Pinterest Revenue Beats Estimates as AI Personalization Drives User Growth
Pinterest reported first-quarter revenue of $1.01 billion, beating analyst expectations by 4.4% and growing 17.8% year over year. The social commerce platform also raised guidance for the second quarter to $1.14 billion at the midpoint, 2% above Wall Street estimates.
The company added 61 million monthly active users to reach 631 million, marking ten consecutive quarters of double-digit user growth. CEO William J. Ready attributed the performance to proprietary AI models that improved content personalization and user engagement.
Adjusted EBITDA came in at $206.5 million, a 17.1% beat. However, the GAAP operating margin declined to -8% from -4.1% in the same quarter last year, reflecting higher spending on sales, marketing, and product development.
AI Models and Advertiser Tools Drive Commercial Growth
Pinterest's taste graph and PinRack recommendation systems increased user retention and engagement. Management said these models form the foundation for sustained user growth and advertiser outcomes.
The Performance Plus suite-which bundles bidding, targeting, and creative tools-now powers 30% of lower-funnel ad revenue. Mid-market and small business advertisers using the suite are increasing spending at twice the rate of non-adopters.
Measurement capabilities improved through new integrations with advertiser attribution systems and native A/B testing. These tools help advertisers track return on ad spend and drive adoption of Pinterest's performance campaigns.
Diversification Beyond Large Retailers
Revenue growth came from mid-market, managed small business, and international advertisers. Large retail clients, a historical headwind, showed late-quarter stability after Pinterest deployed targeted AI-driven bidding optimizations.
The company is investing in leadership and infrastructure to accelerate growth outside the U.S. market, though management acknowledged uneven progress in the short term due to organizational changes and regional economic conditions.
Connected TV Expansion and Future Priorities
Pinterest's acquisition of TV Scientific extended its audience reach into connected TV advertising. Early partners reported measurable uplift in reach and incremental sales from cross-platform campaigns.
For upcoming quarters, management expects AI for Product Development and AI for Marketing investments to drive revenue and margin performance. The company is also building AI-powered shopping experiences and advertiser tools while expanding measurement capabilities.
CFO Julia Brau Donnelly said the company will deepen integration with advertisers' own attribution systems. "We are pairing a world-class engineering team with unique data to build models that deliver the best results for our specific use cases," Ready said.
What to Watch
- Mid-market and international advertiser adoption rates in coming quarters
- Measurable returns from AI campaign tools and attribution integrations
- Connected TV revenue contribution and scaling impact
- Effectiveness of the new go-to-market structure in diversifying revenue streams
Pinterest stock rose from $20.40 to $24.08 following the earnings announcement. The company trades at a market capitalization of $12.01 billion.
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