Pinterest expects Q4 revenue of $1.425B-$1.475B with adjusted EBITDA of $538M-$588M as EU de minimis changes weigh on international

• "In Q3, we delivered our 13th straight quarter of record users and our 12th straight quarter of double-digit user growth." (CEO William Ready)

• "Overall, Q3 revenue came in below our range. We are not happy with that result, and we have clear plans in place to accelerate our revenue diversification efforts." (CEO Ready)

• "The pullback from cross-border sellers accounted for approximately 3 points of the sequential change in our global revenue growth rate from Q2 to Q3." (CEO Ready)

• "Moving forward, our priorities remain clear. First, continue building a differentiated visual search, discovery and shopping experience; second, keep AI at the core of everything we do. Third, accelerate monetization through improved go-to-market and measurement." (CEO Ready)

• "Global MAUs grew 10% in Q3." (CEO Ready)

• "Gen Z now represents 57% of our users and is our most engaged cohort across monthly retention, saves and sessions." (CEO Ready)

• "Pinterest Assistant is now in general availability in the U.S., and we are encouraged by the early signals." (CEO Ready)

• "In Q3, we delivered $339 million in adjusted EBITDA with an adjusted EBITDA margin of 29%." (CEO Ready)

• "I'm delighted to have joined Pinterest on Monday." (Chief Financial Officer James Dibbo)

Outlook

• "We expect Q4 revenue to be in the range of $1.425 billion to $1.475 billion, representing 8% to 12% year-over-year growth." (CEO William Ready)

• "Our outlook assumes that the puts and takes that impacted our Q3 revenue growth will continue in Q4." (CEO Ready)

• "We expect the pullback from cross-border sellers to continue to weigh on international revenue growth." (CEO Ready)

• "To be prudent, we have widened our Q4 revenue guidance range to reflect the broader range of potential outcomes we see for the quarter." (CEO Ready)

• "For Q4, we expect adjusted EBITDA to be in the range of $538 million to $588 million." (CEO Ready)

• "We continue to expect full year 2026 adjusted EBITDA margins of approximately 30%." (CEO Ready)

Financial Results

• "We ended the quarter with 661 million global monthly active users, or MAUs." (CEO William Ready)

• "In Q3, our global revenue was $1.174 billion, up 12% on a reported and on a constant currency basis." (CEO Ready)

• "Revenue in the U.S. and Canada was $894 million, growing 14%." (CEO Ready)

• "In Europe, revenue was $193 million, roughly flat on a reported basis or up 1% on a constant currency basis." (CEO Ready)

• "Revenue from Rest of World was $87 million, growing 24% on a reported basis or 21% on a constant currency basis." (CEO Ready)

• "In Q3, overall ad impressions grew 17%" (CEO Ready) "Ad pricing in Q3 declined 4% as ad impressions growth outpaced revenue growth." (CEO Ready)

• "In Q3, cost of revenue was $250 million, up 21% year-over-year" (CEO Ready) "driven by increased infrastructure spend" and "investments in GPU capacity as well as the impact of tvScientific." (CEO Ready)

• "We also delivered Q3 free cash flow of $300 million." (CEO Ready)

• "We ended the quarter with cash, cash equivalents and marketable securities of $1.5 billion." (CEO Ready)

Q&A

• Jason Helfstein, Oppenheimer & Co. Inc.: "when do you think that the initiatives could start to turn international revenues"; CEO Ready: "the magnitude of the European regulatory change was greater than we forecast" and "quarter-to-date in Q4, we have since reaccelerated that growth rate above its Q2 level" for "our core European enterprise business, which excludes cross-border sellers."

• John Blackledge, TD Cowen: asked about the "impact of the cross-border sellers" and a "return to growth in Europe"; CEO Ready: "we do anticipate that will still weigh on international growth in Q4, though it stabilized" and "as we look into H1 of next year, we think those -- that allows more time for those advertisers to make those kinds of shifts."

• Colin Sebastian, Baird: asked about "Pinterest Assistant" helping users move "towards a purchase"; CEO Ready: "we're not approaching it as a separate experience" and "roughly 80% of assistant searches are commercial."

• Justin Patterson, KeyBanc: asked about "expand programmatic partnerships" and "auction density"; CEO Ready: "we're now working with DSPs that represent 2/3 of the DSP market" including "Google DV360, Amazon DVA+, Yahoo! DSP" with "Magnite as our supply side partner," and "expect these things to take time to ramp."

• Lloyd Walmsley, Mizuho: asked how "meaningful" visual search ads could be; CEO Ready: "Visual search ads is a new lower funnel format currently in beta" and "we think this is a big and meaningful opportunity."

