Social commerce platform Pinterest (NYSE: PINS) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 16.9% year on year to $998.2 million. Guidance for next quarter’s revenue was better than expected at $1.04 billion at the midpoint, 1.6% above analysts’ estimates. Its non-GAAP profit of $0.33 per share was 6.2% below analysts’ consensus estimates.

Is now the time to buy PINS? Find out in our full research report (it’s free).

StockStory’s Take

Pinterest’s second quarter results for 2025 reflected robust user and revenue growth, but the market responded negatively due to profitability concerns. Management highlighted that product improvements, especially advanced AI-driven personalization and visual search, drove record user engagement and accelerated adoption among Gen Z. CEO Bill Ready noted, “Pinterest is resonating with our users more than ever before, and we have found our strongest ever product market fit.” However, the company faced margin pressures, with international expansion and higher infrastructure investments impacting short-term earnings.

Looking forward, Pinterest’s guidance for the next quarter builds on continued momentum in new product features and advertiser tools, with management emphasizing ongoing investments in AI and international market expansion. CFO Julia Donnelly stated that greater headcount growth in R&D and global enterprise sales teams will support upcoming product initiatives but cautioned that margin expansion will be more modest in the second half of the year as Pinterest prioritizes growth over near-term profitability. Management expects continued gains from innovations like Performance+ and new partnerships to drive durable revenue growth.

Key Insights from Management’s Remarks

Management attributed the quarter’s user and revenue growth to the platform’s unique AI-driven curation capabilities and broadening appeal across demographics, but acknowledged headwinds from declining ad pricing and increased operating expenses.

• Gen Z engagement surge: Over 50% of Pinterest’s monthly active users are now Gen Z, who are increasingly using the platform for visually driven search and product discovery, making Pinterest a preferred destination among younger audiences.
• AI-led personalization: Proprietary AI models, including the new multimodal model for visual search, have improved content relevance, resulting in higher user engagement and a significant lift in search fulfillment rates.
• International momentum: User and revenue growth accelerated in Europe and Rest of World regions, driven by tailored go-to-market strategies and a ramp-up in first-party sales and reseller partnerships. Management sees narrowing the monetization gap with North America as a key opportunity.
• Ad pricing declines: While ad impressions grew due to increased international ad loads, average ad pricing fell, reflecting a shift toward lower-priced international inventory and impacting overall monetization rates.
• Advertiser tools adoption: Early results from the Performance+ ad suite show strong uptake, particularly among mid-market advertisers, with new features such as creative previews and campaign customer groups improving campaign efficiency and attracting new client segments.

Drivers of Future Performance

Pinterest’s outlook centers on expanded AI capabilities, new shoppable experiences, and continued international growth, offset by rising R&D investments and evolving ad market dynamics.

• AI and product innovation: Management believes further integration of AI into search, recommendations, and shopping experiences will deepen user engagement and provide more effective tools for advertisers, supporting long-term revenue growth.
• International monetization: Efforts to close the monetization gap between North America and international regions are expected to continue, with tailored sales strategies and partnerships in Europe and Rest of World markets viewed as growth levers.
• Margin pressures and investment: CFO Julia Donnelly signaled that ongoing R&D hiring and sales team expansion—especially in support of AI initiatives—will limit margin expansion in the near term, as Pinterest prioritizes product development and market share gains over immediate profitability.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will be watching (1) whether Pinterest can maintain user growth and engagement, particularly among Gen Z and international audiences; (2) the adoption and impact of new AI-powered features and shoppable ad formats; and (3) the ability to narrow the international monetization gap without further compressing margins. Execution on R&D investments and partnership initiatives will be key to sustaining momentum.

Pinterest currently trades at $34.09, down from $39.21 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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