Pinterest’s chief executive Bill Ready told analysts on October 29 that sellers shipping goods into Europe from abroad pulled back their advertising so sharply after the European Union changed its customs rules that the retreat took roughly 11 points off the company’s European revenue growth and about 3 points off its global growth rate, and that he does not expect the money back for the holiday season. The admission came on a call to explain third-quarter revenue of $1.174 billion, up 12% but below the company’s own forecast, and it sharpened a question that has followed Pinterest all year: whether a platform with 661 million monthly users, a 29% adjusted EBITDA margin and $1.26 billion of free cash flow over twelve months can turn its audience into a growing advertising business outside North America.
In Short
Pinterest is still profitable and still adding users, but its ad sales grew more slowly than it promised, mostly because online sellers shipping low-cost goods into Europe cut back their advertising after the rules changed. Most of Pinterest’s money comes from the US and Canada, and on average it now charges 4% less for each ad while showing many more of them. The company says growth will come back over time, but it only expects 8% to 12% growth over the holidays and cannot say when the European money will return.
The call and the miss
Pinterest reported results for the three months ended September 30, 2026 after the market closed on Thursday, October 29, and held its earnings call the same afternoon. The figures and quotes in this article come from a transcript of that call published by Investing.com on October 30. Investing.com says its article was generated with the support of AI and reviewed by an editor.
Revenue was $1.174 billion, up 12% on both a reported and constant currency basis. In August, Pinterest had guided to third-quarter revenue of $1,190 million to $1,210 million, or 13% to 15% growth. Investing.com put analyst consensus at $1.21 billion in revenue and $0.49 in adjusted earnings per share. Pinterest reported $0.46.
Ready did not dress it up. “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,” he said in his prepared remarks.
The market had already been selling. According to Investing.com, Pinterest shares closed the regular session on October 29 at $19.92, down 4.78% from the prior close of $20.92, then fell to $18.26 in after-hours trading, another 8.33% lower. That left the stock about 12.7% below the previous close, and within a 52-week range of $13.84 to $34.12. Investing.com also said the shares had fallen more than 13% over the preceding week.
Six points, explained three ways
Revenue growth fell from 18% in the second quarter to 12% in the third. Ready broke the six-point slowdown into three parts. About three points, he said, came from cross-border sellers cutting their spending after the EU removed its de minimis customs exemption for low-value parcels. The rest was timing and currency. “Approximately two points reflected the timing of Prime Day and World Cup related spend that we called out last quarter. The remaining point reflected foreign exchange, which added one point to Q2 growth and was neutral in Q3.”
The second and third items were flagged in advance. In August, Pinterest said Prime Day’s move into the second quarter gave that quarter a 0.5-point benefit and would create an equivalent headwind in the third, while World Cup spending added nearly a point that would not repeat. Amazon held Prime Day 2026 from June 23 to 26 in the US, after running it entirely in the third quarter in 2025.
The first item was flagged too, but not its size. “The regulatory impact was greater than we anticipated, as it is inherently hard to forecast when changes take effect during the quarter,” Ready said. He added that “the deviation from the forecast was greater in the later weeks of the quarter.”
Is Pinterest short of money?
None of the eight analysts who asked questions raised funding or liquidity. Their questions were about Europe, Pinterest Assistant, programmatic demand, new ad formats, AI agents and bidding. Whether Pinterest can fund itself and whether it can grow at the rate it once did are different questions, and the call answered the first far more clearly than the second.
Adjusted EBITDA was $339 million, a margin of 29%, down 30 basis points from a year earlier and inside the range the company had set. Free cash flow was $300 million in the quarter. Over twelve months, Pinterest has generated “nearly $1.26 billion of free cash flow, representing 90% free cash flow conversion,” according to Ready, who delivered the financial results himself. James Dibbo, the new chief financial officer, had been in the job for four days. The company ended September with $1.5 billion in cash, cash equivalents and marketable securities, and it still expects a full-year adjusted EBITDA margin of about 30%.
Other measures are thinner. According to Pinterest’s quarterly report, filed on October 29, net income fell 77% to $21.5 million, and share-based compensation reached $291.7 million in the quarter, equal to about a quarter of revenue. Adjusted EBITDA excludes that cost.
