Pinterest's Q2 Earnings Top Estimates on AI-Led Ad Growth

PINS Posts Another Quarter of User Growth

Pinterest ended the quarter with 640 million global MAUs, up 11% year over year, extending its streak of double-digit user growth. Growth remained broad-based across geographies, with U.S. and Canada MAUs increasing 4%, Europe rising 8% and Rest of World climbing 15%.

User engagement continued to benefit from AI-driven personalization. Management highlighted that Pinterest's proprietary Taste Graph is powered by more than 80 billion monthly searches and over 16 billion user-created boards, helping deliver more relevant recommendations and strengthening the platform's position as a visual shopping destination.

Pinterest Expands Monetization Through AI

Pinterest generated revenues of $1.18 billion, up 18% year over year. Growth was led by stronger advertiser demand, particularly across conversion and consideration campaigns, supported by enhancements to the company's AI-powered advertising platform. Retail remained the largest contributor, while financial services, travel and health were among the fastest-growing verticals.

Geographically, U.S. and Canada revenues increased 18% to $880 million. Europe revenues rose 12% to $213 million, while Rest of World revenues surged 38% to $87 million. Ad impressions increased 16% year over year, while average ad pricing improved 1%, aided by stronger demand in the higher-priced U.S. and Canada market.

PINS Advances AI Products Across Platform

Artificial intelligence remained central to Pinterest's product strategy during the quarter. The company rolled out Pinterest Assistant to the vast majority of U.S. users, enabling conversational shopping experiences, product comparisons and personalized recommendations throughout the buying journey.

Pinterest also expanded its advertising capabilities. Smart Assembly was introduced to automatically optimize creative assets for advertisers without product catalogs, while Business Assistant entered beta to help advertisers improve campaign performance. Management also expanded testing of AI-powered bidding integrations and continued building out Pinterest Performance+ to automate campaign creation, targeting and optimization.

Pinterest Margins Improve Despite Investments

Pinterest continued to deliver profitability improvements as revenue growth outpaced spending. Adjusted EBITDA increased 24% year over year to $311 million, while adjusted EBITDA margin expanded to 26% from 25% in the prior-year period.

Cost of revenue increased 25% year over year to $245 million, reflecting higher GPU infrastructure investments and the full-quarter impact of tvScientific. Non-GAAP operating expenses rose 13%, driven primarily by higher sales and marketing spending tied to the company's new brand campaign and increased research and development investments supporting AI initiatives.

PINS Strengthens Cash Flow and Liquidity

Pinterest generated $293 million in operating cash flow and $270 million in free cash flow during the second quarter. The company ended the period with $1.3 billion in cash, cash equivalents and marketable securities. It also allocated $58 million toward share repurchases during the quarter and noted that it had repurchased more than $2 billion of stock year to date, retiring approximately 111 million shares.

The company also entered into a capped-call transaction for $99 million, increasing protection against dilution from its previously issued convertible notes up to a share price of $30.59. Management said the strong cash generation and balance sheet provide flexibility to continue investing in AI initiatives while returning capital to shareholders.

Pinterest Outlook Reflects Continued Growth

For the third quarter of 2026, Pinterest expects revenues between $1.19 billion and $1.21 billion, representing year-over-year growth of 13% to 15%. Adjusted EBITDA is projected in the range of $335 million to $355 million.

Management also raised its full-year adjusted EBITDA margin outlook to approximately 30% from the prior target of 29%, reflecting stronger-than-expected first-half execution. The company expects continued progress from AI-driven advertising, monetization initiatives and go-to-market improvements, although foreign exchange and the timing of Prime Day and World Cup-related advertising spending are expected to create modest headwinds in the third quarter.

Zacks Rank

Pinterest currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Keysight Technologies, Inc. KEYS is scheduled to release third-quarter fiscal 2026 earnings on Aug. 18. The Zacks Consensus Estimate for earnings is pegged at $2.46 per share, suggesting growth of 43.02% from the year-ago reported figure.

Keysight has a long-term earnings growth expectation of 19.44%. The company delivered an average earnings surprise of 9.46% in the last four reported quarters.

Analog Devices, Inc. ADI is set to release third-quarter fiscal 2026 earnings Aug. 19. The Zacks Consensus Estimate for earnings is pegged at $3.33 per share, implying growth of 62.44% from the year-ago reported figure.

Analog Devices has a long-term earnings growth expectation of 31.04%. The company delivered an average earnings surprise of 5.48% in the last four reported quarters.

Applied Materials, Inc. AMAT is scheduled to release third-quarter fiscal 2026 earnings on Aug. 13. The Zacks Consensus Estimate for earnings is pegged at $3.36 per share, suggesting growth of 35.48% from the year-ago reported figure.

Applied Materials has a long-term earnings growth expectation of 32.44%. The company delivered an average earnings surprise of 6.06% in the last four reported quarters.

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