 adjusted EBITDA is expected to be in the range of $166 million to $186 million.
Q1 2026 non-GAAP costs of revenue are anticipated to grow sequentially from Q4 2025 by low single-digits percent.
In 2026, the company is making deliberate investments in high ROI areas such as GPU capacity to enable key AI initiatives.
The company expects modest headwinds from cost of revenue as a percentage of revenue in 2026, as it has captured much of the benefit from multiyear infrastructure cost optimization efforts.
In January, the company announced a restructuring expected to generate approximately $100 million of annualized non-GAAP OpEx savings.
The company expects to reinvest roughly half of the OpEx savings, primarily in sales transformation and AI talent.
Full year 2026 adjusted EBITDA margin is expected to be roughly in line with 2025 at approximately 30%.
With the tvScientific acquisition, which is expected to close in Q1 or Q2, the company anticipates a roughly 100 basis point drag to adjusted EBITDA margin in 2026, leading to 29% for 2026 overall on a combined basis.
tvScientific's Q4 2025 revenue would have contributed less than 2 points of growth to Pinterest revenue in Q4 2025.
The company continues to expect adjusted EBITDA margin targets of 30% to 34% over the medium term.
Management expects revenue growth should be higher over time and continues to have conviction in ability to reach long-term targets.
Product and Technology Innovation
The company is continuing to build a differentiated visual search, discovery, and shopping experience as a core priority.
AI is being kept at the core of everything Pinterest does, from highly personalized user experiences and new features like Pinterest Assistant to the advertiser experience through Pinterest Performance+.
Users open Pinterest to a personalized visual feed that starts their shopping journey without having to enter a prompt, bringing the promise of agentic commerce to life.
Users can buy seamlessly by linking to an advertiser's mobile app or site, or increasingly via one-click checkout from the advertiser within the app.
User Safety and Trust
The company has made deliberate choices that put user trust and well-being, especially for young users, at the center of the experience.
Parents and regulators around the world are raising the bar for online safety, particularly for teens and kids, and Pinterest is tuning its AI for positivity and giving users more agency and choice over their experience.