The balance sheet has also changed shape in 2026, mostly by choice. Cash and marketable securities stood at $2.47 billion at the end of 2025. Since then, according to the quarterly report, Pinterest issued $1 billion of 1.75% convertible notes due in March 2031 to funds managed by Elliott, whose partner Marc Steinberg sits on Pinterest’s board, and spent $2.02 billion on share buybacks in the first nine months. It bought no shares in the third quarter. In October, it replaced its credit line with an undrawn $700 million facility. The decline in cash reflects spending on buybacks and on tvScientific, which closed on February 17 for $465.1 million, while the business itself kept generating cash.
Costs have been cut as well. The restructuring disclosed on January 27 removed about 780 positions, or less than 15% of staff, to shift resources toward AI. Pinterest ended the third quarter with 5,192 employees, “down slightly year-over-year,” and down 4% excluding staff who arrived with tvScientific. “We will continue to invest in specialized talent where we see a clear and compelling ROI,” Ready said.
On the figures disclosed, then, Pinterest is profitable on an adjusted basis, generates cash and carries one block of debt with more than four years to run. The pressure lies elsewhere.
Europe: a rule change and a retreat
The EU ended the duty-free threshold for parcels worth under €150 and replaced it with a flat €3 charge per item from July 1, 2026. The de minimis exemption had allowed low-value goods sold by non-EU platforms to enter without customs duty. Data from Smarter Ecommerce, covering around 500 European Google Shopping advertisers, showed the share of those advertisers facing account-level competition from Temu fell by about half from March, while SHEIN’s presence in Shopping auctions dropped close to zero by late June.
Pinterest named no companies on the call, and the Google Shopping data does not cover Pinterest. Pinterest’s own figures show the scale of the pullback on its platform. Europe revenue was $193 million, “roughly flat on a reported basis or up 1% on a constant currency basis,” according to Ready. “The pullback from cross-border sellers represented roughly an 11-point drag on Europe’s year-over-year growth.” Applied to the region’s revenue, 11 points is roughly $21 million in the quarter, by PPC Land’s calculation. In the second quarter, Europe revenue had grown 12% to $212.7 million.
The warning was on record. In August, Julia Donnelly, then chief financial officer, said Pinterest faced incremental pressure mid-quarter from Asia-based cross-border retailers impacted by regulatory actions, and that the pressure was continuing in the third quarter. What Pinterest misjudged was the depth.
Nowhere left to reroute
Ready offered an explanation that goes beyond Europe. “When tariffs went into effect in the U.S., many rerouted their spend into Europe and LATAM. Now there are barriers in both the U.S. and Europe, and there are fewer large markets to reroute to. In the short term, we are seeing these advertisers pull back globally to protect margins, but we do expect these sellers to adapt over time.”
Pinterest has been through this once. In the third quarter of 2025, its US and Canada revenue grew 9% as larger retailers navigated tariff-related margin pressure, and Asia-based e-commerce spend in the US declined year over year. That episode is also the subject of a securities class action filed on March 30, 2026 in the Northern District of California, which alleges that Ready and Donnelly misled investors about the platform’s ability to withstand tariff pressure. The allegations have not been proven, and the case did not come up on the call.
How long will the European retreat last? Ready could not say. “We cannot perfectly predict how this plays out with the European de minimis exemption change, but it is probably a multi-quarter event,” he said, pointing to retailers that “have talked about their plans to leverage local warehouses.” He was explicit about the holidays: “we do not expect cross-border spend to come back for the holiday.”
The business underneath
Pinterest’s case for a recovery rests on what happens to European advertisers that are not cross-border sellers. Ready offered one data point and no absolute numbers. “The growth rate in our core European enterprise business, which excludes cross-border sellers, that growth rate halved in Q3 relative to Q2. But quarter to date in Q4, we have since re-accelerated that growth rate above its Q2 level.”
That is the strongest piece of evidence on the call for the turnaround thesis, and it cannot be checked. Pinterest did not give the growth rates, the size of that business or the number of weeks behind the quarter-to-date figure.
