Pinterest's Growth Engine Hits a Wall As Revenue Slows Sharply
Pinterest Inc. (NYSE:PINS) stock fell in premarket trading Friday after the company missed third-quarter earnings and revenue expectations and issued a fourth-quarter outlook below Wall Street estimates.
Earnings Snapshot
Pinterest’s global revenue growth slowed sharply to 12% in the third quarter from 18% in the second quarter, as European regulatory changes, reduced spending by cross-border sellers and the timing of major advertising events weighed on performance.
The slowdown came despite record user growth and a 17% increase in advertising impressions, highlighting the company’s struggle to turn rising engagement into faster revenue growth.
Pinterest’s third-quarter revenue rose 12% year over year to $1.17 billion, missing analysts’ consensus estimate of about $1.21 billion.
Adjusted earnings came in at 46 cents per share, below the 48-cent estimate.
Global monthly active users increased 10% year over year to a record 661 million, marking the company’s 13th consecutive quarter of record user numbers.
Adjusted EBITDA totaled $339 million, representing a 29% margin, while free cash flow reached $300 million.
Pinterest ended the quarter with $1.5 billion in cash and marketable securities.
User Growth and Advertising Trends
Monthly active users rose 4% in the U.S. and Canada, 7% in Europe and 13% in the rest of the world.
Gen Z accounted for 57% of users, remaining Pinterest’s fastest-growing and most engaged demographic.
Advertising impressions increased 17%, while ad pricing declined 4%.
Management said reduced spending by cross-border sellers, advertising timing and foreign exchange pressures collectively lowered global revenue growth by six percentage points to 12%, compared with 18% in the second quarter.
AI-Powered Shopping and Advertising
Pinterest continues to invest in AI-powered search, recommendations and shopping through its Pinterest Intelligence platform.
Pinterest Assistant is now generally available in the U.S., with roughly 80% of searches using the AI tool showing commercial intent.
New features include Ask Mode, Restyle and Beauty Guides, aimed at improving product discovery and shopping engagement.
Pinterest is also testing Visual Search Ads and a new app-install advertising objective while expanding adoption of its AI-powered Performance Plus campaigns.
An early e-commerce test showed a 77% increase in new-customer return on ad spend after Pinterest combined proprietary measurement with AI-powered bidding tools.
Meanwhile, the company is restructuring its international sales operations to improve advertiser coverage and productivity, although management expects the benefits to take time.
Fourth-Quarter Outlook
Pinterest expects fourth-quarter revenue of $1.425 billion to $1.475 billion, below analysts’ consensus estimate of $1.52 billion.
The company forecasts adjusted EBITDA of $538 million to $588 million, compared with $339 million in the third quarter.
Management expects U.S. and Canadian growth to be partly offset by weaker international revenue as cross-border sellers pull back on advertising.
Pinterest maintained its full-year 2026 adjusted EBITDA margin forecast of approximately 30%.
PINS Price Action: Pinterest shares were down 9.19% at $18.08 during premarket trading on Friday, according to Benzinga Pro data.
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