Good day, ladies and gentlemen. Thank you for joining today's Pinterest Third Quarter 2025 Earnings Conference Call. My name is Tia, I will be your moderator for today's call. All lines will be muted during the presentation portion of the call. I would now like to pass the call over to your host, Andrew Somberg, Vice President of Investor Relations and Treasury. Please proceed.

Good afternoon, and thank you for joining us. Welcome to Pinterest earnings call for the third quarter ended September 30, 2025. My name is Andrew Somberg, and I'm Vice President of Investor Relations and Treasury for Pinterest. Joining me on today's call are Bill Ready, Pinterest CEO, and Julia Donnelly, our CFO. This conference call is being webcast, and we are also providing a slide presentation to accompany our commentary. Please refer to our Investor Relations website at investor.pinterest.com to find today's presentation, webcast, and earnings press release. Some of the statements that we make today regarding our performance, operations, and outlook may be considered forward-looking, and such statements involve a number of assumptions, risks, and uncertainties that could cause actual results to differ materially. In addition, our results, trends, and outlook for Q4 2025 and beyond are preliminary and are not an assurance of future performance. We are making these forward-looking statements based on information available to us as of today, and we expressly disclaim any duty or obligation to update them later unless required by law. For more information about assumptions, risks, uncertainties, and other factors that could affect our results, please refer to our most recent Form 10-Q and Form 10-Ks each filed with the SEC and available on our Investor Relations website. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP measures to the most directly comparable 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 in today's prepared remarks should be considered year over year unless otherwise specified. And I'll now turn the call over to Bill.

Thanks, Andrew. Good afternoon, and thank you for joining our third quarter 2025 earnings call. Q3 marks another quarter of strong execution against our multiyear strategy and long-term financial targets. Over the past few years, we've transformed Pinterest from a platform of window shopping, where users often found that all the stores were closed, into an AI-powered visual-first shopping assistant. We are digitally replicating the joyful experiences of walking the bazaar or working with a great salesperson at your favorite boutique while seamlessly enabling our users to take action. In an evolving competitive environment, Pinterest continues to distinguish itself as a destination for our users and a vital partner for our advertisers. To illustrate this point, nearly 85% of our users come directly to our mobile app, meaning we're not reliant on search engines or other third parties for traffic. We reached 600 million monthly active users in Q3.

Marking our ninth straight quarter of record high users with particular strength in Gen Z. Gen Z is our largest, fastest-growing cohort, comprising over 50% of our user base and represents the next generation of users and shoppers who are influential tastemakers, content creators, and a lucrative audience for advertisers to reach. This momentum is also evident in key markets, with our U.S. and Canada MAUs reaching 103 million, the highest level on our platform in the last 4.5 years. Importantly, 100% of our reported users are logged in, giving us valuable first-party intent signals that provide an unparalleled view into consumer tastes and preferences, which powers our recommendation engine and creates an even better user shopping experience. This combination of scale and intent continues to fuel our financial performance, with Q3 revenue growing 17% year over year to $1.049 billion, proving our role as a trusted partner to brands and agencies across the world. Not only has our platform become a destination for shopping, but we've also increasingly become a destination for search, in particular, visual search. Today, there are approximately 80 billion monthly queries across Pinterest, split across related items and other forms of visual search, and traditional text-based searches. In Q3, all of these individual query types grew year over year on the platform. Overall queries per user also grew year over year, as we deepen engagement per user and users search more often on Pinterest. Related items and other forms of visual search are by far the largest source of queries, and on our latest visual search features in particular, queries grew the fastest. These trends help to highlight how our AI investments are elevating our visual search capabilities and the relevance of our shopping recommendations. As a result, we are driving more of our engagement…