The European sales organisation is also mid-rebuild. “In our international regions, we started this process more recently, and more changes were required across multiple markets,” Ready said. “Overall, while the toughest parts of our personnel changes are behind us, many of our new leaders are still ramping up.” Jason Helfstein of Oppenheimer asked when those initiatives “could start to turn international revenues.” John Blackledge of TD Cowen asked about a return to growth in Europe next year. Neither received a date.
More ads, cheaper ads
The line that matters most to advertisers came near the end of Ready’s financial remarks. “In Q3, overall ad impressions grew 17%. Ad pricing in Q3 declined 4% as ad impressions growth outpaced revenue growth.”
That explanation is arithmetic, not cause. When a platform shows more ads and revenue grows more slowly than volume, the average price falls by definition. The call did not say where the extra impressions were served, nor how the decline split between ads sold per click and per thousand impressions. Ready said growth came from Pinterest’s consideration objective, “particularly our performance-driven CPC advertisers,” and to a lesser extent from awareness campaigns.
The direction has turned. In the second quarter, Pinterest served 16% more ads at prices 1% higher. A year earlier, in the third quarter of 2025, impressions rose 54% while pricing fell 24%, a decline the company then attributed to more ads in cheaper international markets. The latest drop is much smaller, and the call did not say whether the same geographic mix is behind it.
The largest social platform moved the other way. At Meta, third-quarter ad impressions rose 10% while the average price per ad rose 14%, and Meta’s ad revenue grew 26% to $63.06 billion. A platform that raises prices without losing volume shows pricing power. Pinterest is adding volume and giving up price.
Does that mean demand is thin? Ready, discussing the new partnerships with outside buyers, said Pinterest’s goal so far had been “to complement our first-party business with more sources of demand to round out gaps in our auction.” The phrase is an acknowledgement that the auction has gaps. It does not say where they are or how large.
One region pays the bills
Pinterest’s US and Canada business generated $894 million, up 14%, from 107 million monthly users, up 4%. That is 76% of revenue from 16% of users, by PPC Land’s calculation. Europe, with 161 million users growing 7%, produced 16% of revenue. Rest of World, with 394 million users growing 13%, produced $87 million, up 24% reported and 21% in constant currency.
According to Pinterest’s results release, average revenue per user (ARPU) in the quarter was $8.38 in the US and Canada, $1.21 in Europe and $0.23 in Rest of World. The user growth that management highlights is concentrated where each user is worth least.
Ready acknowledged the gap when Eric Sheridan of Goldman Sachs asked how long it would take to close it. “If you look at the ratio of ARPU in Europe or international relative to our U.S. business, there is a meaningful gap for us on that,” he said. “When you look at how low the ARPU is in the relative positioning of that ARPU, or the ratio of that to the U.S. and what that ratio would be on other platforms, it says there is a lot of upside in us addressing that ARPU internationally.” The upside argument and the risk argument describe the same number.
The home market slowed too
Rich Greenfield of LightShed Partners pointed out that investors had been encouraged when US and Canada growth rose “from lower teens up into the higher teens,” and that it had “slowed back down towards that 14% this quarter.” The region grew 18% in the second quarter.
Andrew Somberg, Pinterest’s vice president of investor relations and treasury, attributed the second quarter’s strength to one-time items, the World Cup and Prime Day, and pointed to a new weak spot. “In Q3, we did see some softness in food, beverage, and alcohol, which resulted in about a point of sequential pressure in UCAN.” Health advertising, “inclusive of GLP-1 advertisers,” was growing. Ready said US and Canada revenue was up 15% so far in 2026, “a meaningful acceleration from 2025.”
Engagement in the region, according to Ready, is deepening, with “searches, boards created, and outbound clicks all growing faster than users.” No growth rates were given.
Gen Z and the long view
Pinterest leans on its younger users as evidence of durability. Gen Z makes up 57% of its users and is the company’s “most engaged cohort across monthly retention, saves, and sessions,” according to Ready, who added that two-thirds of Gen Z users say they come to Pinterest to shop and that their ARPU is comparable to that of millennials. No ARPU figure by age group was disclosed. The new chief financial officer framed the same audience in social terms. “At a moment when a growing number of people are actively trying to limit their use of social media, and as the father of two daughters, I believe Pinterest’s focus on positivity and inspiration is especially timely and important, as well as a significant business opportunity,” said James Dibbo, who joined from Amazon on Monday, October 26.
