Pinterest hits first billion-dollar quarter as user base reaches new record

Pinterest achieved a significant milestone in its fourth quarter, reaching $1.15 billion in quarterly revenue for the first time since the company's founding. According to the earnings report released on February 6, 2025, this performance represents an 18% increase compared to the same period last year.

The social discovery platform demonstrated strong user growth, with global monthly active users (MAUs) increasing by 11% year-over-year to reach 553 million. According to Pinterest's financial statements, user growth was particularly strong in international markets, with Rest of World regions showing a 15% increase to 307 million MAUs.

The company's financial performance showed marked improvement across key metrics. According to the earnings report, Pinterest generated $900 million in revenue from the U.S. and Canada region, representing a 16% increase from the previous year. European revenue grew by 21% to $196 million, while Rest of World revenue increased by 44% to $58 million.

Pinterest Chief Executive Officer Bill Ready emphasized the company's transformation in user engagement metrics during the earnings call. According to Ready, the platform achieved its highest-ever weekly active to monthly active user ratio of 62% in 2024, indicating increased user retention and engagement.

The financial results revealed significant profitability improvements. According to the earnings statement, Pinterest recorded GAAP net income of $1.85 billion for Q4, including a one-time tax benefit of $1.6 billion due to the release of a valuation allowance against U.S. deferred tax assets. Adjusted EBITDA reached $471 million, representing a 41% margin and an increase of 320 basis points compared to the previous year.

The company's advertising business showed strong momentum. According to the earnings call transcript, clicks to advertisers grew by more than 90% year-over-year in Q4, even after comparing against strong growth in the previous year. Pinterest reported that ad relevance on its search surface has doubled over the past two years.

Chief Financial Officer Julia Donnelly detailed the company's expense management during the earnings call. According to Donnelly, Pinterest maintained strategic investment focus while exercising expense discipline, leading to a roughly 50% increase in adjusted EBITDA dollars year-over-year in 2024, with margins expanding by 510 basis points.

Looking ahead to the first quarter of 2025, Pinterest provided revenue guidance of $837 million to $852 million, representing projected growth of 13% to 15% year-over-year. According to the company's guidance, this forecast includes an anticipated two percentage point headwind from foreign exchange rates based on current spot rates.

The earnings report highlighted Pinterest's artificial intelligence investments. According to Ready, the company increased the context window on user actions fed into its AI-based models by over 30-fold in 2024, leading to improvements in user engagement metrics. The company reported that approximately 15% of its current code base is generated through AI.

Pinterest's international expansion continued to show progress. According to the financial results, the company launched resellers in 30 markets in Q3 2024. Rest of World revenue growth accelerated throughout 2024, reaching 44% year-over-year growth in Q4.

The company maintained strong cash flow generation, with free cash flow of $940 million for the full year 2024, representing a 55% increase from the previous year. According to the earnings report, this resulted in a free cash flow conversion rate of 91% relative to adjusted EBITDA.

Pinterest ended the quarter with $2.5 billion in cash, cash equivalents, and marketable securities. According to the financial statements, the company allocated $100 million toward share repurchases in Q4, bringing full-year 2024 share repurchases to $600 million for a total of 19.1 million shares.