Pinterest's homepage displayed on a computer monitor. Key Points As consumers tighten their belts due to inflation and broader economic concerns, investors are impressed with companies that still posted boosted sales.  Firms like Pinterest, Spotify, and Snowflake all reported significant revenue gains earlier in the year, as well as high rates of customer engagement. Valuation may be a concern for companies like Spotify and Snowflake, both of which have rallied already in 2025. Interested in Pinterest ...

Core Viewpoint - Pinterest's stock has faced significant declines following a disappointing earnings report, primarily due to lower-than-expected revenue guidance for the crucial holiday quarter [1][4]. Financial Performance - Pinterest reported third-quarter revenue of $1.05 billion, reflecting a 17% year-over-year increase, driven by a 12% rise in monthly active users, reaching 600 million [2]. - The company achieved a GAAP net income of $92 million and adjusted EBITDA of $306 million, with free cash flow amounting to $318 million, indicating improved profitability in a challenging digital advertising landscape [3]. Guidance and Market Reaction - For the fourth quarter, management provided revenue guidance of $1.313 billion to $1.338 billion, suggesting a growth rate of 14% to 16%, which fell short of market expectations [4]. - The market's reaction to the earnings report highlights concerns over Pinterest's ability to compete with larger social media and technology companies, which demand rapid growth from the company [7]. Competitive Landscape - The competitive environment is intensifying, with major online marketplaces posing a direct threat to Pinterest's business model, particularly in the online product discovery space [10]. - The CFO noted a decline in advertising spending in the U.S. and Canada, attributed to larger retailers facing margin pressures, although there was some growth in international markets [9]. Future Outlook - The company is exploring advancements in artificial intelligence to enhance user experience and maintain competitiveness, which could potentially shift market perceptions if successful [12]. - Despite a forward price-to-earnings multiple of 15, the stock is viewed as not cheap enough given the uncertainties surrounding its competitive position [14].

Core Insights - Pinterest Inc. reported mixed third-quarter results, with revenue of $1.0 billion, a 16.8% year-over-year increase, but earnings fell short of consensus estimates, indicating challenges in the advertising landscape [1] - Adjusted EBITDA reached $306 million with a 29.2% margin, surpassing consensus by 4% and representing a 170-basis-point margin expansion [2] Revenue Outlook - For the fourth quarter, Pinterest projects revenue growth of 13.8% to 15.9% year-over-year, estimating revenue between $1.31 billion and $1.34 billion, with the midpoint trailing Street expectations by approximately 100 basis points [3] - The company anticipates Adjusted EBITDA to range between $533 million and $558 million, compared to a prior estimate of $546 million [3] Analyst Revisions - Following the cautious revenue outlook, Wedbush Securities analysts lowered their 12-month price forecast on Pinterest to $34 from $44 while maintaining an Outperform rating, citing moderating ad spend among large U.S. retailers affected by tariff pressures [4] - Wedbush trimmed its growth forecasts, projecting a three-year revenue Compound Annual Growth Rate (CAGR) of 14.5%, down from 15.1%, but noted that Pinterest remains positioned to meet its intermediate-term targets [6] Long-Term Concerns - Rosenblatt analyst Barton Crockett expressed concerns about long-term structural risks due to the rapid advancement of AI technologies, which could overlap with Pinterest's core use case, leading to potential existential challenges [9] - The firm downgraded Pinterest to Neutral and cut its price forecast by $19 to $30, based on a 12x 2026E EV/EBITDA multiple [9] Market Dynamics - Analysts highlighted rising risks from AI-driven competitors, which may offset easing year-over-year comparisons in consumer packaged goods, with concerns that sustaining growth could become difficult if AI-powered chatbots evolve into alternative platforms for discovery and engagement [10] - Pinterest's core U.S. and Canada market, accounting for about 75% of sales, is pressured by new tariffs and weaker retail ad spending, although stronger gains in Europe and other regions provide some offset [11]