The holiday guide: a floor and a run rate
For the fourth quarter, Pinterest guided to revenue of $1.425 billion to $1.475 billion, growth of 8% to 12%, and adjusted EBITDA of $538 million to $588 million. It expects foreign exchange to be “a modest headwind.”
Two statements on the call need to be read together. Ready said that “based on our quarter to date results, Q4 is tracking broadly in line with the growth that we saw in Q3.” He also described the range as “a prudent baseline that we feel highly confident we can meet or exceed.” Applying 12% growth to fourth-quarter 2025 revenue of $1,319.3 million gives about $1,478 million, just above the top of the range, by PPC Land’s calculation. The guidance, in other words, leaves room for growth to fall four points below the current run rate.
“To be prudent, we have widened our Q4 revenue guidance range to reflect the broader range of potential outcomes we see for the quarter,” Ready said. A year ago, Pinterest had guided the fourth quarter of 2025 to 14% to 16% growth.
The holiday quarter carries the most weight in Pinterest’s year. In 2025, it produced $541.5 million of the company’s $1.27 billion in adjusted EBITDA, according to its results releases. The low end of this year’s fourth-quarter EBITDA range sits below that figure.
Beyond December, Pinterest offered direction rather than numbers. “As we look into next year, again, we do not guide beyond the quarter, but as we look into next year, we expect that we will manage to re-accelerate that just as we did in the U.S.,” Ready said. In his prepared remarks he set a longer target: “The work we are doing now positions Pinterest to re-accelerate growth over time and return to the mid to high teens revenue growth we have delivered historically.”
Costs: GPUs and an infrastructure contract
Non-GAAP cost of revenue rose 21% to $250 million, which Ready attributed to “increased infrastructure spend related to our user and engagement growth and investments in GPU capacity, as well as the impact of tvScientific.” Non-GAAP operating expenses rose 9% to $591 million, driven by sales and marketing and by research and development for AI.
The third quarter flattered that cost line. “Q3 2026 non-GAAP cost of revenue benefited from the accelerated recognition of certain contractual benefits associated with our recently executed multi-year infrastructure agreement,” Ready said. Pinterest disclosed in June a planned $4 billion commitment to Amazon Web Services through 2031. For the fourth quarter, Pinterest expects non-GAAP cost of revenue to grow sequentially “at a low teens rate, partially driven by our investment in GPU capacity.”
Pinterest’s answer to rising AI costs is to avoid renting the most expensive models. “We pair our proprietary data with compact fit-for-purpose models and open-weight models post-trained in our own environment,” Ready said. “We are also achieving a cost per transaction at less than 8% of comparable closed proprietary models.” The comparison was not detailed further.
AI agents: threat or shelter?
A competitive question facing shopping platforms this year is whether general-purpose AI assistants will take the first step of a purchase away from them. Sheridan asked it directly, about “horizontal agents,” and about “the friction points that have to be solved for.”
Ready answered with an analogy from search. “While there were a few winners on horizontal search, there were many winners on more verticalized search experiences. Think about how many product searches would start on an Amazon versus on a horizontal search platform. How many travel searches would start on a Booking or Expedia versus a horizontal search platform.” He then made the call’s most consequential claim about competition: “We have not seen any impact in our UCAN engagement since the launch of some of those popular consumer agentic experiences because those tend to be more horizontal and users are coming to us for a specific purpose around shopping.”
No engagement data accompanied the statement. The supporting evidence Ready cited was research “conducted by YouGov on behalf of Pinterest,” which found that “more than 8 in 10 Americans say they’d miss something about shopping if AI did it for them.” Sample size, dates and question wording were not given. “Users are happy to automate away drudgery. They don’t want to automate away their joy,” Ready said.
Outside evidence on whether shoppers hand purchases to AI is mixed. In March, Walmart said that conversion for products sold directly inside ChatGPT was three times lower than for products that sent shoppers to its own website. That suggests friction in agent-led buying. It does not show where product discovery starts. Meanwhile, the largest horizontal player is adding ads to its AI search surfaces: Alphabet’s advertising revenue rose 10.5% to about $82 billion in the third quarter, and its AI Mode ads went to 10 more markets.
