Users hit a record high in the third quarter, but revenue “stalled”: Citi maintains Pinterest (PINS.US) “neutral” rating

The Zhitong Finance App noticed that the image source social networking platform Pinterest (PINS.US) handed over a mixed report card for the third quarter of 2026. Citi pointed out that although the platform's monthly active users (MAU) reached a record high, the monetization capacity of each region weakened, causing both revenue and profit to fall short of expectations, and the fourth quarter guidance also fell short of the market's agreed expectations. Citi maintains a “neutral/high risk” rating for the stock, with a target price of $27.

Strong user growth, lagging behind in monetization capacity

In the third quarter, Pinterest's global MAU reached 661 million, a year-on-year increase of 10.2%, exceeding market expectations by about 1%, setting a new historical record. However, the expansion in user size did not translate into corresponding revenue growth: the global average revenue per user (ARPU) was only $1.08, a slight increase of 1.1% year over year.

Revenue for the quarter was US$1.17 billion, up 11.9% year on year, about 3% lower than market expectations; adjusted EBITDA was US$339 million, profit margin 28.9%, lower than market expectations of US$347 million, and was at the lower end of the company's own guidance range.

Europe became the biggest drag

Looking at the subregion, the US and Canada (UCAN) market revenue increased by about 14% year on year, and the performance is still steady; however, European revenue was about 7% lower than Citi's forecast, and the year-on-year growth rate was almost flat; revenue in the rest of the world (ROW) was also lower than the forecast by about 8%.

Citi believes that the weakness in the European market is mainly due to two aspects: first, the company's own business restructuring and adjustments, and the second is that the EU's new tax exemption regulations for low-value products that have come into effect in July have suppressed cross-border e-commerce advertising — this policy change directly impacted social e-commerce platforms that are highly dependent on the advertising budgets of Chinese cross-border sellers.

The fourth quarter guidance further disappointed the market. Management expects revenue for the fourth quarter to increase by 8.0% to 11.2% year on year (including moderate exchange rate headwinds), with a median value of US$1.45 billion, which is significantly lower than market expectations of US$1,518 million (corresponding to a 15% year-on-year growth rate); the adjusted EBITDA guidance range is US$538 million to US$588 million, which is also lower than market expectations of US$601 million.

Product and AI layout became the focus of the conference call

The five major concerns of the conference call listed by Citibank include user growth trends in the UCAN market, responses to the slowdown in monetization growth in the three regions, Performance+ product roadmap (covering ROAS intelligent bidding, lower funnel goals, and audience prioritization functions), search and shopping innovations such as visual search advertising and self-service A/B testing, and the EBITDA profit margin trajectory in the context of continuing to increase growth investment.

The bank believes that Shunfeng products such as Pinterest Assistant and Performance+ are expected to enhance monetization and user engagement, constituting a potential catalyst for performance exceeding expectations.