• Richard Greenfield, LightShed Partners: asked "Why now?" on DSP deals and about UCAN growth slowing; CEO Ready: "there's been an advance of privacy-preserving technologies" and "part of that why now is like we've been testing and learning our way towards this"; VP Andrew Somberg: "Q2 included a few unique onetime benefits" and in Q3 "we did see some softness in food, beverage and alcohol" while "health, inclusive of GLP-1 advertisers" helped offset.

• Eric Sheridan, Goldman Sachs: asked about the duration to close the "ARPU or monetization gap" and about "horizontal agents"; CEO Ready: "there is a meaningful gap for us" internationally and "it's probably a multi-quarter event" for the EU change, while adding, "we think that there will be broad horizontal agents, but there will be opportunities for vertical-specific winners."

• Shweta Khajuria, Wolfe Research: asked about AI bidding optimization tailwinds; CEO Ready: "In Q3, as planned, we extended these integrations to a small number of additional sophisticated advertisers" and cited early testing where an advertiser saw "77% higher new customer ROAS reflected in their proprietary measurement source of truth."

Sentiment Analysis

• Analysts’ tone was slightly negative to neutral, concentrating on the Q3 revenue shortfall and durability of international growth, including timing questions like "when do you think that the initiatives could start to turn international revenues" (Jason Helfstein, Oppenheimer & Co. Inc.) and pressure on causality such as "Why now?" (Richard Greenfield, LightShed Partners).

• Management’s tone was slightly positive but defensive on the revenue miss, with CEO William Ready stating, "Overall, Q3 revenue came in below our range" and emphasizing stabilization and early improvement signals like "that's now stabilized in Q4" and "we're seeing good green shoots with our international sales restructuring."

• Versus last quarter’s more consistently upbeat framing of "Our strong Q2 results" (CEO William Ready, Q2) and "Q2 was a strong quarter" (CFO Julia Donnelly, Q2), the current call repeatedly returned to the EU de minimis impact and a widened Q4 range, while still highlighting product and demand expansion efforts.

Quarter-over-Quarter Comparison

• Management shifted from Q2’s emphasis on broad strength—"delivered revenue growth of 18% globally" (CEO William Ready, Q2)—to Q3’s acknowledgement that "Q3 revenue came in below our range" (CEO Ready, Q3) and detailed attribution of the deceleration.

• Geographic narrative changed from Q2 Europe growth—"In Europe, revenue was $213 million, growing 12%" (CFO Julia Donnelly, Q2)—to Q3 Europe pressure—"In Europe, revenue was $193 million, roughly flat" (CEO Ready, Q3) with "roughly an 11-point drag" from cross-border sellers (CEO Ready, Q3).

• Leadership changed from "Julia Donnelly - CFO" (Q2 participants list) to "James Dibbo, who recently joined as Pinterest's CFO" (VP Andrew Somberg, Q3), with CEO Ready adding, "I want to officially welcome James Dibbo."

• Q2 highlighted program build-out and testing (e.g., "we are continuing to pilot integration" and "expanding testing" in Q3, per CEO Ready in Q2), while Q3 emphasized commercialization steps, including DSP expansion "announced this week" (CEO Ready, Q3) and Assistant moving to "general availability in the U.S." (CEO Ready, Q3).

Risks and Concerns

• "Regulatory changes to the de minimis exemption in Europe" created a larger-than-expected impact, with CEO William Ready stating, "The regulatory impact was greater than we anticipated" and the company expecting the pullback to "continue to weigh on international revenue growth" in Q4.

• The company pointed to execution and transition risk in international go-to-market changes, with CEO Ready noting "some near-term disruption from the transition of our international go-to-market organization" and adding that "many of our new leaders are still ramping up."

• Monetization pressure from pricing was explicit, with CEO Ready stating, "Ad pricing in Q3 declined 4%."

• Cost pressure and AI infrastructure investment continued, with CEO Ready citing cost of revenue drivers including "investments in GPU capacity" and guiding that Q4 cost of revenue is expected to grow "at a low teens rate" sequentially.

Final Takeaway

Pinterest’s management attributed Q3’s revenue coming in below its range to a larger-than-expected advertiser pullback tied to EU de minimis changes and outlined a near-term expectation that the cross-border headwind continues into Q4, prompting a widened revenue guide. At the same time, the company emphasized record user scale, Gen Z engagement, and product and demand expansion efforts—such as Pinterest Assistant reaching general availability in the U.S., new lower-funnel ad formats like visual search ads in beta, and an expanded set of programmatic DSP partnerships—while introducing new CFO James Dibbo and reiterating a focus on improving performance ads, measurement, and international go-to-market execution to support reacceleration over time.

Read the full Earnings Call Transcript

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