This upgraded feature allows users to refine searches with more precision than ever by using both image and text inputs. Powering this experience is a proprietary in-house multimodal model trained on Pinterest's vast and unique dataset, which is 30% more effective at identifying and recommending relevant content from our corpus compared to leading off-the-shelf models. Now we're testing ways to expand multimodal search and bring AI to the foreground of the user experience with the launch of our new Pinterest Assistant. With Pinterest Assistant, we are fundamentally enhancing the discovery journey on Pinterest by transforming pure text-based search into a voice-activated conversational assistant. Now users can move beyond simple keyword text inputs to describing open-ended, complex questions and commands like, "What outfits might match this theme?" and "Make these home decor ideas brighter with a modern layout." Our AI technology surfaces real-time inspiration that takes these conversational descriptors, runs them through our AI, fine-tuned with our first-party signal, and surfaces shoppable products from our catalog. Additionally, by translating natural language queries into curated visual results, we are also able to capture more nuanced commercial intent, providing us valuable signals to drive further personalized recommendations. We just began a beta rollout of Pinterest Assistant to a small set of test users in the U.S. We're excited about the opportunities that multimodal search can unlock, and we'll continue to test this product over the coming quarters, seek user feedback, and expand access to a broader set of users over time. AI is also being integrated to help move users through their commercial journeys in ways that are unique to Pinterest. A recent example is with boards. As I discussed in past quarters, boards are at the heart of a user's inspiration-to-action journey and a superpower of our platform. Hundreds of millions of…

Globally,

22% of our lower funnel retail revenue now flows through ROAS bidding. And notably, as we drive adoption, we're increasingly seeing advertisers place bids against a greater portion of their catalog. In Q3, the number of unique shopping SKUs with a paid ad impression grew more than 100% year over year, and advertisers using ROAS bidding contributed the entirety of that growth. Lastly, we continue to enhance our Pinterest Performance Plus suite and be responsive to advertiser feedback. As an example, advertisers have requested additional transparency regarding the audiences their Performance Plus campaigns are reaching, to supplement the performance metrics they already receive. As a result, we recently launched enhanced new reporting functionality in Ads Manager, offering detailed audience breakdowns, including age, gender, and approximate location. In short, just over a year since launching Pinterest Performance Plus, I am proud of the value we've delivered for advertisers with meaningful opportunities still ahead of us. Now I'll turn to our international opportunity. International monetization represents one of our largest, most durable growth vectors, and we're still in the very early innings. Today, we have roughly 500 million MAUs outside of UCan, or 83% of our global users, evidence of our strong global awareness and product market fit with our users. However, these users represented just 25% of global revenue in Q3 2025, reflecting our historical monetization focus on UCan. While we continue to see opportunities to drive growth in UCan, this imbalance creates the upside we're now beginning to unlock as we scale proven playbooks across our Europe and Rest of World regions and integrate more deeply with the advertising ecosystem in each of these regions. Our go-to-market approach is region-specific. In Europe, we lead primarily with our first-party sales team to serve advertisers directly. We're also focused on strengthening our…

Thanks, Bill, and good afternoon, everyone. Today, I'll be discussing our third quarter 2025 financial results and provide an update on our preliminary fourth quarter 2025 outlook. All financial metrics for revenue will be discussed in non-GAAP terms unless otherwise specified, and all comparisons will be discussed on a year-over-year basis unless otherwise noted. Now let's start with our third quarter results. We ended the quarter with 600 million global monthly active users, or MAUs, growing 12%, our ninth consecutive quarter of record high users. We continue to demonstrate user growth across all of our geographic regions. In Q3, our U.S. and Canada region had 103 million MAUs, growing 4%. Our Europe region had 150 million MAUs, growing 8%. And in the rest of world markets, had 347 million MAUs, growing 16%. Shifting to revenue. In Q3, our global revenue was $1.049 billion, up 17% on a reported basis and 16% on a constant currency basis. We saw strength across our conversion and awareness objectives. Across verticals, we continue to see strength led by retail, as well as by smaller, faster-growing categories on our platform, including telecom and entertainment. We also continue to see a normalization within CPG, driven largely by our food and beverage sub-vertical. Turning to our geographical breakouts for Q3. In the U.S. and Canada, we generated $786 million in revenue, growing 9%. Strength came from retail, CPG, telecom, and entertainment. In Europe, revenue was $193 million, growing 41% on a reported basis or 34% on a constant currency basis. Strength in Europe was driven by retail. Revenue from Rest of World was $70 million, growing 66% on a reported basis or 65% on a constant currency basis. We're pleased to deliver the strong 17% third-quarter revenue growth, which exemplifies our multiple ways to win that I've…

Thanks, Julia. I want to thank our teams at Pinterest, our advertising partners, and all the people that come to Pinterest to find inspiration and take action. And with that, we can open the call up for questions.

