Pinterest Q1 Earnings Miss Estimates Despite Y/Y Revenue Growth

Pinterest, Inc. PINS reported modest first-quarter 2025 results, wherein the bottom line missed the Zacks Consensus Estimate while revenues beat the same. The San Francisco-based Internet content provider reported revenue growth year over year, driven by strong momentum in all regions. Management’s focus on improving shoppability and monetization potential across the platform and the incorporation of advanced AI-integrated tools to support advertisers and retailers led to top-line growth. Weakness within the food & beverage sub-sector of consumer-packaged goods remains a headwind.

PINS’ Net Income

On a GAAP basis, net income was $8.9 million, or a penny per share, against a net loss of $24.8 million, or a loss of 4 cents per share, in the prior-year quarter. Top-line growth led to an improvement in net income.

Non-GAAP net income was $159.6 million, or 23 cents per share, up from $119.8 million, or 17 cents per share, in the year-ago quarter. The bottom line fell short of the Zacks Consensus Estimate by 2 cents. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

PINS’ Q1 Revenues in Detail

During the quarter, revenues rose to $855 million from $740 million in the prior-year quarter, beating the Zacks Consensus Estimate of $846 million. Pinterest witnessed 10% year-over-year growth in global monthly active users (MAUs) to 570 million, which is an all-time record.

The company is witnessing healthy momentum in the retail sector, coupled with growing traction in some emerging markets such as financial services, technology and entertainment are driving growth. Demand softness in consumer-packaged goods verticals is a headwind. Integration of various AI-native tools, such as ROAS (return on ad spend) bidding and image resizing, has streamlined the process of campaign creation and enhanced conversion.

Pinterest’s effort to bridge the gap between upper-funnel storytelling and inspiration to lower-funnel conversion is improving campaign performance. Focus on personalization through AI recommendation models is driving click-through rates. Initiatives to boost international expansion and open up new monetization opportunities are positive.

The United States and Canada generated $663 million in revenues, up 12% year over year. Net sales missed our revenue estimate of $678.3 million. Solid momentum in retail and emerging verticals, including financial services and technology, supported the net sales. Revenues from Europe totaled $147 million, up 24% from $118 million in the year-ago quarter. The top line surpassed our estimate of $129.3 million. Healthy traction in retail boosted the top line. Net sales from the Rest of World rose to $45 million from $30 million recorded in the prior-year quarter, exceeding our revenue estimate of $38.9 million.

MAUs from the United States and Canada were 102 million, up 4% year over year. The quarterly figure surpassed our estimate of 98.8 million. The Rest of World registered MAUs of 320 million, up 14% from 279 million in the year-earlier quarter. MAUs from Europe increased to 148 million from 140 million in the year-ago quarter and beat our estimate of 143.6 million.

In the March quarter, the global average revenues per user (ARPU) stood at $1.52 compared with the year-ago quarter’s figure of $1.46. ARPU in Europe improved 17% year over year to $1.00, while the United States and Canada rose 8% year over year to $6.54. ARPU from the Rest of World increased 29% year over year to 14 cents.

Other Details

Adjusted EBITDA was $172 million in first-quarter 2025, up from the prior-year quarter’s tally of $126 million. Disciplined expense management and operational efficiency led to a 36% year-over-year improvement. Total costs and expenses were $890.5 million, up from $794.4 million in the year-ago quarter. On a GAAP basis, research and development expenses rose to $331.7 million from $280.3 million.

PINS’ Cash Flow & Liquidity

In the first quarter, the company generated $363.7 million of cash from operating activities compared with $356.1 million in the prior-year quarter. As of March 31, 2025, Pinterest had $1.25 billion in cash and cash equivalents and $143.9 million of operating lease liabilities.

PINS’ Outlook for Q2

For the second quarter of 2025, Pinterest expects revenues in the range of $960-$980 million, indicating 12-15% year-over-year growth. Management expects adjusted EBITDA to be in the range of $217-$237 million.

PINS’ Zacks Rank & Stocks to Consider

Pinterest currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks that investors may consider.

Juniper Networks, Inc. JNPR sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last reported quarter, it delivered an earnings surprise of 4.88%. Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. Juniper also introduced new features within the AI-driven enterprise portfolio that enable customers to simplify the rollout of their campus wired and wireless networks while bringing greater insight to network operators.

InterDigital IDCC carries a Zacks Rank #2 (Buy) at present. In the trailing four quarters, InterDigital delivered an earnings surprise of 160.15%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. InterDigital boasts a comprehensive portfolio of more than 33,000 granted patents and applications. The company witnessed an exceptional year in innovation in 2024, with more than 5,000 new patent filings worldwide.

T-Mobile US, Inc. TMUS carries a Zacks Rank #2 at present. Headquartered in Bellevue, WA, T-Mobile is a national wireless service provider. It continues to deploy 5G with the mid-band 2.5 GHz spectrum from Sprint. The 2.5 GHz 5G delivers superfast speeds and extensive coverage with signals that go through walls and trees, unlike 5G networks that are controlled by the mmWave spectrum. This gives T-Mobile a competitive edge over AT&T and Verizon.

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