Core Insights - Pinterest shares dropped 20% following disappointing third-quarter earnings, with advertising revenue impacted by larger retailers facing tariff challenges [1] - The company reported adjusted earnings of 38 cents per share, below the expected 42 cents, while revenue met estimates at $1.05 billion [1] Financial Performance - Third-quarter sales in the U.S. and Canada were $786 million, falling short of StreetAccount's estimate of $799 million [2] - The finance chief indicated that there were "pockets of moderating ad spend" due to pressure on margins from tariffs affecting larger U.S. retailers [3] Market Dynamics - Analysts noted that tariff-related weaknesses are emerging in the digital advertising space, highlighting Pinterest's lack of customer diversity and increased macro sensitivity [2] - Several banks have lowered their price targets for Pinterest, citing rising competition from platforms like Instagram and TikTok, as well as macroeconomic headwinds [4] - Despite concerns, 81% of analysts still maintain an outperform or buy rating for the company [4]

Core Insights - Pinterest's third-quarter earnings missed expectations, with adjusted earnings per share at 38 cents compared to the projected 42 cents, while revenue increased 17% to $1.05 billion, aligning with estimates [2][3] - Monthly active users grew 12% year-over-year to 600 million, surpassing the expected 590.3 million [2] - The company faces challenges due to tariffs affecting advertising spending, particularly from large retailers in the U.S. and Canada [4][5] Financial Performance - Adjusted EPS for the quarter was 38 cents, below the expected 42 cents [2] - Revenue for the quarter was $1.05 billion, a 17% increase year-over-year, meeting expectations [2] - Guidance for the current quarter is $1.33 billion, slightly below the anticipated $1.34 billion [3] User Growth and Market Position - Monthly active users increased to 600 million, a 12% rise year-over-year, exceeding estimates [2] - Pinterest is focusing on enhancing its competitive edge against platforms like Facebook and Instagram by improving performance-based advertising [7] Strategic Initiatives - The company is investing in AI and product innovation, positioning itself as a leader in visual search and an AI-powered shopping assistant [3][9] - Partnerships with Amazon and Alphabet aim to enhance advertising capabilities and monetization potential [7][8] Market Reaction - Following the earnings report, Pinterest's stock fell over 21% to $25.97, erasing year-to-date gains and dropping below its 200-day moving average [11] - Analysts have mixed views, with some maintaining a neutral stance while others see potential in the company's valuation and future growth [6][10]

Core Viewpoint - Pinterest's stock dropped over 18% pre-market, closing at $26.94, following its third-quarter earnings report which showed mixed results [1] Financial Performance - Pinterest reported a 17% year-over-year revenue increase to $1.05 billion, meeting market expectations [1] - Adjusted earnings per share were $0.38, falling short of the anticipated $0.42 [1] Regional Performance - The North American market experienced a slowdown in advertising spending, generating $786 million in revenue, slightly below the market expectation of $799 million [1] Future Outlook - For the fourth quarter, Pinterest expects revenue to be between $1.31 billion and $1.34 billion, and adjusted EBITDA to range from $533 million to $558 million, both below market expectations of $1.34 billion and $554 million respectively [1]

Financial Data and Key Metrics Changes - Q3 2025 revenue reached $1.049 billion, growing 17% year-over-year, with a 16% increase on a constant currency basis [31][32] - Adjusted EBITDA for Q3 was $306 million, representing a margin of 29%, with a 170 basis point expansion year-over-year [34][35] - Free cash flow for Q3 was $318 million, indicating a strong cash-generative nature of the business [35] Business Line Data and Key Metrics Changes - Monthly active users (MAUs) reached 600 million, marking a 12% growth year-over-year, with significant strength in Gen Z users [5][30] - Revenue from the US and Canada was $786 million, growing 9%, while Europe saw revenue of $193 million, growing 41% [31] - Revenue from the rest of the world was $70 million, growing 66% year-over-year [31] Market Data and Key Metrics Changes - The US and Canada region had 103 million MAUs, growing 4%, while Europe had 150 million MAUs, growing 8% [30] - The rest of the world markets had 347 million MAUs, growing 16% [30] - Ad impressions grew 54% year-over-year, while ad pricing declined 24% due to a shift towards lower-priced international markets [32][33] Company Strategy and Development Direction - The company is transforming into an AI-powered visual-first shopping assistant, enhancing user engagement and advertiser partnerships [4][9] - There is a focus on expanding monetization in international markets, which currently represent only 25% of global revenue despite having 83% of global users [24][28] - The introduction of Pinterest Assistant aims to enhance user experience through voice-activated searches and personalized recommendations [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid- to high-teens revenue growth targets over the medium and long term, despite challenges in the UCAN region [52][55] - The company is optimistic about the potential of AI-driven optimization and the adoption of Performance Plus campaigns among smaller and mid-market advertisers [60][62] - Management noted that the digital ad environment remains challenging, particularly for larger retailers navigating tariff-related margin pressures [59] Other Important Information - The company allocated $199 million towards share repurchases and $115 million for net share settlement of equity awards to mitigate dilution [36] - The Q4 revenue guidance is projected to be between $1,313 million and $1,338 million, representing a 14%-16% growth year-over-year [36][37] Q&A Session Summary Question: Future of e-commerce and Pinterest's strategy - Management highlighted the proactive nature of Pinterest's AI, which anticipates user preferences without explicit prompts, enhancing user engagement and shopping experiences [45][48] Question: Impact of tariffs on ad spend - Management confirmed that while there was a pullback in ad spend from some US retailers, there was a partial recovery in spending from Asia-based e-commerce players [51][52] Question: Digital ad environment and UCAN performance - Management noted consistent revenue growth despite challenges in the UCAN region, emphasizing the importance of AI-driven platforms for future optimization [59][60] Question: AI-generated content strategy - Management clarified that while they embrace AI-generated content, they prioritize content quality and user choice, allowing users to filter AI content [66][70] Question: Relationship with Magnite and new demand sources - Management stated that first-party ad demand remains the primary growth driver, with ongoing efforts to integrate third-party demand sources [73][74] Question: SMB and mid-market opportunities - Management expressed confidence in the Performance Plus campaigns, noting higher conversion rates and revenue growth among smaller and mid-market advertisers [78][79]

