Pinterest (PINS) Q3 2025: International Revenue Climbs 66%, Unlocking Global Monetization Runway
Pinterest’s Q3 showcased a decisive shift as international revenue growth outpaced North America, validating the platform’s global shopping and visual search strategy. The company’s AI-powered commerce engine is deepening engagement and driving advertiser adoption, while new ad formats and automation tools are expanding Pinterest’s share of wallet across all segments. Forward guidance reflects both international momentum and near-term caution in North America, with management doubling down on AI and global sales investments for 2026.
Summary
- Global Monetization Gap Narrows: International revenue growth is accelerating as Pinterest exports its UCAN playbook abroad.
- AI-Driven Engagement Deepens: Visual search and recommendation advances are driving higher per-user activity and advertiser value.
- Margin Expansion Balances Investment: Profitability improves even as AI and sales investments ramp for future growth.
Performance Analysis
Pinterest delivered 17% year-over-year revenue growth in Q3, with global revenue reaching $1.05 billion. International performance was the standout, as Europe revenue surged 41% and the rest of world climbed 66%, together now accounting for 25% of global revenue. The U.S. and Canada (UCAN) region, while still the largest contributor, grew at a more modest 9%, reflecting both a mature market and pockets of retailer ad pullback due to tariff-related margin pressures. User growth remained robust, with global monthly active users (MAUs) up 12% to 600 million, marking the ninth consecutive quarter of record highs. Notably, Gen Z now represents over half the user base, reinforcing Pinterest’s relevance with younger demographics.
Ad impressions grew 54%, but ad pricing declined 24% as monetization expanded into lower-priced international markets. Disciplined cost management and operating leverage drove a 170 basis point improvement in adjusted EBITDA margin to 29%, with free cash flow conversion remaining above 90%. The company allocated nearly $200 million to share repurchases, keeping diluted share count flat year-over-year.
- International Acceleration: Europe and rest of world outpaced UCAN, with shopping ad revenue in these regions more than doubling regional growth rates.
- Visual Search Engagement: Queries from visual search features grew 44%, and outbound advertiser clicks rose 40% year-over-year.
- Ad Mix Shift: Strong ad impression growth was offset by lower pricing as Pinterest scaled in under-monetized markets.
Overall, the business is successfully balancing global expansion, deepening user engagement, and margin improvement, despite some near-term North American headwinds.
Executive Commentary
"Over the past few years, we've transformed Pinterest from a platform of window shopping, where users often found that all the stores were closed, into an AI-powered visual-first shopping assistant. We are digitally replicating the joyful experiences of walking the bazaar or working with a great salesperson at your favorite boutique, while seamlessly enabling our users to take action."
Bill Reddy, Chief Executive Officer
"Our revenue growth combined with our disciplined approach to cost led to another strong quarter of adjusted EBITDA coming in at $306 million, a margin of 29%. Adjusted EBITDA margin expanded 170 basis points versus Q3 last year and helped to deliver Q3 free cash flow of $318 million. This speaks to the inherent profitability of our business and highly cash generative nature of our model."
Julia Donnelly, Chief Financial Officer
Strategic Positioning
1. Visual Search and AI as Differentiators
Pinterest’s core advantage lies in its AI-powered visual search and recommendation engine, which leverages billions of first-party intent signals from logged-in users. The company’s proprietary multimodal models now outperform off-the-shelf alternatives by 30% in content relevance. This “taste graph” enables proactive, individualized shopping journeys, not just reactive search, setting Pinterest apart from traditional search and chat-based commerce platforms.
2. Expanding International Monetization
International markets represent Pinterest’s largest untapped growth lever. While 83% of MAUs are outside UCAN, they account for just 25% of revenue. The company is localizing its lower funnel “shopping ads” playbook, integrating with agency and tech partners in Europe, and deploying resellers and third-party demand in the rest of world. Shopping ads now make up 30% of international revenue, up from 9% two years ago, with ARPU in Europe and rest of world growing 31% and 44%, respectively.
3. Performance Ads and Automation
Pinterest Performance Plus, the company’s AI-driven automated ad suite, is gaining traction with mid-market and SMB advertisers, leading to a 12% higher monthly spend post-adoption. ROAS (return on ad spend) bidding, a recent addition, has doubled the number of shopping SKUs with paid impressions and now drives 22% of lower funnel retail revenue globally. These tools simplify campaign management and allow advertisers to target more of their catalog, boosting platform ad density and relevance.