We will now begin the Q&A session. If you have a question, please press *1 on your telephone keypad.

The first question comes from the line of Ron Josey with Citigroup. Please proceed.

Thanks for taking the question. Bill, a bigger picture question for you and then Julia, I had one for you. Just on the future of e-commerce, I'd love to get your thoughts on agentic commerce, agent search, and how everything is evolving here. And specifically Pinterest's opportunity and strategy given its evolving landscape and then clearly with the launch of Pinterest Assistant. And then Julia, I think you mentioned some pockets of growth in UCan given tariffs. Wondering if this continued or if things have normalized since then? Thank you.

Thanks for the question, Ron. So one of the things I'm most proud of when I look at our results, particularly over the last three years, is the strength that we have had with users. Nine straight quarters of record high users. And the fact that shopping has been at the very center of the resurgence of our platform, the core of that is that we've effectively become an AI-driven shopping assistant, as I discussed in my prepared remarks. And to go a little further on that, related to your question on agentic, Pinterest is proactive. It anticipates what users love without the user having to ask. Effectively, that is the promise of agentic. The AI is working for you without you having to tell it what to go do. And that's exactly what users experience on Pinterest every day and what is leading to that deep engagement that we understand their style and taste and preferences so well that every time they open the app, they're getting great new recommendations from our AI-driven systems. And we're making those more and more helpful. As evidenced by the Pinterest Assistant that we just announced. You know, we're clearly not standing still. We're going to continue advancing that and we're going to continue to be centered on our strength in a visual-first experience. But adding voice, bringing more of the AI to the foreground, we think will take us further into that AI-driven journey for the user. And our focus, to be clear, is in guiding the user through the decision-making journey. We believe that is the most impactful part of the promise of agentic. From a buying perspective, we deliver great buying experiences for our users. For example, we have push-button buying with Amazon-linked accounts. That's a great experience. We have…

Then, Ron, the second part of your question, I'd say overall with respect to Q3, the quarter played out largely as we expected. In addition, we saw some of the pullback from some U.S. retailers' spend from Asia-based e-commerce players in the U.S. was down year over year again, though relative to Q2, did see a partial recovery there. As we think about guidance for Q4, our Q4 guidance range is one point lower than our guidance range was for Q3. As we see these broader trends and market uncertainty continuing, with the addition of a new tariff in Q4 impacting the home furnishings category. So I think overall, we still feel really good about our mid to high teens revenue growth targets over the medium and long term and the durability of our revenue growth. There are several areas of momentum in our UCan business that continue, that you've seen over the last several quarters. So one of those has been momentum in emerging verticals, also momentum in smaller and mid-market advertisers, and then some of the international opportunity that Bill touched on in his prepared remarks. To put this into perspective, some of these emerging verticals in the U.S., like financial services, is nearly a $40 billion digital ad category in the U.S. We estimate that we have less than 0.5% of market share there, and that category has been growing really nicely for us for some time. We expect this to translate into further share gains in this and other emerging verticals like travel, entertainment, and telecom. Likewise, smaller and mid-market advertisers today represent only 15% of our revenue as our priority has been to solve the needs of larger enterprise advertisers first. But we're seeing nice tailwinds as these smaller and mid-market advertisers adopt Performance Plus campaigns, and we plan to continue to invest more into growing this segment. So all these initiatives continue to play out over time, and we expect them to take time to play out, we're confident we have the right playbook to drive further growth, including in UCan moving forward.

Thank you.

The next question comes from the line of Eric Sheridan with Goldman Sachs. Please proceed.

Thanks so much for taking the question. Maybe building on that answer, just Bill, can you characterize more broadly the digital ad environment that you find yourself operating in representing Q3 and what you just reported and sort of the building blocks of Q4?