Financial Data and Key Metrics Changes - In Q3 2025, Pinterest reported revenue of $1.049 billion, representing a 17% year-over-year growth [6][30] - Adjusted EBITDA for Q3 was $306 million, with a margin of 29%, reflecting a 170 basis point expansion compared to the previous year [33] - Free cash flow for Q3 was $318 million, indicating a strong cash-generative nature of the business [33] Business Line Data and Key Metrics Changes - Outbound clicks to advertisers increased by 40% year-over-year in Q3, demonstrating enhanced engagement with advertisers [8] - The number of unique shopping SKUs with paid ad impressions grew over 100% year-over-year, driven by the adoption of ROAS bidding [23][52] - Pinterest Performance Plus campaigns have shown a 24% higher conversion lift compared to traditional campaigns, particularly benefiting smaller and mid-market advertisers [63] Market Data and Key Metrics Changes - Monthly active users (MAUs) reached 600 million, growing 12% year-over-year, with significant growth in the U.S. and Canada, Europe, and the rest of the world [5][29] - Revenue from the U.S. and Canada was $786 million, growing 9%, while Europe saw a 41% increase to $193 million, and the rest of the world grew 66% to $70 million [30] - International markets represented 25% of global revenue, indicating significant growth potential in these regions [25] Company Strategy and Development Direction - Pinterest is transforming into an AI-powered visual-first shopping assistant, enhancing user engagement and advertiser partnerships [4][10] - The company is focusing on expanding its share of wallet with mid-market and smaller advertisers while also increasing monetization in international markets [9][28] - New features like Pinterest Assistant and multimodal search are being developed to enhance user experience and drive engagement [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid- to high-teens revenue growth targets over the medium to long term, despite some ad spend moderation in the U.S. [46][49] - The company is optimistic about the potential of AI-driven optimization and the ongoing rollout of Performance Plus solutions [52][53] - Management noted that the digital ad environment remains challenging, particularly for larger retailers, but sees opportunities in emerging verticals and smaller advertisers [49][51] Other Important Information - Pinterest's international monetization is still in early stages, with significant room for growth as the company scales proven strategies from the U.S. [25][28] - The company is actively investing in AI and product innovation to enhance user experience and drive advertiser performance [33][36] Q&A Session All Questions and Answers Question: Future of e-commerce and Pinterest's strategy - Management highlighted Pinterest's proactive AI-driven approach, which anticipates user preferences and enhances engagement, positioning the platform uniquely in the e-commerce landscape [39][40] Question: Digital ad environment and UCAN performance - Management noted that despite a challenging ad environment, Pinterest achieved 17% revenue growth, driven by strong performance in emerging verticals and smaller advertisers [49][50] Question: Relationship with Magnite and new demand sources - Management clarified that first-party ad demand remains the primary growth driver, with ongoing efforts to integrate third-party demand sources [60][61] Question: SMB and mid-market opportunity - Management emphasized the significant potential in the SMB and mid-market segments, with Performance Plus campaigns driving higher conversion rates and revenue growth [63]