4. Product Innovation and Commerce Integration
New ad formats and commerce integrations are making Pinterest a more actionable shopping destination. Top of Search ads, local inventory ads, and “Where to Buy” links are increasing click-through rates and purchase intent, while partnerships with retailers and platforms like Instacart enable seamless checkout experiences. The launch of Pinterest Assistant, a voice-activated AI shopping guide, is the next step in agentic commerce, aiming to further reduce friction from inspiration to purchase.
5. Disciplined Capital Allocation and Margin Expansion
Management is balancing growth investments with margin discipline. Operating expenses are focused on AI, product, and sales headcount, while infrastructure costs are being managed through open-source AI models and efficiency improvements. The company’s long-term EBITDA margin target (30%-34%) appears achievable, with current margins already at the low end of that range.
Key Considerations
Pinterest’s Q3 demonstrates a business at an inflection point, where international monetization, AI-driven engagement, and product innovation are converging to create new growth vectors. However, the company must navigate competitive ad markets, potential margin pressures, and evolving user behaviors.
Key Considerations:
- International Playbook Export: The rapid growth in Europe and rest of world validates Pinterest’s ability to replicate its North American success abroad, but sustaining this pace will require continued localization and agency partnership execution.
- AI Cost Structure: Open-source AI models are reducing infrastructure costs, allowing Pinterest to scale visual search and recommendation features without margin erosion.
- Ad Mix and Pricing Dynamics: Expanding impressions in lower-priced markets boosts reach but dilutes average ad pricing, requiring ongoing yield management.
- Mid-Market and SMB Opportunity: Performance Plus is unlocking a new segment of advertisers, but this cohort currently represents just 15% of revenue, leaving significant runway.
- Tariff and Retailer Headwinds: North American ad spend from large retailers remains sensitive to macro and tariff-related pressures, which could persist into Q4 and beyond.
Risks
North American ad spend remains vulnerable to retailer margin pressures, particularly from tariffs and macro uncertainty. International expansion exposes Pinterest to execution risk, including local competition, regulatory hurdles, and agency adoption. Ad pricing dilution from rapid expansion in lower-ARPU regions could offset some top-line gains if not managed carefully. Finally, the pace of AI-driven innovation must keep up with both user expectations and competitive platforms.
Forward Outlook
For Q4 2025, Pinterest guided to:
- Revenue of $1.31 to $1.34 billion, representing 14% to 16% year-over-year growth
- Adjusted EBITDA of $533 million to $558 million, confirming continued margin expansion
For full-year 2025, management maintained its long-term EBITDA margin target of 30%-34%. Key drivers for Q4 and 2026 include:
- Continued investment in AI and R&D, especially for visual search and shopping innovation
- Expansion of global sales teams and agency partnerships to accelerate international monetization
Takeaways
- International Growth Engine: Pinterest’s ability to double international shopping ad revenue in key regions signals a durable, multi-year growth opportunity if execution remains strong.
- AI and Automation as Core Levers: Visual search, proactive recommendations, and automated ad tools are driving deeper engagement and expanding advertiser budgets, particularly among mid-market and SMB clients.
- Margin and Capital Discipline: Profitability is improving even as Pinterest invests aggressively in AI and global expansion, with open-source models and infrastructure efficiency helping to offset cost pressures.
Conclusion
Pinterest’s Q3 underscores the company’s evolution from a digital pinboard to a global, AI-powered commerce platform. International monetization and product innovation are driving growth, while disciplined cost management is supporting margin expansion. The next phase will hinge on sustaining international momentum, scaling AI-driven ad products, and navigating macro headwinds in North America.
Industry Read-Through
Pinterest’s international acceleration and AI-driven engagement model offer a clear roadmap for other digital platforms seeking to close monetization gaps outside North America. The rapid adoption of automated ad suites and proactive visual search highlights the growing importance of first-party data and personalized commerce journeys across the sector. Ad pricing dilution from new market expansion is a risk for all global platforms, while capital discipline and open-source AI adoption are emerging as key differentiators in balancing innovation and profitability. Retailers and agencies should expect further convergence of inspiration, search, and transaction as commerce platforms double down on AI-powered user experiences.