How Would You Fix Pinterest?
For questions about this article or underlying research, email help@trefis.com.
If you own Pinterest (PINS), you own a business whose sales are still growing. Revenue grew 15.4% over the four quarters ended September 30, 2026. Yet the stock lost 27.5% over the past year, while the S&P 500 returned 13.7%.
The company continues to expand as its share price heads the other way. So if you were handed the keys to Pinterest on Monday, where would you start?
You Would Start With Pinterest’s Operating Margin
Over the past four quarters, Pinterest retained 5.6 cents of operating profit from each dollar of its $4,680 million in revenue. Five years earlier, the company kept 14.4 cents. Closing that gap would be worth about $412 million a year.
Gross margin barely moved, coming in at 79.0% over the past four quarters against 78.8% five years earlier. The money is lost further down the income statement, absorbed by what Pinterest spends to run and grow the business. Stock-based pay represents one of those costs. That expense came to $1,078 million over the past four quarters, compared with $362 million five years earlier.
Your first goal would be to return the operating margin to where it stood five years ago.
Pinterest Keeps Adding Users
Pinterest ended fiscal Q3 2026 with 661 million monthly active users, a 10% increase from a year earlier. Management said users grew in every region. The company’s largest market is also expanding, with revenue in the U.S. and Canada reaching $894 million in the quarter, up 14%.
Management is also steering that audience toward shopping. Roughly 80% of searches on Pinterest Assistant, its AI assistant now generally available in the U.S., are commercial. That compares with about half across the rest of Pinterest. For anyone running Pinterest, the users are already there, and the work lies in earning more from each of them.
Pinterest’s Sales In Europe Stalled
In fiscal Q3 2026, Pinterest generated $193 million of revenue in Europe, roughly flat from a year earlier. Management said a pullback by cross-border sellers after a change in EU rules removed roughly 11 points from Europe’s growth. That impact was greater than the company had anticipated.
Management expects that pullback to keep weighing on international revenue growth, and it guided fiscal Q4 2026 revenue growth of 8% to 12%, against the 11.9% Pinterest reported for fiscal Q3. The 10% midpoint of that range sits below the Q3 rate. Management also said growth in its core European business, which leaves out cross-border sellers, has picked up again so far in Q4. Europe is the second fix, and part of the problem there came from a rule change outside Pinterest’s hands. The part Pinterest controls is how it sells abroad, and management said it sees early signs that its international go-to-market changes are taking hold.
What You Would Keep, And A Hard Buyback Call
The asset to protect is cash. Pinterest produced $1,262 million of free cash flow over the past four quarters. That amounts to 27 cents of every dollar of revenue, compared with 11.9 cents at Meta Platforms.
The hard call is what to do with that cash. Over the same four quarters, Pinterest spent $2,893 million buying back its shares, an amount exceeding what the business produced. Its debt stood at $1,196 million at the end of September, compared with $189 million five years earlier, though Pinterest still holds more cash than debt. If you ran Pinterest, you would have to decide whether buybacks should keep running ahead of the cash coming in.
Pinterest stock trades at 2.3 times sales, matching its lowest at any quarter end since June 2019. That price looks like a bet that the margin stays where it is. Pinterest’s operating margin is the number to watch when the company next reports, expected in February 2027.
What Would Selling Pinterest Cost You In Tax?
If you bought long ago, selling can bring a large tax bill, and holding keeps all the risk. A free 30-minute strategy review with our partner advisory firm covers a floor under a large position and a lower-tax way out.
Spot an error or want more like this? Tell us in 10 seconds.