Pinterest’s own product is moving toward agentic AI on its own terms. Users run more than 80 billion searches a month, the “vast majority” visual and more than half commercial, according to Ready, and “approximately 70% of search journeys on Pinterest begin with a proactive recommendation made by our AI-enabled systems before a user types a word.” Pinterest Assistant is now generally available in the US, and about 80% of searches through it are commercial. Ask mode, which handles multi-step requests such as planning a trip, “is now available to millions of users in the U.S.” In June, the company had also introduced an experimental Ask Pinterest shopping app and a Pinterest MCP server for agencies. None of these products came with revenue figures.
New demand: DSPs, search placements and app installs
Diversifying demand is the other half of the recovery plan. On October 26, Pinterest made its inventory available through outside demand-side platforms, including Amazon DVA+, Google’s Display & Video 360 and Yahoo DSP, in North America, South America and Asia Pacific but not Europe. On the call, Ready said the partners “represent two-thirds of the DSP market,” with Magnite as the supply-side partner.
Greenfield asked the obvious question. “Why now? Obviously you could have done this last quarter or last year, Bill.” Ready credited lessons from bringing third-party demand onto Pinterest, from the tvScientific acquisition and from “the advance of privacy-preserving technologies.” He also cautioned: “this demand takes time to tune and ramp, as you’ve seen with prior programmatic partnerships.” Pinterest agreed to buy tvScientific, a connected TV performance advertising platform, in December 2025.
Amazon now touches Pinterest’s business at several points. It is the company’s cloud supplier under the $4 billion commitment, one of its new programmatic buying routes through DVA+, the former employer of its new finance chief and, in Ready’s own analogy, the example of a vertical search winner for product queries.
Two new ad formats are in beta. Visual Search Ads, which debuted at Pinterest Presents in September, appear “at the top of those visual search results and on Pin close-ups where users are looking at what they want to buy,” Ready said. Advertisers can use existing catalogs and keyword targeting. Lloyd Walmsley of Mizuho asked how incremental the format could be; Ready called it “a big and meaningful opportunity” without sizing it. Pinterest previously launched Top of Search ads in September 2025, which placed ads within the top ten search results. The second format is an app install objective, in beta with qualified advertisers globally. “Pinterest has not historically been a meaningful participant in mobile app advertising, and this opens an important new budget pool,” Ready said.
Bidding and measurement
Pinterest is also connecting its bidding to advertisers’ own measurement. Shweta Khajuria of Wolfe Research asked how the AI bidding changes deployed in the first half had progressed. Ready said that in the third quarter “as planned, we extended these integrations to a small number of additional sophisticated advertisers,” and cited one result: in early testing, “a leading e-commerce platform” saw “77% higher new customer ROAS reflected in their proprietary measurement source of truth.” The advertiser was not named, and no baseline or test period was given.
Ready linked the effort to a wider shift. “The industry is moving beyond last-click attribution, which is ultimately good for a platform like Pinterest,” he said. Pinterest’s automated campaign suite, Performance+, now lets advertisers add keywords and interests and prioritise product groups. In the first quarter, Pinterest said about 30% of its lower-funnel revenue ran through Performance+ campaigns. No updated share was given on the call.
What the call does not establish
The call supports several conclusions and leaves others open. It shows a company that is profitable on an adjusted basis, generating cash, adding users in every region and growing revenue at 12%. It also shows a company that missed its own forecast, is charging less per ad, depends on one region for three quarters of its revenue and cannot say when a lost group of advertisers will return.
Several things the call does not establish:
- Revenue from the new bets. Visual Search Ads, app installs, Pinterest Assistant, the DSP partnerships and tvScientific came with no revenue figures.
- The European turnaround. The re-acceleration in the core European business was described in relative terms only, over part of a quarter.
- Immunity from AI agents. The claim of no impact on US engagement came without data. The only research cited was commissioned by Pinterest.
- The cause of the price decline. No split by region, buying model or placement was given.
- The 2027 trajectory. Pinterest does not guide beyond the current quarter, and Ready’s re-acceleration target carries no date.