Thanks, Eric. We're pleased with another strong quarter in Q3 at 17% revenue growth. And as I'm sure you've noted, we've been quite consistent in our growth and in line with the long-term targets for revenue and margin that we laid out at our Investor Day two years ago. So we continue to feel good about that mid- to high-teens revenue growth target over the long term that we laid out at Investor Day and our ability to deliver. It's also really important to note, and this gets to your question on the broader environment, also important to note that we grew 17% despite operating in an environment where some of our largest retailers in UCan pulled back spend across the industry, not specific to us, but pulled back across the industry as they navigated tariff-related margin pressure. And we think that's disproportionately impacting large retailers. But that is a segment that we have more exposure to than other platforms given our focus on shopping, though we continue to grow in other verticals and segments of the market in addition to those. Additionally, as advertisers are adopting AI-driven platforms, there's a next level of optimization in the AI ad platforms that's taking place right now. We're bidding is getting further aligned to advertisers' measurement sources of truth. And more events that lead up to a conversion are being incorporated. We think that presents an upside opportunity moving forward. We began that journey earlier this year with ROAS-based bidding, and we've seen good results there. For example, after launching ROAS bidding in Q1, we saw a 100% increase in shopping SKUs with paid ad impressions across the platform in Q3. And as driven entirely by ROAS bidding adopters as I noted in my remarks. And more of those advertisers are uploading…

Thank you.

The next question comes from the line of Rich Greenfield with LightShed Partners. Please proceed.

Thanks for taking the question. Seen that's allowing users to actually remove AI content. I guess the big question is how do you know what's AI-generated, what's not, and why did you make that decision? It seems like a lot of your peers are actually encouraging and want AI content because they want more content to keep people even more engaged, sell more ads, or to build the business. And so it seems like you're sort of doing the opposite. And I'm curious, you know, or maybe allowing the opposite versus doing the opposite. Why and help us understand how this all works and why you're doing it.

Yeah. Thanks for the question, Rich. So it's a really great clarification. You know, overall, we see GenAI-created content as a big tailwind for our platform, and we are very much embracing it. Part of embracing it is addressing content quality. And we address content quality primarily through our recommender systems. But then also by giving users choice in saying what they want to see. And so I think you've heard this across pretty much every platform out there, that there are some users and some use cases that would like to see less AI-driven content. And so we're simply giving the user choice, but we're also leveraging all the really great AI-generated content that is available out there. And I think this is not dissimilar to what has happened in prior expansionary moments with content, whether you think about what happened with online video or short-form video, or the ability for everyone to take a photo with their phone, initially, people react to changes in the volume of quality leading to some examples of lower content quality. But if you have recommender systems, they can really parse what's great quality versus not great quality, then you can give users the best of that expanding content corpus. And when you look at the engagement on our platform, I think that demonstrates that we're doing a pretty good job of parsing all that great influx of AI-generated content that's out there and figuring out what's going to be relevant for which user at which moment in time. And then what we're doing is augmenting what our recommender systems can do with the user's ability to give us direct feedback if they want to see less AI-driven content. You do have some use cases where someone might say, well, hey, I'm looking…

Thank you.

The next question comes from the line of Shweta Khajuria with Wolfe Research. Please proceed.

Okay. Thank you for taking my question. I was wondering if you could please talk about your relationship with Magnite and more broadly about your efforts to add new sources of demand and perhaps timeline around that?

Thanks for the question, Shweta. We've been very consistent from the beginning as we think about our programmatic and third-party strategy. Our first-party ad demand continues to be the primary driver of our growth, with third-party demand really complementing and rounding out our auction when there may be gaps in the auction. With respect to Magnite, when we announced that we said it would take time to integrate, test, and do a more fulsome go-to-market. We're still working through that testing now, and we're in the early days. Today, most of our efforts have been with respect to 3P have been focused on bringing on new sources of demand on the platform, as many of these programmatic budget pools are large and new to Pinterest today. So we continue to see that consistently with how we have before. But I would also call out that there's a next potentially meaningful opportunity that we're also starting to look at that we think we bring a unique audience to these budget pools given the high intent nature of our audience and the visual discovery that uniquely occurs on Pinterest. So as a result, we're also starting to explore very early testing at how valuable our audience could be even beyond our own platform. When you think about the very strong commercial intent that we see with our users, obviously, we satisfy a lot of that commercial intent on our platform. But we think that could be helpful beyond our platform. So we're in very early days of testing that.

Thank you. The next question comes from the line of Mark Kelley with Stifel. Please proceed.

