Pinterest (PINS) Q2 2025: International Revenue Soars 65% as Visual Search and Gen Z Engagement Reshape Growth Curve

August 7, 2025 | By EarningsIQ Research

Pinterest’s Q2 2025 results underscore a structural shift: international monetization and Gen Z engagement are now core growth engines, not side stories. The company’s deepening investment in AI-driven visual search, paired with broadening advertiser demand and new shoppable experiences, is creating a more durable, diversified business model. With margin expansion moderating and a clear focus on compounding, not step-function, gains, investors must recalibrate expectations for Pinterest’s next phase of platform evolution.

Summary

• International Monetization Gap Narrows: Accelerated growth in Europe and Rest of World points to Pinterest’s expanding global opportunity.
• Gen Z and Visual Search Drive User Growth: Over half of users are Gen Z, with AI-powered visual search fueling engagement and retention.
• Performance Plus and Shopping Integration Deepen Platform Value: New lower funnel tools and Instacart partnership unlock incremental revenue streams.

Performance Analysis

Pinterest delivered a quarter of broad-based strength, with international markets as the clear standout. Revenue grew double digits across all regions, but the Rest of World segment surged 65% year over year, now representing a material and rising share of the business. Europe posted 34% growth, driven by retail advertisers and the rollout of performance ad products. The US and Canada, still the largest market, saw solid but more modest expansion, reflecting both market maturity and some tariff-related pullback from Asia-based ecommerce advertisers.

Ad impressions leapt 55% as Pinterest leaned into both higher engagement and increased ad load, a lever that continues to drive monetization without saturating the user experience. However, this mix shift toward emerging markets and new ad formats drove a 25% decline in overall ad pricing, a tradeoff management frames as net revenue accretive. Importantly, the company’s ability to translate engagement into action is improving: search fulfillment rates rose 230 basis points, and conversion rates on lower funnel ads climbed 5% after new AI model launches.

• International Revenue Acceleration: Rest of World and Europe now outpace North America, validating Pinterest’s multi-channel sales approach and local partnerships.
• Ad Load and Engagement Synergy: Twelve consecutive quarters of ad impression growth demonstrate Pinterest’s ability to scale monetization with user growth.
• Margin Expansion Moderates: Adjusted EBITDA margin rose 310 basis points, but management signals a slower pace as R&D and sales investments ramp in H2.

The platform’s user base reached a record 578 million MAUs, up 11% year over year, with Gen Z now comprising over 50% of monthly actives. Engagement and actionability, especially in key regions like UCAN (US and Canada), continue to drive higher retention and monetization per user.

Executive Commentary

Strategic Positioning

1. AI-Driven Visual Search as Core Differentiator

Pinterest’s proprietary AI models, especially its multimodal visual search, are now central to both user and advertiser value. The new generative retrieval model and LLM-powered search recommendations have driven measurable improvements in relevance, engagement, and conversion. This capability is particularly resonant with Gen Z, who prefer visual-first, intent-driven discovery over traditional search.

2. International Monetization Flywheel

Europe and Rest of World are now driving the fastest revenue growth, with local sales teams, reseller partnerships, and tailored ad products narrowing the ARPU gap with North America. Pinterest’s ability to activate performance budgets in these regions, especially in retail, demonstrates the portability of its lower funnel playbook.

3. Performance Plus and Shopping Integration

The Pinterest Performance Plus suite, including ROAS bidding and creative previews, is expanding platform accessibility to mid-market and smaller advertisers. Early adoption has more than doubled lower funnel revenue through the platform since late 2024. The Instacart partnership opens new shoppable ad formats in food and beverage, a previously under-monetized endemic category, and leverages retail purchase data for higher ad relevance.

4. User Base Diversification and Depth

Gen Z now accounts for over half of Pinterest’s MAUs, but the platform is also seeing increased engagement across generations and gender. Male user growth and broader use cases (e.g., travel, parenting, hobbies) further expand the platform’s reach and advertiser appeal.

