Pinterest Inc. saw its shares leap 15% in after-hours trading on Monday after the company issued a second-quarter revenue forecast that surpassed analyst projections, underscoring its efforts to convert a growing user base into consistent advertising revenue. The San Francisco-based visual discovery platform projected revenue between $1.133 billion and $1.153 billion for the quarter ending June 30, representing year-over-year growth of 14% to 16%. Analysts surveyed by LSEG had expected around $1.11 billion.
First-quarter results released alongside the guidance showed revenue climbing 18% to $1.008 billion, fueled by a record 631 million monthly active users globally—an 11% increase from the prior year. Despite the top-line growth, Pinterest posted a GAAP net loss of $74 million. Adjusted EBITDA came in at $207 million, while free cash flow reached $312 million, highlighting the company's operational discipline even as it invests heavily in artificial intelligence.
AI-Powered Ad Tools Drive Performance
Chief Executive Bill Ready emphasized Pinterest's position as a discovery and shopping hub, noting that "online discovery leads to real-world action." During the earnings call, Ready revealed that Pinterest processes over 80 billion searches each month, with roughly half tied to shopping or product discovery. The company's AI-driven advertising platform, Performance+, has become a key growth engine, now accounting for approximately 30% of lower-funnel revenue—ads targeting users close to making a purchase. Advertisers adopting Performance+ campaigns have increased their spending nearly twice as fast as those that have not, Ready said.
This focus on AI comes as digital advertisers shift more budget toward automated platforms that promise measurable returns. Tariffs have added cost pressure on larger retailers, making them more cautious, but Pinterest has leaned into the small and mid-sized business segment to diversify its revenue streams. "Large advertisers remain important for stability but are not the primary growth driver," noted Lenny Zéphirin, principal and analyst at The Zéphirin Group. He added that demand from small and mid-sized businesses is picking up, though these firms remain vulnerable to tariff-related disruptions and economic fluctuations.
Competitive Landscape and Expansion
Pinterest still trails Meta Platforms Inc.'s Instagram and Facebook in digital ad market share, while Reddit has been rolling out its own AI-driven ad tools. However, Pinterest differentiates itself by selling advertisers on visual intent and clear shopping signals. The company is also expanding beyond its core platform. In February, it completed the acquisition of tvScientific, and last week launched tvScientific by Pinterest—a connected-TV product that allows advertisers to reach Pinterest audiences on streaming television inventory.
On the capital allocation front, Pinterest retired 26.2 million Class A shares through open-market repurchases in the first quarter. An additional 41.3 million shares were bought via an accelerated share repurchase agreement, and after settling that deal in April, the company retired another 13.5 million shares. The March 2026 buyback program still has $2 billion remaining, providing a cushion for shareholder returns.
Headwinds and Cost Pressures
Chief Financial Officer Julia Donnelly cautioned that major retailers continue to weigh on results, though there was slight improvement late in the quarter. Tariff-related margin pressure persists for that segment. Donnelly also flagged a modest negative impact from the Middle East conflict in specific regions and verticals exposed to rising oil prices.
Costs remain a focus. In its latest quarterly filing, Pinterest disclosed a new private pricing addendum with Amazon Web Services signed in May, locking in a minimum $4 billion cloud spending commitment through May 2031. While the deal bolsters the company's AI capabilities, it also tightens financial flexibility—any slowdown in ad growth would leave less margin for error.
Pinterest's adjusted EBITDA for the second quarter is expected to land between $256 million and $276 million. The company's ability to sustain its momentum will depend on how effectively it can convert user engagement into ad dollars amid a competitive landscape and macroeconomic uncertainties.
