Social commerce platform Pinterest (NYSE: PINS) met Wall Streets revenue expectations in Q3 CY2025, with sales up 16.8% year on year to $1.05 billion. On the other hand, next quarter’s revenue guidance of $1.33 billion was less impressive, coming in 1% below analysts’ estimates. Its non-GAAP profit of $0.38 per share was 8.8% below analysts’ consensus estimates.
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Pinterest (PINS) Q3 CY2025 Highlights:
- Revenue: $1.05 billion vs analyst estimates of $1.05 billion (16.8% year-on-year growth, in line)
- Adjusted EPS: $0.38 vs analyst expectations of $0.42 (8.8% miss)
- Adjusted EBITDA: $306.1 million vs analyst estimates of $297.2 million (29.2% margin, 3% beat)
- Revenue Guidance for Q4 CY2025 is $1.33 billion at the midpoint, below analyst estimates of $1.34 billion
- Operating Margin: 5.6%, up from -0.7% in the same quarter last year
- Free Cash Flow Margin: 30.3%, up from 19.7% in the previous quarter
- Monthly Active Users: 600 million, up 63 million year on year
- Market Capitalization: $22.91 billion
Company Overview
Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, Pinterest grew its sales at a decent 13.5% compounded annual growth rate. Its growth was slightly above the average consumer internet company and shows its offerings resonate with customers.
This quarter, Pinterest’s year-on-year revenue growth was 16.8%, and its $1.05 billion of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 14.8% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 15.1% over the next 12 months, an acceleration versus the last three years. This projection is commendable and suggests its newer products and services will fuel better top-line performance.
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Monthly Active Users
User Growth
As a social network, Pinterest generates revenue growth by increasing its user base and charging advertisers more for the ads each user is shown.
Over the last two years, Pinterest’s monthly active users, a key performance metric for the company, increased by 11.2% annually to 600 million in the latest quarter. This growth rate is strong for a consumer internet business and indicates people love using its offerings. 
In Q3, Pinterest added 63 million monthly active users, leading to 11.7% year-on-year growth. The quarterly print isn’t too different from its two-year result, suggesting its new initiatives aren’t accelerating user growth just yet.
Revenue Per User
Average revenue per user (ARPU) is a critical metric to track because it measures how much the company earns from the ads shown to its users. ARPU can also be a proxy for how valuable advertisers find Pinterest’s audience and its ad-targeting capabilities.
Pinterest’s ARPU growth has been decent over the last two years, averaging 5.8%. Its ability to increase monetization while effectively growing its monthly active users demonstrates the value of its platform. 
This quarter, Pinterest’s ARPU clocked in at $1.78. It grew by 4.7% year on year, slower than its user growth.
Key Takeaways from Pinterest’s Q3 Results
It was encouraging to see Pinterest beat analysts’ EBITDA expectations this quarter. We were also glad it expanded its number of users. On the other hand, its EPS missed and its revenue guidance for next quarter fell short. Overall, this quarter could have been better. The stock traded down 14.5% to $28.16 immediately after reporting.
Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