5. Brand Safety and Positive Platform Ethos

Pinterest’s commitment to positivity, inclusivity, and brand safety is a strategic moat, attracting both creators and advertisers seeking a differentiated environment from traditional social platforms. High-profile partnerships, such as with Dove and Emma Chamberlain, reinforce this positioning.

Key Considerations

Pinterest’s Q2 2025 results reflect a company in transition from a North America-centric, inspiration-focused app to a global, AI-powered commerce and discovery platform. The compounding impact of AI improvements, international expansion, and full-funnel ad innovation is driving both user and revenue growth, but also introduces new operational and execution complexities.

Key Considerations:

• International Pricing Pressure: Rapid growth in lower-ARPU markets is diluting average ad pricing, though management asserts this is offset by net revenue gains and future ARPU upside.
• AI Investment Cycle: Heavy R&D and sales hiring, especially in AI and enterprise sales, will moderate margin expansion in the back half of 2025 but is expected to yield long-term returns.
• Performance Plus Adoption: Early traction in the mid-market segment suggests a multi-year runway for deeper advertiser penetration and lower funnel monetization.
• Gen Z Engagement Sustainability: Maintaining relevance with this cohort is critical, as their preferences drive both platform evolution and advertiser interest.
• Shopping and Commerce Integration: Partnerships like Instacart and new buy-flow features mark a pivot toward actionable commerce, but execution will be key to capture incremental CPG and retail budgets.

Risks

Macro ad spend volatility, especially in North America, remains a headwind, with tariff changes impacting certain ecommerce advertisers. The rapid pace of international expansion introduces execution risk, particularly in localizing sales strategies and maintaining ad quality. AI talent competition and the need for continued innovation in visual search and personalization could pressure both cost structure and differentiation if not managed carefully.

Forward Outlook

For Q3 2025, Pinterest guided to:

• Revenue of $1.033 billion to $1.053 billion, reflecting 15% to 17% growth year over year
• Adjusted EBITDA of $282 million to $302 million

For full-year 2025, management reiterated its commitment to:

• Adjusted EBITDA margin expansion, but at a lower level than the first half

Management highlighted continued investment in AI R&D and global sales capacity, with a focus on compounding gains in user engagement, monetization, and advertiser diversity.

• Margin expansion will moderate as hiring and product investments accelerate
• International monetization and lower funnel ad product rollout remain top priorities

Takeaways

Pinterest is now a structurally different business than just a year ago, with international markets and Gen Z engagement driving a more diversified and resilient growth profile.

• AI and Visual Search Are Core Moats: Proprietary models and unique curation signals deliver superior recommendations, driving both user retention and ad conversion.
• International Upside Is Real but Brings Complexity: Execution in local sales, pricing, and product adaptation will determine the pace and sustainability of global ARPU gains.
• Investors Should Watch Margin Trajectory and Shopping Integration: As margin expansion slows, the focus shifts to the durability of compounding revenue growth and the success of new commerce features.

Conclusion

Pinterest’s Q2 2025 results mark a turning point: the platform’s growth is now powered by international scale, Gen Z engagement, and AI-driven actionability. The business is less reliant on any single market or demographic, but faces new challenges in sustaining innovation, monetization, and disciplined investment as it scales globally.

Industry Read-Through

Pinterest’s results signal a broader shift in the digital advertising and commerce landscape: platforms that combine proprietary data, AI-powered personalization, and actionable shopping experiences are best positioned to capture incremental ad budgets and user engagement. The rapid growth in international monetization, even at lower ARPU, highlights the importance of global scale and local adaptation. For other visual-first or intent-driven platforms, Pinterest’s success with Gen Z and lower funnel ad innovation sets a new bar for relevance and performance. Ad load and engagement synergy, not just user growth, will increasingly separate winners from laggards in the next phase of social commerce evolution.

PINS Communication Services Social Media AI Visual Search International Gen Z Digital Advertising