Pinterest (NYSE:PINS) reported second-quarter revenue of $1.18 billion, up 18% year over year, as the company cited continued user growth, advertising-platform improvements and stronger sales execution in its U.S. and Canada business. The company ended June with 640 million monthly active users, up 11% from a year earlier and representing its 12th consecutive quarter of record users.
CEO Bill Ready said Pinterest’s strategy remains centered on visual discovery, shopping and artificial intelligence. He said the company is using AI across its consumer experience, advertising tools and internal operations, while working to better monetize the commercial intent of its users.
User growth and AI product expansion
The company said its platform generates more than 80 billion monthly searches, most of them visual, and that more than half are commercial. Ready added that over 96% of text-based searches are unbranded, creating an opportunity for marketers to reach users before they have selected a product or brand.
During the quarter, Pinterest expanded Pinterest Assistant, its conversational AI layer. By the end of July, the feature was available to the vast majority of U.S. users. The assistant is designed to help users with later-stage shopping and planning tasks, including product comparisons, instructions and visual guidance.
Ready said the product is built on Pinterest’s “Taste Graph,” which uses signals from searches, saves and boards to personalize recommendations. Pinterest is using a mix of internally developed models, post-trained open-source models and, in limited cases, closed third-party models. According to Ready, open models post-trained on Pinterest data have delivered cost per transaction at less than 8% of comparable closed proprietary models.
Advertising tools and monetization efforts
Ready said AI is also being used to improve advertiser targeting, bidding, creative and measurement. Pinterest continued to promote Pinterest Performance+, its automated campaign offering for lower-funnel advertisers. As of the first quarter, about 30% of lower-funnel revenue ran through Performance+ campaigns, and adopters grew lower-funnel spending more than twice as fast as non-adopters, he said.
During the quarter, Pinterest launched Smart Assembly, a Performance+ creative tool for advertisers without product catalogs. The tool automatically combines multiple advertiser-provided images to create and serve ads. In early alpha testing, Smart Assembly produced a 6% average improvement in click-through rates, Ready said.
The company also began piloting integrations between some large advertisers’ in-house measurement systems and Pinterest’s AI bidding systems. Ready said the participating advertisers saw meaningful performance improvements and increased confidence to spend more on Pinterest, partially contributing to second-quarter outperformance. Pinterest plans to expand the testing to a limited number of additional advertisers during the third quarter.
Ready said Pinterest is making changes to its shopping-ad delivery systems to improve product selection, increase the variety of relevant products shown to users and better allocate advertiser budgets. The company also expects to fully integrate connected-TV company tvScientific into Pinterest Performance+ in 2027.
Regional performance and international challenges
Revenue in the U.S. and Canada rose 18% to $880 million, driven by retail and emerging categories including financial services, travel and health. The growth rate marked a five-percentage-point sequential acceleration in the company’s largest market.
Europe revenue rose 12% on a reported basis to $213 million, or 7% in constant currency. Rest-of-world revenue increased 38% to $87 million, or 32% in constant currency. CFO Julia Donnelly said growth in Europe and rest-of-world markets moderated as expected due to more difficult comparisons, leadership and structural changes in the company’s go-to-market organization, and pressure from Asia-based cross-border retailers affected by regulatory actions, particularly in Europe.
Donnelly said Pinterest expects some disruption internationally to continue through the third quarter. The company has installed new international sales leadership and is working on market prioritization, advertiser and agency relationships, measurement consistency, and testing expanded third-party demand in Europe.
Profitability, capital return and outlook
Pinterest reported $311 million in adjusted EBITDA for the quarter, representing a 26% adjusted EBITDA margin, up 130 basis points year over year. Free cash flow was $270 million, and trailing 12-month free cash flow totaled nearly $1.3 billion, representing 94% conversion.
- Ad impressions increased 16% year over year.
- Ad pricing increased 1%, aided by stronger U.S. and Canada demand and a higher mix of impressions from that region.
- Cost of revenue rose 25% to $245 million, reflecting a full-quarter impact from tvScientific and additional GPU capacity.
- Non-GAAP operating expenses increased 13% to $629 million, driven primarily by sales and marketing and research and development investment.
The company repurchased $58 million of shares during the quarter and said it has repurchased more than $2 billion of stock year to date, retiring nearly 111 million shares. It ended the quarter with $1.3 billion in cash, cash equivalents and marketable securities.
For the third quarter, Pinterest forecast revenue of $1.19 billion to $1.21 billion, representing year-over-year growth of 13% to 15%, and adjusted EBITDA of $335 million to $355 million. Donnelly said the outlook incorporates foreign-exchange headwinds, the shift of Prime Day spending from the third quarter last year to the second quarter this year, and the absence of World Cup-related spending that benefited the second quarter.
Following first-half revenue outperformance, Pinterest raised its full-year 2026 adjusted EBITDA margin expectation to approximately 30%, from its prior expectation of about 29%.
About Pinterest (NYSE:PINS)
Pinterest, Inc operates a visual discovery platform that helps users find inspiration and ideas for projects ranging from home design and fashion to cooking and travel. Users create and curate “Pins” — images or videos linked to content — organized on thematic boards. The service is available through its website and mobile applications and emphasizes personalized recommendations and visual search to surface relevant content based on user interests.
The company’s primary revenue model is advertising, offering promoted content formats that integrate into user feeds and search results.