Great. Thanks very much for taking my questions. Bill, I appreciate the extra color on Performance Plus tonight. I was hoping maybe we could drill into the SMB and kind of mid-market opportunity just a little bit more. I know you threw out that stat, the 24% higher conversion rate. Is that pretty standard whether you're a smaller advertiser versus a more sophisticated and larger brand? And if I can maybe just to clarify that 10% to 15% of revenue running through Plus, was that just an SMB and mid-market stat? And where might that go over time? Thank you.

Thanks for the question, Mark. So first of all, we feel really great about Performance Plus and how well that's working. We're not even a year into the deployment of that, and as a reminder, the larger platforms are many years into their rollout of this. So we're a year in, and we feel great about the progress that we've made. P Plus campaigns, our bundle suite of AI-enabled automated features, is really driving much better performance and reducing the inputs, 50% fewer inputs. So I called a little bit of this out. But, for example, retail advertisers using Performance Plus campaigns are seeing a 24% higher conversion lift versus traditional campaigns. It's also helping significantly as we expand to the smaller and midsized advertisers, those of tens of millions or hundreds of millions or $10 million to $100 million of GMV, who really value that automation. And for that segment, we see a 12% higher monthly revenue growth rate of adopters of P Plus campaigns versus non-adopters. And approximately 15% of our current revenue is this segment and is growing nicely. So there's a lot more to do to deepen share wallet there. And again, as a reminder, this is a segment of the market that larger platforms have had much more exposure to. We are earlier in this segment of the market, but P Plus we see as a significant unlock there. And it's having exactly the effect as intended, but we still have a lot more of that opportunity in front of us than behind us. So we're quite excited about what we're seeing from Performance Plus there. And then on the larger segment of this, ROAS bidding, as we've talked about, is really helping us get much deeper into the catalog of our largest retailers out…

Thank you.

The next question comes from the line of Ross Sandler with Barclays. Please proceed.

Great. Just want to bring Julia in on key investment priorities for next year. And how do we think about the pace of EBITDA margin expansion in '26 compared to the pace we're seeing in the second half of 2025? And then just to follow up on the agentic question. So Walmart's integrating its catalog into ChatGPT for this checkout service. I know it's early days, but for something like that, do you view that as neutral, positive, negative in terms of where that kind of a marketer might move their Pinterest ad budget in the future? Is this going to help you guys or potentially create a new headwind? Any thoughts there? Thanks a lot.

Thanks, Ross. I'll take the first question. So it's still a bit too early to talk specifically about 2026 as we're still reviewing those plans internally. But stepping back, we still feel confident in the long-term margin targets that we provided in 2023. And at that time, just as a reminder, we said we would target a 30% to 34% adjusted EBITDA margin over a three to five-year time horizon. So now here in 2025, we're already approaching 30% for the full year. So we've made a lot of progress already by growing the top line while investing thoughtfully, primarily in R&D and to a lesser extent the sales area as well. So looking forward, we continue to see many investment opportunities with high ROI, particularly across AI, the power user experiences, including our new Pinterest Assistant, which we believe will help keep us on the leading edge in visual search and discovery, as well as ongoing investment in our performance ads platform. On the gross margin line, in aggregate, we expect the cost of revenue next year to grow more in line with the business going forward, though there can be some variations quarter to quarter. And there are a few factors at play there that I'll call out. Cost of revenue, which is mostly our infrastructure costs, will naturally rise, of course, due to ongoing user and engagement growth. Additionally, we've previewed for multiple quarters now on several calls that we expect to see diminishing returns from the infrastructure cost optimization work that we've undertaken for the last two-plus years. Now partially offsetting this kind of natural upward pressure in cost of revenue is the fact that we're able to apply AI use cases sort of directly in service to monetization where we see immediate revenue. So we're not rolling out new features and then planning to monetize them years later. They monetize right away. It's sort of part of our general philosophy. We're also being cost-efficient with our model usage, including as Bill alluded to utilizing open-source models where applicable that come at a meaningful reduction in cost. So in summary, we continue to stand by our long-term adjusted EBITDA margin targets that we've always said, though the rate of adjusted EBITDA margin expansion would vary year to year. We've made a lot of progress towards these goals and we'll continue to be thoughtful about how we invest moving forward as well.