- The market’s verdict. The share price figures cover one session and one after-hours window.
Why this matters for marketers
For advertisers, the quarter brought lower average ad prices and more ways to buy, including through Amazon and Google DSPs, though not in Europe. Cross-border sellers that rerouted spending to Europe and Latin America after US tariffs took effect now face barriers in both the US and Europe, according to Ready, and he does not expect their holiday budgets back. And for the market, Pinterest’s 12% sits between larger and smaller rivals: Amazon’s ad revenue grew 11% to $19.64 billion in the quarter, Alphabet’s 10.5%, Meta’s 26% and Reddit’s 54% to $847 million.
The figures disclosed show a company that generates cash. Whether it can grow at the mid to high teens rate its chief executive says it has delivered before depends on closing a revenue-per-user gap of nearly sevenfold between North America and Europe, on demand from outside buyers that management says takes time to ramp, and on shoppers continuing to start their searches on Pinterest as AI assistants spread. None of those has a date attached.
Timeline
- November 4, 2025 – Pinterest reports third-quarter 2025 revenue of $1.049 billion, with US and Canada growth slowing to 9% under tariff pressure, ad impressions up 54% and pricing down 24%
- December 2025 – Pinterest agrees to acquire tvScientific
- January 27, 2026 – Pinterest discloses a restructuring affecting less than 15% of staff, about 780 positions
- March 30, 2026 – Securities class action filed against Pinterest, Ready and Donnelly over tariff disclosures
- May 2026 – Pinterest reports first-quarter revenue up 18%, with about 30% of lower-funnel revenue through Performance+
- June 2026 – Pinterest discloses a planned $4 billion AWS commitment through 2031
- June 17, 2026 – Pinterest introduces an MCP server in alpha and the experimental Ask Pinterest app
- June 23-26, 2026 – Amazon Prime Day runs in the second quarter in the US
- July 1, 2026 – EU replaces the €150 duty-free threshold with a €3 per-item charge
- August 4, 2026 – Pinterest reports 18% second-quarter growth, guides the third quarter to 13% to 15% and warns of cross-border pressure in Europe
- September 2026 – Visual Search Ads debut at Pinterest Presents
- October 21, 2026 – Meta reports third-quarter ad revenue up 26%, with price per ad up 14%
- October 26, 2026 – James Dibbo joins as chief financial officer; Pinterest opens Programmatic Deals to outside DSPs in three regions, not Europe
- October 28, 2026 – Alphabet reports advertising revenue up 10.5%
- October 29, 2026 – Pinterest reports third-quarter revenue of $1.174 billion, up 12%, below its range; on the earnings call, Ready attributes about 3 points of slowdown to cross-border sellers and guides the fourth quarter to 8% to 12% growth
Summary
Who: Pinterest, its chief executive Bill Ready, new chief financial officer James Dibbo and head of investor relations Andrew Somberg, questioned by analysts from Oppenheimer, TD Cowen, Baird, KeyBanc, Mizuho, LightShed Partners, Goldman Sachs and Wolfe Research. Advertisers, especially cross-border sellers and the Amazon and Google DSP buyers now able to reach Pinterest inventory, are directly affected.
What: Pinterest’s third-quarter 2026 revenue of $1.174 billion, up 12%, fell below its own forecast. On the earnings call, Ready attributed about 3 points of the slowdown to cross-border sellers retreating after the EU’s de minimis change, an 11-point drag on European growth, and said that spending will not return for the holidays. Ad prices fell 4% as impressions rose 17%, and fourth-quarter guidance is 8% to 12% growth.
When: The results and call were on October 29, 2026. Investing.com published the transcript on October 30, 2026.
Where: The pressure is concentrated in Europe, where revenue was flat at $193 million. The US and Canada, with 14% growth, produced 76% of revenue, and Rest of World grew 24%.
Why: The call matters because it tests whether Pinterest can turn record user numbers into durable revenue growth. The company generates cash and is profitable on an adjusted basis, but it depends heavily on one region, is charging less per ad, has offered no data on how general-purpose AI assistants affect its traffic and has not attached revenue figures or dates to the products and partnerships meant to restore mid to high teens growth.
Source: ppc.land
