The Picture Looks Rosy... At First
Pinterest just dropped its Q3 2025 numbers, and the initial reaction seems positive. Revenue is up 17% year-over-year, hitting $1.05 billion. Global monthly active users (MAUs) are also up 12%, reaching 600 million. CEO Bill Ready is talking a big game about AI turning Pinterest into an "AI-powered shopping assistant."
But let's pump the brakes for a second. A closer look reveals a few potential cracks in the facade.
The earnings per share (EPS) actually missed estimates, coming in at $0.38 versus the expected $0.42. Not a massive miss, but a miss nonetheless. And while revenue growth is solid, the Q4 guidance of $1.313 billion to $1.338 billion, representing 14%-16% year-over-year growth, is underwhelming. The Street was expecting more, roughly $1.34 billion. PINS Earnings: Pinterest Plunges on Q3 Earnings Miss, Weak Outlook
This isn’t necessarily a disaster, but it does raise the stakes. If Pinterest wants to justify its current valuation (and avoid another 20% stock plunge like we saw after the Q3 release), it needs to show investors that it has a plan – and that plan seems to be AI.
The AI Hype Train: What's Real?
Pinterest is touting its AI-powered features as the key to future growth, specifically mentioning Pinterest Assistant and enhanced personalized shopping tools. The claim is that these features will drive deeper user engagement and translate into higher advertising revenue.
The logic is sound enough. More personalized experiences should lead to more relevant ads, which should lead to higher click-through rates and better conversion. But the devil, as always, is in the details.
How effective are these AI features? What's the actual uplift in user engagement and ad revenue they're generating? These are the questions the investor call should've been hammering, but the answers were noticeably vague.
I've looked at hundreds of these filings, and the reliance on "AI" as a magic bullet is becoming a bit of a red flag. It's not enough to say you're using AI; you have to demonstrate tangible results.
And this is the part of the report that I find genuinely puzzling. If AI is truly driving such significant improvements, why isn't it reflected more clearly in the Q4 revenue guidance? Why are they only projecting 14%-16% growth when they just posted 17%? Is the AI impact being overstated, or are there other factors at play?
International ARPU: The Real Battleground
One area where Pinterest is seeing significant growth is in its international markets. Revenue in Europe jumped 41%, and in the "Rest of World" category, it exploded by 66%. That sounds fantastic, right? Pinterest Announces Third Quarter 2025 Results, Delivers 17% Revenue Growth and Record Users
Here's the problem: the average revenue per user (ARPU) in those markets is still laughably low compared to the US and Canada. In the US and Canada, ARPU is $7.64. In Europe, it's $1.31. And in the Rest of World, it's a paltry $0.21.
This discrepancy is massive (a more exact figure is that the US/Canada ARPU is 36 times higher than the Rest of World). It means that Pinterest could add millions of new users in these international markets, but it won't move the needle on overall revenue unless it can significantly increase ARPU. Can AI help with this? Possibly. If Pinterest can use AI to deliver more relevant and engaging content to international users, it could drive up engagement and ad revenue.
But even then, there's no guarantee. Cultural differences, language barriers, and varying levels of internet access could all limit the effectiveness of AI-powered personalization.
AI: Savior or Smokescreen?
So, is Pinterest's AI bet a genius move or a desperate throw? The answer, as always, is complicated.
The company is showing solid revenue growth and user growth, but it's also facing challenges in terms of profitability and international monetization. AI could be a powerful tool for addressing these challenges, but it's not a silver bullet. Pinterest needs to show concrete evidence that its AI investments are paying off, and it needs to do it quickly.
If it can't, the stock plunge we saw after the Q3 earnings release could be just the beginning.