And then following up on your agentic commerce part of the question, Ross. A couple of things I'd say. One is that for the largest retailers, we have catalog integrations. I shared how we're getting deeper into their catalog with our Performance Plus capabilities, and rollout level bidding and things like that. That's getting a much broader part of the catalog available for ads. But we have those catalogs for organic shopping. For push-button type buying and linked accounts. We have that with Amazon. We've had that for some time, and millions of users on Pinterest take advantage of that and have a great experience. So we feel really great about the shopping experience that we're providing. And I think, overall, I would just say it's worth noting that there's an expansionary moment happening with search generally. And I think users, just as they did in an app-driven world, are thinking about different places to go for different types of experiences. Traditional search was always great for things like product research. And I think broad-based chatbots are sort of a next evolution of that sort of research type of shopping behavior if you're trying to figure out every attribute of the latest 4K Ultra TV, or things like that. Traditional search was always great for that, and then chatbots are even better for that. But we're solving a different type of shopping journey on Pinterest. Really, more the "I'll know when I see it" type problem. And the best evidence I can share of users thinking about these things as distinct and separate is that over the last couple of years, as we've had an explosion of usage in AI chatbots, we've put up nine straight quarters of record high user growth, shopping being at the very center of that.…

Thank you.

The next question comes from the line of John Blackledge with TD Securities. Please proceed.

Great. Thanks. Pins historically has had all of its infrastructure running through AWS. Given the move in recent years of companies shifting to multiple cloud vendors, should we think about Pins potentially diversifying to other cloud platforms? Thanks.

Thanks, John. So first, I'd say we view our infrastructure and platform as strategic assets that support our performance, reliability, and our AI roadmap, and Amazon is a fantastic partner for us, to be very clear. But in the same way that we are constantly testing all the various LLMs and benchmarking LLMs across one another, we're also constantly assessing the best infrastructure options for us as we move forward, especially in an AI-driven world. And that infrastructure includes LLMs, chip providers, hyperscalers. So again, if you look at what we've done over the last few years, you've seen us put AI at the center of our business, really effectively align that with the ability to monetize for users, deliver great results for users, and do so cost-effectively. And again, we've had great partnerships there, but the space is evolving and we continue to pay really close attention to that and benchmark across multiple providers on each of those sort of layers of the stack. Hopefully, that's helpful.

Thank you. This will be the last question. From Michael Morris with Guggenheim. Please proceed.

Thank you. Good afternoon. Bill, you referenced a couple of times deepening engagement per user. And I'm hoping you can add some context to that. Are you talking about time spent or visit frequency or some other metric? Do you see that as a leading indicator of reaccelerated growth in the UCan market? And then secondly, on international, the growth there is significant. That has accelerated. How much runway do you see to continue to grow internationally at that elevated level, and maybe you gave us a few drivers, but what do you see as the one or two key drivers as we look forward? Thank you.

Yeah. Thanks for the question, Mike. On the deepening engagement per user, we've talked about this very consistently over many quarters now. Is that we are deepening engagement per user across the areas that we want, which are around search, curation, clicks, and actions. And I shared a little more color on this call around the search behavior where we are getting more searches per user. So it's not just our searches are growing. We are getting more searches per user. We are getting them in the ways that we want, particularly around where we are very highly differentiated around our visual searches, related items, and other forms of visual searches. Drive the vast majority of that search behavior. But it is more searches per user happening on our platform even as we put up record high levels of users, and also significantly growing actionability, I just how much the clicks to advertisers have grown five x over the last three years. We're driving a tremendous amount of clicks to advertisers. So it is that great relevancy driving great recommendations that leads to actionability that leads to more users coming back from more searches and more actions, like, that is that flywheel that's spending on the deepening user engagement. And to your question around that a leading indicator of monetization? Think absolutely, yes. What I would say is that three years ago, Pinterest was pretty much upper funnel only. We've had a major transformation of the business, both in terms of user engagement, which, again, I think continues to be the brightest spot in the business. And advertisers will always follow where users and commercial intent are. We stood up a performance ad platform pretty much from scratch over the last couple of years. And we are still a long…

Thank you. I will now hand the call over to Bill Ready, CEO, for any closing remarks.

Again, thank you to all of you for joining the call and for your questions. We look forward to keeping this dialogue going, and we hope you enjoy the rest of your day.

That concludes today's conference call. Thank you. You may now disconnect your line.