Pinterest (NYSE:PINS) Exceeds Q1 Expectations, Stock Jumps 16%

May 08, 2025 at 17:07 PM EDT

Social commerce platform Pinterest (NYSE: PINS) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 15.5% year on year to $855 million. Guidance for next quarter’s revenue was better than expected at $970 million at the midpoint, 0.6% above analysts’ estimates. Its non-GAAP profit of $0.23 per share was 9.8% below analysts’ consensus estimates.

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Pinterest (PINS) Q1 CY2025 Highlights:

Revenue: $855 million vs analyst estimates of $846.9 million (15.5% year-on-year growth, 1% beat)
Adjusted EPS: $0.23 vs analyst expectations of $0.26 (9.8% miss)
Adjusted EBITDA: $171.6 million vs analyst estimates of $162.6 million (20.1% margin, 5.6% beat)
Revenue Guidance for Q2 CY2025 is $970 million at the midpoint, roughly in line with what analysts were expecting
EBITDA guidance for Q2 CY2025 is $227 million at the midpoint, below analyst estimates of $230.8 million
Operating Margin: -4.1%, up from -5.6% in the same quarter last year
Free Cash Flow Margin: 41.7%, up from 21.7% in the previous quarter
Monthly Active Users: 570 million, up 52 million year on year
Market Capitalization: $18.49 billion

Company Overview

Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Pinterest’s sales grew at a decent 12.1% compounded annual growth rate over the last three years. Its growth was slightly above the average consumer internet company and shows its offerings resonate with customers.

This quarter, Pinterest reported year-on-year revenue growth of 15.5%, and its $855 million of revenue exceeded Wall Street’s estimates by 1%. Company management is currently guiding for a 13.6% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 13.1% over the next 12 months, similar to its three-year rate. This projection is admirable and indicates the market is baking in success for its products and services.

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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 10.4% annually to 570 million in the latest quarter. This growth rate is solid for a consumer internet business and indicates people are excited about its offerings.

In Q1, Pinterest added 52 million monthly active users, leading to 10% 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 mediocre over the last two years, averaging 4.8%. This isn’t great, but the increase in monthly active users is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Pinterest tries boosting ARPU by taking a more aggressive approach to monetization, it’s unclear whether users can continue growing at the current pace.

This quarter, Pinterest’s ARPU clocked in at $1.52. It grew by 4.1% year on year, slower than its user growth.

Key Takeaways from Pinterest’s Q1 Results

We enjoyed seeing Pinterest beat analysts’ revenue and EBITDA expectations this quarter. We were also glad it expanded its number of users. On the other hand, its EBITDA guidance for next quarter missed. Overall, this print had some key positives. The stock traded up 16% to $32.35 immediately after reporting.

So should you invest in Pinterest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.

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