TenQ

The Pinterest story

Pinterest runs a visual discovery app funded by shopping and brand ads, with the central question whether its expanding global audience can generate more advertising revenue per user and stronger profits after stock pay.

Written from Pinterest's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $18.41share price, last close
  • $10.4Bmarket value
  • 18/36TenQ Score checks passed
  • 15.8%growth a year the price assumes

The story in brief

  • Audience keeps expanding. In the quarter to June 2026, monthly active users reached 640 million, up 11%, while revenue grew 18% to $1,180 million.
  • Cash needs context. Over the last twelve months, Pinterest generated $1.3 billion in free cash flow alongside $1.0 billion in stock-based pay.
  • Repurchases reshape finances. Pinterest completed over $2 billion of share repurchases in the first half of 2026, following Elliott's agreement to invest through convertible notes.

What drives the business

  • Pinterest connects visual discovery with shopping, using searches, saved Pins and boards to improve recommendations and show relevant ads, with over 90% of searches unbranded.
  • Shopping ads promote products from advertisers' catalogs, while Pinterest Performance+ automates campaign setup, bidding and creative optimization to help advertisers generate measurable results.
  • The audience reached 640 million monthly active users in the quarter to June 2026, marking its 11th consecutive quarter of double-digit user growth.
  • In the quarter to June 2026, Rest of World revenue grew 38% and average revenue per user rose 21%, compared with revenue growth of 18% in the U.S. and Canada and 12% in Europe.
  • In March 2026, Pinterest agreed to issue Elliott $1 billion of 1.75% Convertible Senior Notes due 2031, with proceeds intended for an accelerated share repurchase under a new $3.5 billion authorization.

What the price assumes

At $18.41 per share, the reverse DCF implies free cash flow after stock pay grows 15.8% a year for ten years, using a 10.2% discount rate.

Pinterest delivered 14.5% growth in that measure over the last twelve months, below the sustained pace implied by the price.

The TenQ check sets a lower bar of 9.3%, reflecting the record slowing halfway to 4%, so Pinterest fails the check for a price that assumes less growth than its record suggests.

Value PINS on your own assumptions

What could change the story

  • The $1.0 billion in stock-based pay over the last twelve months makes reported free cash flow a substantially different measure from cash flow after stock pay.
  • Profitability remains uneven: the operating margin over the last twelve months was 4.9%, against the TenQ sector benchmark of 11.0%, and the quarter to June 2026 produced a GAAP net loss of $47 million, including $14 million in restructuring charges.
  • Shareholder distributions represented 212.8% of free cash flow in the TenQ check, while cash and short-term investments stood at $1.3 billion against total debt of $981 million.
  • Pinterest competes with Amazon, Meta, Google and other platforms for users and advertising budgets, making advertiser results central to retaining spending.
  • Privacy and content rules could require changes to Pinterest's practices and increase compliance costs, while changes to search engines or app stores could disrupt user traffic.

What to watch next

  • For the quarter to September 2026, Pinterest expects revenue of $1,190 million to $1,210 million, representing 13% to 15% growth with a modest foreign exchange headwind, and adjusted EBITDA of $335 million to $355 million.
  • Regional user growth and average revenue per user will show whether international audience expansion continues to translate into advertising revenue, particularly after Rest of World's 21% increase in revenue per user in the quarter to June 2026.
  • Stock-based pay, GAAP profitability and repurchase spending relative to free cash flow will show whether stronger adjusted results also strengthen finances after compensation and shareholder distributions.

Sources

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