Core Viewpoint - Pinterest's stock price declined despite strong second-quarter results and positive guidance, indicating a potential buying opportunity for investors [1][12] Group 1: Financial Performance - Pinterest reported a 17% year-over-year increase in overall revenue, reaching $988 million, surpassing the $975 million consensus estimate [8] - Adjusted EBITDA rose by 25% year over year to $251 million, while adjusted earnings per share (EPS) increased by 38% to $0.33, although it fell short of the $0.35 expected by analysts [9] - The company forecasts third-quarter revenue between $1.033 billion and $1.053 billion, representing a year-over-year growth of 15% to 17%, exceeding the $1.025 billion analyst consensus [10] Group 2: User Growth and Engagement - Monthly active users (MAUs) increased by 11% to 578 million, with significant growth in international markets, particularly a 14% rise in "rest of world" users [5] - Average revenue per user (ARPU) climbed by 6% year over year to $1.74, with notable regional differences: U.S. and Canada ARPU rose to $7.29, European ARPU surged by 26% to $1.30, and "rest of world" ARPU soared 44% to $0.19 [6] Group 3: Strategic Initiatives - Under CEO Bill Ready, Pinterest has focused on enhancing its platform's attractiveness through AI investments, including the development of proprietary multimodal large language models [2][3] - The company has partnered with Instacart to enable shoppable ads, particularly in the food and beverage category, aiming to attract more consumer packaged goods advertisers [4] - Pinterest is narrowing the ARPU gap between U.S. and international markets, with strong performance in Europe and emerging markets supported by partnerships [7][11] Group 4: Market Position and Valuation - Pinterest's stock trades at a forward price-to-earnings ratio of about 19 based on 2025 estimates and 16 based on 2026 estimates, which is considered attractive given its revenue and profitability growth [14] - The company is experiencing strong momentum among younger users, with 50% of its user base now consisting of Gen Zers, indicating a positive trend for future engagement [11][15]

Core Viewpoint - Pinterest has experienced a 10% decline in stock price following quarterly earnings that fell short of expectations, yet the stock is considered a worthwhile investment at approximately $35 due to reasonable valuation and strong operational performance [2][3][8] Financial Performance - Pinterest's revenues have shown significant growth, with a 17% increase to $998 million in the latest quarter compared to $854 million a year prior, outperforming the S&P 500's 4.3% rise [6] - The company has achieved an average growth rate of 12% in its top line over the past three years, compared to 5.2% for the S&P 500 [6] - Operating income over the past four quarters was $216 million, reflecting a modest operating margin of 5.5%, while operating cash flow was $1.1 billion with a high cash flow margin of 27.5% [12] - Net income for the last four quarters was $1.9 billion, demonstrating a notably high net income margin of 49.3% [12] Valuation Metrics - Pinterest has a price-to-sales (P/S) ratio of 6.8, compared to 3.0 for the S&P 500, and a price-to-earnings (P/E) ratio of 13 against the benchmark's 22.6 [6] - The company's price-to-free cash flow (P/FCF) ratio stands at 24, while the S&P 500 is at 20.6 [6] - The current valuation of 6.8 times trailing revenues is consistent with its four-year average P/S ratio of 7.3, indicating potential for further appreciation [8] User Growth and Market Position - Pinterest's global monthly active users have increased by 11% year-over-year to an all-time high of 578 million, driven by AI-driven personalization and strategic partnerships [9] - The strong user growth could warrant a higher valuation multiple for the stock as the trend progresses [9] Financial Stability - Pinterest's balance sheet is robust, with a debt amount of $137 million and a market capitalization of $24 billion, resulting in a favorable debt-to-equity ratio of 0.6% compared to 24.1% for the S&P 500 [12] - Cash and cash equivalents constitute $2.7 billion out of $5.4 billion in total assets, leading to a strong cash-to-assets ratio of 49.2% compared to 6.7% for the S&P 500 [12] Downturn Resilience - PINS stock has performed poorly compared to the S&P 500 during recent downturns, indicating weak resilience in economic downturns [7][13] - The stock has dropped 80.7% from its peak of $89.15 in February 2021 to $17.19 in June 2022, while the S&P 500 experienced a peak-to-trough decline of 25.4% [13]