PINTEREST, INC. Annual Report - Fiscal Year Ended December 31, 2025

Pinterest, Inc. closed its fiscal year on December 31, 2025, reporting robust growth and strategic advancements. As a large, established company, classified as a "large accelerated filer" and "well-known seasoned issuer" with a market capitalization of approximately $18.7 billion as of June 30, 2025, Pinterest continues to strengthen its position as a leading visual discovery engine and advertising platform.

Business Overview: Pinterest, Inc. is a visual discovery engine that helps users find inspiration, discover new ideas, and plan various aspects of their lives. Its core product, the Pinterest platform, is accessible via web and mobile applications. Users save and organize visual content, called "Pins," into themed collections known as "Boards." Pinterest earns nearly all its revenue by selling advertisements to businesses of all sizes. These ads seamlessly integrate into the user experience, appearing as promoted Pins, video ads, and shopping ads. This approach capitalizes on the platform's unique intent-driven discovery model. Pinterest's mission is to bring everyone the inspiration to create a life they love.

Financial Performance & Growth: For the fiscal year 2025, Pinterest generated $4.2 billion in total revenue, a significant 18% increase year-over-year. This growth stemmed primarily from expanding advertising offerings and a rise in Average Revenue Per User (ARPU). Despite increased investments in product development and marketing, the company achieved net income of $350 million, or $0.52 per diluted share, demonstrating improved operational efficiency.

Key growth metrics include:

• Global Monthly Active Users (MAUs) grew to 520 million, an 8% increase from the prior year, driven by strong engagement, especially in international markets.
• Global ARPU increased 10% to $8.08. The U.S. & Canada segment showed particular strength, with ARPU rising 12% to $28.50.
• Cost of Sales rose 15% to $850 million. Research and Development expenses increased 20% to $1.1 billion, reflecting ongoing innovation. Selling and Marketing expenses climbed 16% to $900 million, and General and Administrative costs grew 10% to $400 million.

Management Discussion and Analysis (MD&A) Highlights: Management attributed the robust revenue growth primarily to increased advertiser demand and the successful rollout of new advertising formats and measurement tools, particularly in the U.S. and Canada segment. The rise in global MAUs reflects ongoing user acquisition efforts and product enhancements aimed at improving content relevance and engagement. Operating expenses grew due to strategic investments in AI, product innovation, and market expansion. However, the company's net income growth demonstrates effective cost management and leverage from its expanding revenue base. Management emphasized the importance of continued investment in the platform's core technology, creator tools, and monetization capabilities to sustain long-term growth and enhance shareholder value. The company also addressed the impact of macroeconomic factors on advertising spend and outlined its strategies to mitigate these effects.

Financial Health: Pinterest maintains a strong financial position, concluding the year with $2.5 billion in cash, cash equivalents, and marketable securities and minimal long-term debt. The company also has access to a $500 million revolving credit facility, last amended in October 2022 and fully undrawn as of December 31, 2025. This provides ample liquidity and financial flexibility for future investments or operational needs.

Future Outlook: In 2025, the company's strategy focused on enhancing the user experience, expanding monetization opportunities, and fostering a vibrant creator ecosystem. Key initiatives included deeper integration of shopping features, advancements in video content, and AI-powered personalization.

Looking ahead, Pinterest announced the planned acquisition of TvScientific, which it expects to close between January and June 2026. This strategic acquisition will bolster Pinterest's capabilities in video advertising measurement and attribution, expanding its reach into connected TV and offering advertisers more sophisticated tools to track campaign performance. This aligns with Pinterest's broader vision to become a more comprehensive platform for advertisers seeking measurable returns.

Competitive Position: Pinterest operates in a highly competitive and rapidly evolving market. Its primary competitors include other social media platforms (e.g., Meta Platforms, Snap Inc., TikTok), search engines (e.g., Google), e-commerce platforms (e.g., Amazon, Shopify), and various digital advertising and content platforms. Competitors vie for user engagement, advertiser reach, data analytics capabilities, and effective advertising solutions.

Pinterest stands out with its unique visual discovery format, its focus on inspiration and planning (rather than social networking), and its strong intent-driven user base, which provides valuable signals for advertisers. To maintain its competitive edge, the company focuses on continuous product innovation, expanding its creator ecosystem, enhancing shopping features, and improving its advertising technology and measurement tools.

Key Risks: Investors should consider several key risks outlined in the report. These include intense competition from other social media and e-commerce platforms, volatility in the digital advertising market, and potential impacts from changes in data privacy regulations. Challenges related to content moderation and platform integrity also persist. Furthermore, economic downturns or shifts in consumer behavior could affect user engagement and advertising spend.

Overall, Pinterest delivered solid financial performance and strategic execution in 2025. The company positioned itself for continued growth through innovation, user engagement, and expanded monetization capabilities, especially within the evolving digital advertising and e-commerce landscape.