Pinterest, Inc. (PINS) Earnings

Management highlights

### AI Product Innovation for Users - Launched Pinterest Assistant, an AI conversational layer for late-stage user shopping research, rolled out to the vast majority of U.S. users by end of July. The tool is woven into the existing user experience and enables product comparisons, step-by-step planning, and personalized budget-aligned recommendations. - Pinterest Assistant is built on the company's proprietary taste graph (years of user search, save, and board curation signals), with visual-first design and conversational memory for personalized experiences. - The company leverages a mix of purpose-built in-house compact models and post-trained open source models deployed in its secure cloud infrastructure. For Pinterest Assistant, this approach delivers cost per transaction at less than 8% of the cost of comparable closed proprietary third-party models, while delivering superior performance for Pinterest's use cases. ### AI-Powered Advertiser Platform Enhancements - AI-powered Pinterest Performance Plus campaigns deliver meaningfully better ROAS and faster spend growth than non-adopted campaigns. As of Q1 2026, 30% of lower-funnel revenue ran through Performance Plus, with adopters growing spend more than twice as fast as non-adopters. - Launched Smart Assembly, a new automated creative optimization capability for advertisers without existing shopping product catalogs. Early alpha testing found an average 6% improvement in click-through rate. - Business Assistant, a conversational AI tool for advertisers to get actionable platform insights and optimization recommendations, is currently in beta. - Piloting integrations between large advertisers' in-house measurement systems and Pinterest's AI bidding systems to optimize for advertisers' unique desired outcomes; initial pilots have delivered strong performance that contributed to Q2 2026 results, with expansion to additional advertisers planned for Q3. - Updated shopping ad delivery systems improved product selection for large-catalog advertisers and increased relevant product variety for users, driving stronger, more consistent ROAS across large and small advertisers. ### Go-To-Market Transformation - Disciplined, performance-focused sales transformation drove strong Q2 results, particularly in UCAN, with improved seller accountability, clearer commercial packaging, and tighter alignment between product performance and advertiser outreach. - Restructured account coverage teams and realigned incentives to better serve mid-market and managed SMB advertisers. - The successful UCAN go-to-market playbook is being rolled out internationally to close the gap between engagement and revenue, with new international leadership in place to sharpen global strategy and add operational discipline. Third-party demand expansion into Europe is currently in testing. - Pinterest is extending its consumer intent signals to connected TV via TV Scientific, with strong early advertiser reception. Full integration of TV Scientific into Pinterest Performance Plus is planned for 2027, turning Pinterest into a full-funnel search, social, and CTV performance solution. ### User Growth and Trust - The company delivered 12 consecutive quarters of record MAUs and 11 straight quarters of double-digit user growth, with 100% of reported users logged in and 85% accessing Pinterest directly via the mobile app, reducing third-party traffic dependency. - The company remains focused on building a positive platform centered on user trust and youth well-being, with leadership noting that a positive user experience and strong business performance are mutually reinforcing.

Guidance

- Q3 2026 revenue is expected to be in the range of $1.19 billion to $1.21 billion, representing 13% to 15% YoY growth. After adjusting for headwinds from foreign exchange, the shifted Prime Day timing, and non-recurring World Cup-related spend, the high end of the range is consistent with Q2 2026 performance. - Q3 2026 adjusted EBITDA is expected to be in the range of $335 million to $355 million, with non-GAAP cost of revenue expected to be roughly flat sequentially versus Q2 2026 due to accelerated recognition of contractual infrastructure benefits. - Full year 2026 adjusted EBITDA margin guidance was upwardly revised to approximately 30%, from the prior expectation of approximately 29%, driven by first half 2026 revenue outperformance. - The company expects continued modest headwinds to cost of revenue as a percentage of revenue in the second half of 2026, driven by GPU capacity investments and the inclusion of TV Scientific. - Primary YoY investment focus in the second half of 2026 remains sales/marketing and R&D to support AI and product initiatives.

