Pinterest, Inc. Class A Common Stock 2026 Q3 Earnings Call

Please go ahead. Good afternoon and thank you for joining us.

Welcome to Pinterest's earnings call for the third quarter ended September 30, 2026. Joining me to discuss our results today is Bill Ready, Pinterest's CEO. James Dibbo, who recently joined as Pinterest CFO, will briefly introduce himself. The statements we make on this call reflect management's view as of today and will include forward-looking statements. Such statements involve a number of assumptions, risks, and uncertainties, and actual results may differ materially. We disclaim any obligation to update these statements. For information about assumptions, risks, uncertainties, and other factors that could affect our results, please refer to our earnings press releases and the periodic reports we file with the SEC and are available on our investor relations website at investor.pinterest.com. During this call, we will present both GAAP and non-GAAP financial measures.

A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release and presentation, which are distributed and available to the public through our investor relations website. Lastly, all growth rates discussed today are on a year-over-year basis unless otherwise specified. Now I'll turn the call over to Bill.

Thanks, Andrew. Good afternoon and thank you for joining our third quarter 2026 earnings call. Before we begin, I want to officially welcome James Dibbo, who joined Pinterest as Chief Financial Officer earlier this week. James joins us from Amazon, where he most recently served as CFO of their ads and media businesses. Before that, he was CFO of Amazon's worldwide consumer business. James brings deep experience from one of the largest and fastest-growing ad platforms in the industry and one of the best shopping experiences in the world. Both are highly relevant to what we are building, and we are thrilled to have him here. Later in the call, James will share a few words and introduce himself. Welcome, James. Before I turn to the specifics of the quarter, I want to take a moment to step back and frame where we are in Pinterest's journey.

Pinterest is where users come in search of something they will love. We have become an increasingly important destination for visual search and shopping, powered by differentiated AI capabilities and built around commercial intent. Unlike platforms built around passive content consumption, Pinterest helps people discover what they love and act on it. At a time when search and consumer expectations are changing rapidly, we continue to win consumer shopping demand at record levels for our platform, including across geographies and generations, and especially with Gen Z. In our core UCAN market, engagement is deepening as searches, boards created, and outbound clicks all grew faster than users in Q3. Users and engagement are the clearest indicators of the strength of a platform, and that gives us conviction in our long-term opportunity. Our focus over the last year has been to translate that strong engagement into more durable monetization.

We are doing that in 2 ways, continuing to improve our performance ads platform and strengthening our go-to-market motion, including new leadership across the organization. Now let me turn to the quarter. In Q3, we delivered our 13th straight quarter of record users and our 12th straight quarter of double-digit user growth. On revenue, we flagged 2 headwinds coming into the quarter affecting our international business, regulatory changes to the de minimis exemption in Europe affecting cross-border sellers, and the restructuring of our international go-to-market organization. The regulatory impact was greater than we anticipated, as it is inherently hard to forecast when changes take effect during the quarter. 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. The impact of our international go-to-market restructuring played out about as we expected and was a smaller contributor.

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. Despite these headwinds, we delivered adjusted EBITDA within the range we expected. This quarter reinforces the importance of the work already underway to build a broader, more durable revenue base. The reinvigoration of our UCAN business provides a clear proof point for the approach we are taking. Last year, changes in the regulatory environment in the U.S. affected large retailers and cross-border sales into the U.S. Despite those headwinds, continued improvements to our performance ads platform and go-to-market execution helped us drive a re-acceleration in UCAN revenue growth. Year to date, UCAN revenue has grown at a mid-teens rate, a clear acceleration from 2025.

We are now applying that same playbook internationally, and we are beginning to see early signs that these changes are taking hold internationally. That gives us confidence that the actions we are taking are right for the long-term health of the business. As we said at the beginning of the year, progress would not always be linear, and we might face some short-term headwinds as we make changes that are right for the long term. 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. With that context, I will start with engagement, which underscores the distinct role Pinterest plays for users. Pinterest has become a destination for search, particularly visual search. Users conduct more than 80 billion searches on Pinterest each month.

The vast majority are visual, and more than half are commercial. This is a different kind of search experience from traditional text-based search. People come to Pinterest with a point of view, but often without the exact words, brand, or product in mind. At the core of this search experience is our approach to agentic discovery. We use AI to proactively bring users relevant ideas, products, and next steps based on their taste and intent. For many people, shopping is not a task to be automated. It is a joyful activity and a pastime. Our AI-assisted experiences are designed to enhance a journey the user wants to engage in rather than take that journey away from them. We use AI trained on our unique data to understand people's preferences and anticipate what might inspire them next. But taste is personal, and the ultimate choice belongs to the individual.

We believe the best AI experiences will expand human choice, not replace it. This is why Pinterest is built for all the wonderful parts of shopping that people do not want to give up, in the same way that people don't seek to automate away their entertainment. Approximately 70% of search journeys on Pinterest begin with a proactive recommendation made by our AI-enabled systems before a user types a word. From there, users explore possibilities, compare options visually, and turn inspiration into action. That experience continues to drive user momentum. Global MAUs grew 10% in Q3. It is resonating particularly well with Gen Z, our fastest-growing cohort. Gen Z now represents 57% of our users and is our most engaged cohort across monthly retention, saves, and sessions. They also come with intent. Two-thirds of Gen Z users say they come to Pinterest to shop.

That intent carries through to monetization, as ARPU for Gen Z users is comparable to millennials and UCAN, which bodes well for ARPU growth as Gen Z begins to enter their peak spending years. What makes our engagement particularly valuable is the intent behind it. As users search, save, and build boards, they reveal evolving tastes and interests that help us anticipate what they want next. This creates a valuable feedback loop. The more people engage, the more relevant and personalized their search experience becomes, giving them more reasons to return. These distinctive signals, built over years, create an increasingly differentiated experience for users and a powerful commercial opportunity for advertisers. Pinterest Intelligence is the foundation that connects our proprietary first-party signals, visual understanding, and purpose-built AI models. With it, we can deliver more personalized discovery for users and better performance for advertisers.

We pair our proprietary data with compact fit-for-purpose models and open-weight models post-trained in our own environment. As I said last quarter, open-weight models can outperform comparably sized closed third-party models for our use cases because we can post-train them on Pinterest's unique data. We are also achieving a cost per transaction at less than 8% of comparable closed proprietary models. Importantly, we are scaling these AI capabilities efficiently and applying them to highly monetizable use cases such as Pinterest Assistant. Pinterest Assistant is now in general availability in the U.S., and we are encouraged by the early signals. While more than half of all searches on Pinterest are commercial, approximately 80% of searches using Pinterest Assistant are commercial in nature.

Within the Assistant, we are building more agentic experiences designed to assist users in their discovery journey rather than automating them out of it, including Ask mode, which is beginning to scale in the U.S. We are also deepening capabilities across our core use cases with products such as Beauty Guides and Restyle. Restyle, which launched in beta in Q3, helps users reimagine a room from a photo by adding a new piece, replacing an existing one, or exploring a different look. It combines Pinterest Intelligence's understanding of style with shoppable products from our catalog, helping users see how an idea could work in their own space. Much of the Restyle experience is currently powered by Pinterest Canvas, our proprietary AI image generation model. The same intelligence that improves the user experience is also helping drive compounding gains for advertisers.