Pinterest Inc. saw its shares surge 15.37% to $24.06 in after-hours trading on Monday, following the release of first-quarter earnings that topped revenue estimates and an optimistic sales forecast for the second quarter. The stock had closed regular trading at $20.85 on the New York Stock Exchange before the sharp post-market rally.
The company reported first-quarter revenue of $1.008 billion, an 18% increase year-over-year (or 15% on a constant-currency basis), surpassing analyst expectations. Global monthly active users rose 11% to 631 million, underscoring the platform's continued user growth. Adjusted earnings per share came in at 27 cents, beating the 22-cent consensus from analysts polled by Zacks Investment Research. Under standard U.S. accounting, Pinterest posted a net loss of $73.6 million, or 12 cents per share, reflecting stock-option expenses and restructuring charges.
CEO Bill Ready described the quarter as a 'strong start to 2026' and emphasized the company's push toward an 'AI-powered ads platform.' The upbeat results come as smaller digital ad players seek to prove that brands are maintaining their advertising budgets amid the rapid adoption of AI in ad creation and delivery. Pinterest is working to close the gap with larger platforms like Meta's Instagram and Facebook, while competitors such as Reddit have also highlighted gains from their own AI-ad tools.
Pinterest's second-quarter revenue outlook of $1.133 billion to $1.153 billion, representing 14% to 16% growth, surpassed the LSEG consensus of $1.11 billion. The company also forecast adjusted EBITDA in the range of $256 million to $276 million. Adjusted EBITDA excludes interest, taxes, depreciation, amortization, and other items, providing a different perspective from net income.
The company has been proactive in cost management. In January, Pinterest announced a restructuring that affected fewer than 15% of employees and reduced its office footprint, reallocating resources toward AI-driven roles, new AI features, and an overhauled sales strategy. This move is part of a broader effort to enhance its advertising platform and better compete in the evolving digital ad market.
Activist investors have also taken note. In March, Elliott Associates and Elliott International agreed to purchase $1 billion in 1.75% convertible notes maturing in 2031, which can be converted into stock under certain conditions. Pinterest simultaneously authorized a $3.5 billion share repurchase program and initiated a $1 billion accelerated buyback with Goldman Sachs.
Despite the positive momentum, Pinterest faces significant risks. The company cited potential headwinds from economic softness, inflation, tariffs, foreign exchange volatility, increased competition, challenges in retaining advertisers, tightening privacy regulations, and uncertainties related to AI development and deployment. These factors could affect future performance.
Geographically, revenue per user varies widely. In the U.S. and Canada, average revenue per user was $7.12, compared to $1.17 in Europe and just 20 cents in other regions. This disparity highlights the challenge of monetizing its international user base.
Pinterest shares had fallen 40% over the past six months prior to the earnings report, as investors worried about tariff issues and competition from AI-driven chatbots. The latest results have shifted focus to whether the company's AI-powered ad tools can consistently convert user growth into reliable revenue gains.