Segment performance

### Geographic Segments: Global MAUs reached 640 million, growing 11% YoY. - **U.S. and Canada (UCAN)**: 106 million MAUs (up 4% YoY); Q2 revenue was $880 million, growing 18% YoY. Revenue contribution to global revenue is ~74.6%, driven by growth in retail, financial services, travel, and health verticals. - **Europe**: 157 million MAUs (up 8% YoY); Q2 revenue was $213 million, growing 12% YoY (7% on constant currency basis). Revenue contribution to global revenue is ~18%, driven by retail growth. - **Rest of World**: 377 million MAUs (up 15% YoY); Q2 revenue was $87 million, growing 38% YoY (32% on constant currency basis). Revenue contribution to global revenue is ~7.4%. ### Overall Financial Performance: Global Q2 2026 revenue was $1.18 billion, growing 18% YoY (17% constant currency). Overall ad impressions grew 16% YoY. Cost of revenue was $245 million (up 25% YoY), driven by TV Scientific acquisition impact and GPU capacity investments. Non-GAAP operating expense was $629 million (up 13% YoY), driven by sales/marketing investments and R&D for AI initiatives. Adjusted EBITDA was $311 million, with a 26% margin (up 130 basis points YoY). Free cash flow was $270 million, with 94% free cash flow conversion on a trailing 12-month basis.

Risks & headwinds

- Q3 2026 faces a modest foreign exchange headwind, after a 1 percentage point tailwind in Q2 2026. - The shift of Prime Day from Q3 2026 to Q2 2026 creates a ~0.5 percentage point headwind for Q3 2026 revenue. - Non-recurring World Cup-related advertising spend that benefited Q2 2026 will not repeat in Q3 2026, creating a ~1 percentage point headwind. - International revenue growth, particularly in Europe, faces ongoing disruption from deliberate go-to-market organizational restructuring, difficult year-over-year comparisons, and regulatory pressure on Asia-based cross-border retailers operating in the region. This disruption is expected to continue into Q3 2026. - Full monetization of Pinterest's existing commercial intent is a multi-year journey, especially internationally, with full realization of go-to-market transformation benefits expected to take multiple quarters. - Widespread adoption of AI-powered ad tools like Pinterest Performance Plus is expected to follow a multi-year adoption curve similar to industry precedent.

Analyst Q&A

• Q: Why is Europe seeing slower growth, and what are the regional growth trends heading into Q3? /

  A: Q2 European growth moderation was expected, resulting from deliberate go-to-market organizational restructuring, difficult year-over-year comparisons against 2025's cross-border spend influx, and ongoing regulatory pressure on Asia-based cross-border retailers that continues into Q3. UCAN growth accelerated to 18% YoY, driven by improved advertiser ROAS, AI optimizations, and one-time benefits from shifted Prime Day and World Cup spend, with strong growth expected to continue. Some disruption to international growth will persist in Q3, which is the most difficult comparison quarter of the year for Europe. (339 characters)

• Q: What early engagement signals have you seen for Pinterest Assistant, and how do you position it against AI competition? /

  A: Pinterest has used AI to personalize content for years, leveraging its unique proprietary taste graph built from hundreds of billions of user curation signals. Pinterest Assistant brings AI to the foreground of the user experience to help users compare products and complete their entire shopping journey on-platform. Management believes search is fragmenting, and there are multiple winners in AI; Pinterest's focus on visual shopping, combined with low-cost efficient open source models post-trained on its unique data, creates a durable competitive advantage. (397 characters)

• Q: How do you manage AI compute and token costs while expanding AI offerings, and what KPIs do you track for productivity gains? /

  A: The upward revised 2026 margin outlook demonstrates the company's ability to invest in AI while improving profitability. The company uses a centralized model routing layer to match tasks to models: higher-cost more capable models for complex work, lower-cost lighter models for routine tasks. Expanding this routing to internal use cases has already increased weekly pull requests per engineer by 45% YoY while maintaining stable incident rates. AI investments are ROI-positive, scaled deliberately, and fully incorporated into existing guidance. (386 characters)

• Q: What is the progress of open source AI adoption for Pinterest, and how does it fit into your broader AI strategy? /

  A: Pinterest takes a model-agnostic approach, using the right model for each task, and open source models deliver substantial advantages for the company. Open source models cost less than 8% of comparable closed models, and post-training them on Pinterest's unique proprietary data makes them more effective than closed alternatives. Running open source models in Pinterest's own secure cloud environment also eliminates data security concerns associated with closed third-party models, making this approach a clear strategic win. (362 characters)

• Q: How is Pinterest Assistant monetized, and when will international go-to-market changes deliver results? /

  A: Pinterest Assistant is woven into Pinterest's existing app experience, so monetization is built in from launch, no separate monetization roadmap is needed. The same UCAN go-to-market strategy that delivered Q2 growth acceleration is being deployed internationally. New international sales leadership is in place, focused on market prioritization, deeper advertiser relationships, and broader demand expansion via third-party testing. Results will take multiple quarters to materialize, but UCAN's performance gives management confidence in the international strategy. (364 characters)