Pinterest’s AI Push Pays Off in Record Users and Revenue

Pinterest set out to reinvent itself as an artificial intelligence-driven shopping destination, and its second quarter results suggest the strategy is working.

Revenue topped $1 billion for the fourth straight quarter, and monthly active users hit a record high, the 11th consecutive quarter of double-digit user growth. The company points to its AI conversational assistant, expanded to most U.S. users in July, as the mechanism behind the acceleration.

Pinterest has spent three years turning itself into what CEO Bill Ready calls an AI-powered shopping assistant. Every pin a user sees now runs through a recommendation model trained on that user’s saves, searches and boards. The newest layer targets a different part of the shopping journey: the research phase, when someone has an idea but not yet a decision.

More than 96% of Pinterest’s text-based searches are unbranded, phrases like “cool running shoes” rather than a specific product name. That’s the gap Pinterest is building AI to close, and the company’s results this quarter show the strategy translating into revenue.

AI as the Shopping and Advertising Layer

Pinterest Assistant lets users move from an idea to a finished plan without leaving the app. Someone planning a living room refresh can ask what styles fit their space, get help finding a rug and see how to combine pieces within a budget, all inside one conversation. The assistant draws on years of visual curation data that Ready says gives Pinterest an edge closed models can’t replicate.

The company builds its AI around cost as much as capability. Pinterest post-trains open-source models on its own user data rather than defaulting to closed proprietary models from outside vendors. Ready said that approach delivers better shopping recommendations for Pinterest’s specific use cases while cutting costs sharply.

“With open models, we are achieving cost per transaction at less than 8% of the cost of comparable closed proprietary models,” Ready told analysts on the call. He said the savings give Pinterest room to expand the assistant without matching spending to closed model pricing.

The same AI investment reshaped Pinterest’s ad platform. Performance Plus, the company’s automated campaign tool, now carries roughly 30% of Pinterest’s lower funnel ad revenue. Advertisers using bidding within that product saw a 28% improvement in return on ad spend during testing this quarter, driven by updates to Pinterest’s shopping ad delivery models.

Pinterest’s core U.S. and Canada market accelerated five points sequentially to 18% revenue growth, the fastest pace in that region this year. The gain came from AI-driven bidding improvements that pulled in more large retailer spend, along with rising participation from mid-market and small business advertisers using automated shopping campaigns.

Retail remained Pinterest’s largest advertising vertical, with smaller but faster-growing categories including financial services, travel and health adding to the shopping mix. Ad pricing rose just 1% year over year, while impressions grew 16%, a deceleration the company attributed to lapping heavier volume in previously undermonetized international markets.

What Else Stood Out

Pinterest is piloting integrations between advertisers’ own measurement systems and its AI bidding engine, letting a small group of large advertisers optimize toward outcomes like customer lifetime value instead of last click attribution.

TV Scientific, Pinterest’s connected television ad product, will fully integrate into Performance Plus in 2027, extending shopping ad targeting into search, social and CTV in one buying interface.

Weekly pull requests per engineer rose 45% year over year in July as Pinterest expanded internal AI tools for software development, without a corresponding rise in incident rates.

Gen Z now makes up more than half of Pinterest’s user base, and Ready pointed to third-party research showing 39% of that cohort already treats Pinterest as a first stop for search.

Topline Growth and Future Outlook

Pinterest reported second quarter revenue of $1.18 billion, up 18% year over year, or 17% on a constant currency basis. U.S. and Canada revenue reached $880 million, up 18%. Free cash flow reached $270 million for the quarter, bringing trailing 12 month free cash flow to nearly $1.3 billion, a 94% conversion rate.

Pinterest repurchased $58 million in shares during the quarter and has bought back more than $2 billion year to date. The company ended the period with $1.3 billion in cash, cash equivalents and marketable securities. For the third quarter, the company guided revenue of $1.19 billion to $1.21 billion, representing 13% to 15% growth.