Pinterest’s Earnings Call Highlights Growth and Challenges

Pinterest ((PINS)) has held its Q2 earnings call. Read on for the main highlights of the call.

Pinterest’s Latest Earnings Call: Strong Growth Amid Challenges

Pinterest’s latest earnings call painted a picture of robust growth, particularly in user numbers and revenue, driven by international markets and Gen Z engagement. The company is making significant strides in AI-driven personalization and search capabilities, with strong early adoption of Pinterest Performance+. However, challenges such as declining ad pricing and tariff-related headwinds were also highlighted, alongside increased infrastructure costs due to user growth.

Record High Users

Pinterest reported a remarkable milestone, ending the quarter with 578 million monthly active users (MAUs), an 11% increase year-over-year. This marks another quarter of record high users, showcasing the platform’s growing appeal and reach.

Revenue Growth

The company achieved a Q2 revenue of $998 million, reflecting a 17% increase year-over-year. This growth underscores Pinterest’s strength across conversion and awareness objectives, bolstering its financial performance.

Gen Z Engagement

Gen Z continues to be a significant demographic for Pinterest, with over 50% of its monthly active users belonging to this group. This highlights the platform’s strong resonance with the next generation and its potential for future growth.

AI-Driven Personalization

Pinterest is leveraging AI to enhance content relevance and personalization, resulting in a 230 basis point lift in search fulfillment rates year-to-date. This advancement is crucial for maintaining user engagement and satisfaction.

International Expansion

Revenue from the Rest of World markets experienced substantial growth, increasing by 65% on a reported basis and 72% on a constant currency basis. Europe also saw a 34% revenue growth, indicating successful international expansion efforts.

Pinterest Performance+ Adoption

The adoption of Pinterest Performance+ campaigns has more than doubled since the end of last year. This indicates strong early adoption and highlights the platform’s potential to drive lower funnel revenue effectively.

Ad Pricing Decline

Despite the positive growth metrics, Pinterest faced a 25% year-over-year decline in ad pricing. This was primarily due to a shift in ad impressions from previously unmonetized or under-monetized international markets.

Tariff-Related Headwinds

The UCAN region experienced challenges as Asia-based e-commerce retailers pulled back spending in the U.S. due to changes in the de minimis exemption, impacting revenue from this region.

Infrastructure Cost Increase

The cost of revenue rose by 10% year-over-year, driven by increased infrastructure spending related to user and engagement growth. This reflects the company’s commitment to supporting its expanding user base.

Forward-Looking Guidance

Looking ahead, Pinterest provided guidance for Q3 2025, projecting revenue between $1.033 billion and $1.053 billion, representing a 15% to 17% growth year-over-year. The company anticipates a 1% tailwind from foreign exchange effects. In terms of profitability, adjusted EBITDA is expected to range from $282 million to $302 million, with continued margin expansion in the second half of 2025. Pinterest plans to focus on investments in AI and sales growth, particularly in R&D and sales enablement, to support its revenue-driving initiatives.

In conclusion, Pinterest’s earnings call highlighted strong growth in user numbers and revenue, driven by international markets and Gen Z engagement. While the company faces challenges such as declining ad pricing and tariff-related headwinds, its strategic focus on AI-driven personalization and international expansion positions it well for future growth. The forward-looking guidance reflects Pinterest’s commitment to leveraging AI to enhance user engagement and deepen advertiser relationships.