PINTEREST, INC. Q3 FY2026 earnings call

• User Growth & Engagement: Global Monthly Active Users (MAUs) reached a record 661 million, growing 10%. UCAN engagement is deepening, with searches, boards created, and outbound clicks outpacing user growth. Gen Z now represents 57% of users and drives significant retention.
• AI Strategy: Pinterest utilizes 'agentic discovery' where 70% of searches begin with proactive AI recommendations rather than typed queries. Pinterest Assistant is in general availability in the US, with 80% of its searches being commercial compared to 50% platform-wide.
• Product Innovations: Visual Search Ads are in beta, targeting high-intent moments. 'Restyle' allows users to reimagine rooms via AI image generation. App promotion objectives are launching globally.
• Go-to-Market Restructuring: International sales leadership has been upgraded to focus on performance selling. Early signs indicate re-acceleration in core European enterprise growth in Q4, despite Q3 headwinds.
• Programmatic Expansion: New partnerships with major DSPs (Google DV360, Amazon DVA+, Yahoo DSP) expand demand sources, though ramp-up takes time.
• Financial Efficiency: Adjusted EBITDA margin was 29%, down 30 bps YoY due to infrastructure spend for GPU capacity and user growth. Headcount decreased 4% YoY excluding acquisitions.

Global revenue was $1.174 billion, up 12% year-over-year. The U.S. and Canada (UCAN) segment generated $894 million in revenue, representing approximately 76% of total revenue, with growth of 14%. Europe contributed $193 million (approx. 16% of revenue), remaining roughly flat on a reported basis due to an 11-point drag from cross-border seller pullbacks following EU regulatory changes. Rest of World contributed $87 million (approx. 7% of revenue), growing 24%.

• Q4 Revenue Guidance: Set at $1.425 billion to $1.475 billion, representing 8% to 12% year-over-year growth. The range was widened to reflect uncertainty regarding international regulatory impacts.
• Q4 EBITDA Guidance: Expected between $538 million and $588 million.
• Full Year Outlook: Management maintains an expectation for full-year 2026 adjusted EBITDA margins of approximately 30%.
• Key Assumptions: Guidance assumes continued strong UCAN growth offset by persistent pressure from cross-border seller pullbacks in international markets. FX is expected to be a modest headwind.

• Regulatory Headwinds: Changes to the EU de minimis exemption caused a significant pullback from cross-border sellers, creating a larger-than-anticipated drag on international revenue.
• International Transition Risks: The restructuring of the international go-to-market organization involves new leadership ramping up; benefits are expected to take time to materialize and may not fully offset short-term pressures.
• Ad Pricing Pressure: Ad pricing declined 4% as impression growth outpaced revenue growth, indicating potential monetization challenges amidst volume increases.
• Execution Risk: Success depends on the timely adoption of new AI products (Assistant, Visual Search Ads) and the successful expansion of programmatic partnerships.

Q: Analyst asked when international revenues might accelerate given Q3 headwinds.

A: CEO Bill Ready noted that while Q3 saw a 3-point deceleration from EU regulatory changes and GTM restructuring, early signs of improvement are emerging. Core European enterprise growth re-accelerated above Q2 levels quarter-to-date in Q4. However, cross-border seller pullbacks will continue to weigh on growth in Q4, requiring multi-quarter adaptation by advertisers using local warehouses.

Q: Analyst inquired about the role of Pinterest Assistant relative to core discovery and horizontal agents.

A: CEO explained Assistant acts as a co-pilot woven into the experience, not a separate app. With 80% of Assistant searches being commercial, it aligns AI with monetizable use cases. Regarding horizontal agents, he argued users want assistance but not to lose control of shopping decisions. Pinterest’s vertical focus preserves engagement even as horizontal AI tools emerge, as users value the joy of discovery over pure automation.

Q: Analyst asked why Pinterest expanded programmatic DSP partnerships now and what drove UCAN's specific growth dynamics.

A: CEO cited advances in privacy-preserving technology and learnings from prior initiatives (like TV Scientific) enabling safer audience extension to DSPs like Google and Amazon. CFO Andrew Somberg clarified UCAN grew 14%, re-accelerating from late 2025. Softness in food/beverage/alcohol was partially offset by strength in health (including GLP-1 advertisers) and retail, noting Q2 had unique one-time boosts from Prime Day/World Cup timing.

Q: Analyst questioned how to view the ARPU gap internationally versus user growth closure.

A: CEO highlighted a meaningful ARPU gap between UCAN and international markets. While user behavior is global, monetization lags. He expressed confidence that as GTM changes take hold and advertisers adapt to regulatory shifts (similar to US tariff adjustments), international ARPU will re-accelerate. He emphasized that underlying shopping intent remains strong globally, providing a durable foundation for future monetization.

Q: Analyst requested updates on AI-driven bidding optimization impact.

A: CEO stated that integrating proprietary measurement systems with AI bidding yields hyper-specific outcomes. A leading e-commerce platform saw 77% higher new customer ROAS in early testing. The strategy focuses on sophisticated advertisers first, with plans to extend via third-party measurement providers to the longer tail. Adoption curves are gradual but promising for long-term efficiency.