- Revenue & MAU Growth: Revenue surged 17% YoY to $998M, with MAUs reaching 578M (+11% YoY), driven by AI-enhanced content relevance.
- Adjusted EBITDA Margin: Achieved $251M adjusted EBITDA (25% margin) and $197M free cash flow, reflecting operational efficiency.
- AI-Driven Engagement: AI-powered personalization boosted search fulfillment by 230 bps YoY, with 75% growth in the proprietary taste graph over two years.
- Ad Performance Metrics: Ad impressions grew 55% YoY, though ad pricing declined 25% due to international market mix; Performance+ campaigns doubled lower-funnel revenue.
- Demographic Expansion: Gen Z constitutes 51% of MAUs, while male users saw 95% YoY growth in searches like "rock climbing aesthetic," broadening audience diversity.
Financial Performance
Cost of revenue increased 10% to $197 million, while non-GAAP operating expenses rose 14% to $555 million. The company's guidance for Q3 includes revenue growth of 15% to 17% and adjusted EBITDA of $282 million to $302 million. Pinterest expects to deliver adjusted EBITDA margin expansion in the second half of 2025, albeit at a lower level than in the first half.
User Growth and Engagement
Pinterest's user growth accelerated, with 578 million monthly active users, up 11% year-over-year. Gen Z accounts for over 50% of MAUs, and users are increasingly using Pinterest as a search destination, with 39% of Gen Z users using Pinterest as a search engine. The company's AI-driven visual search capabilities are driving user growth across demographics and geographies.
Investment Priorities and Valuation
Pinterest is investing heavily in AI to succeed in the new era of search, with a focus on making AI essential to everything it does. The company's valuation metrics include a P/E Ratio of 12.54, a P/B Ratio of 5.07, and a P/S Ratio of 6.31, indicating that the market is pricing in durable growth and profitability. With a Free Cash Flow Yield of 4.01% and an ROIC of 24.79%, Pinterest's investments in AI and user growth appear to be generating attractive returns.
Outlook
Analysts estimate next year's revenue growth at 14.7%. While Pinterest's actual EPS came out at $0.33, relative to estimates at $0.34, the company's durable growth and profitability suggest that the stock may have upside potential. As Pinterest continues to execute on its growth levers, including Pinterest Performance+, and invests in high-value areas that enhance its products, the company's long-term prospects appear promising.