Good day, ladies and gentlemen. Thank you for joining today's Pinterest Third Quarter 2025 Earnings Conference Call. My name is Tia, and I will be your moderator for today's call. I would now like to pass the call over to your host, Andrew Somberg, Vice President of Investor Relations and Treasury. Please proceed.

Good afternoon, and thank you for joining us. Welcome to Pinterest's earnings call for the third quarter ended September 30, 2025. My name is Andrew Somberg, and I'm Vice President of Investor Relations and Treasury for Pinterest. Joining me on today's call are Bill Ready, Pinterest's CEO; and Julia Donnelly, our CFO. This conference call is being webcast, and we are also providing a slide presentation to accompany our commentary. Please refer to our Investor Relations website at investor.pinterest.com to find today's presentation, webcast and earnings press release. Some of the statements that we make today regarding our performance, operations and outlook, may be considered forward-looking and such statements involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially. In addition, our results, trends and outlook for Q4 2025 and beyond are preliminary and are not an assurance of future performance. We are making these forward-looking statements based on information available to us as of today, and we expressly disclaim any duty or obligation to update them later unless required by law. For more information about assumptions, risks, uncertainties and other factors that could affect our results, please refer to our most recent Form 10-Q and Form 10-K, each filed with the SEC and available on our Investor Relations website. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures is included in today's earnings press release and presentation, which are distributed and available to the public through our Investor Relations website. Lastly, all growth rates discussed in today's prepared remarks should be considered year-over-year unless otherwise specified. And I'll now turn the call over to Bill.

Thanks, Andrew. Good afternoon, and thank you for joining our third quarter 2025 earnings call. Q3 marks another quarter of strong execution against our multiyear strategy and long-term financial targets. Over the past few years, we've transformed Pinterest from a platform of window shopping, where users often found that all the stores were closed, into an AI-powered visual-first shopping assistant. We are digitally replicating the joyful experiences of walking the bazaar or working with a great salesperson in your favorite boutique while seamlessly enabling our users to take action. In an evolving competitive environment, Pinterest continues to distinguish itself as a destination for our users and a vital partner for our advertisers. To illustrate this point, nearly 85% of our users come directly to our mobile app, meaning we're not reliant on search engines or other third parties for traffic. We reached 600 million monthly active users in Q3, marking our ninth straight quarter of record-high users with particular strength in Gen Z. Gen Z is our largest, fastest-growing cohort, comprising over 50% of our user base and represents the next generation of users and shoppers, who are influential tastemakers, content creators, and a lucrative audience for advertisers to reach. This momentum is also evident in key markets, with our U.S. and Canada MAUs reaching 103 million, the highest level on our platform in the last 4.5 years. Importantly, 100% of our reported users are logged in, giving us valuable first-party intent signals that provide an unparalleled view into consumer tastes and preferences, which powers our recommendation engine and creates an even better user shopping experience. This combination of scale and intent continues to fuel our financial performance, with Q3 revenue growing 17% year-over-year to $1.049 billion, proving our role as a trusted partner to brands and agencies across the world. Not only has our platform become a destination for shopping, we've also increasingly become a destination for search, in particular, visual search. Today, there are approximately 80 billion monthly queries across Pinterest, split between related items and other forms of visual search and traditional text-based searches. In Q3, all of these individual query types grew year-over-year on the platform. Overall, queries per user also grew year-over-year as we deepen engagement per user and users search more often on Pinterest. Related items and other forms of visual search are by far the largest source of queries and on our latest visual search features, inquiries grew the fastest at 44% year-over-year in Q3. These trends help to highlight how our AI investments are elevating our visual search capabilities and the relevance of our shopping recommendations. As a result, we are driving more of our engagement towards visual search, an area where we have a distinct right to win and is aligned with the visual inspiration and discovery that our users have come to expect from Pinterest. At the same time that we found our best product-market fit with users, we've also built a performance ad platform that harnesses our users' commercial intent and AI-driven automation to improve performance and simplify campaign creation for our advertisers. As a result, we've grown outbound clicks to advertisers by 40% year-over-year in Q3 and by more than 5x over the last 3 years. We have also broken into performance budgets, including achieving 5% to 10% share of total ad spend for some of the world's largest, most sophisticated advertisers. Through continued product innovation, we see meaningful runway to expand our share of wallet with these large advertisers while also growing with smaller mid-market advertisers through continued improvements to our AI-powered automation suite, Pinterest Performance+. International markets also remain significantly undermonetized, creating clear opportunities to increase monetization over the next several years across multiple growth levers. With these foundations in place, we see a clear path to sustainably grow our business and expand our market share. AI is the heart of the Pinterest experience, working continuously in the background to understand our users' evolving tastes and preferences. Unlike chat or search platforms that wait for users to type a prompt, our AI is proactive. It anticipates what users will love next, curating a fresh feed of personalized recommendations that are ready the moment they return, advancing their commercial journeys without the user having to ask, which is effectively the promise of agentic experiences. This is the magic of Pinterest, delivering a world of inspiration and individualized AI-assisted shopping for each user. In effect, this has made us an AI-powered shopping assistant for our 600 million monthly active users. Importantly, through this experience, we are acting as a true partner to our advertisers. We don't disintermediate their traffic. We provide our users a seamless journey from visual discovery directly to the advertiser's product checkout page, helping our advertisers gain a customer, not just a transaction. This entire ecosystem is built on our core competitive advantage: a deep understanding of user taste, intent, and product associations. Our AI is trained on billions of first-party signals from hundreds of millions of people actively curating and buying, which builds our taste graph. This unique first-party data then trains our AI to recommend deeply personalized and relevant content, often before users can even articulate what they're looking for. This creates a powerful feedback loop. As we provide more value to our users by surfacing what they are looking for, they engage more deeply, further enriching our data and strengthening our ability to recommend relevant content. This May, we launched a significant enhancement to visual discovery on Pinterest, our first-ever multimodal search experience, starting with women's fashion. This upgraded feature allows users to refine searches with more precision than ever by using both image and text inputs. Powering this experience is a proprietary in-house multimodal model trained on Pinterest's vast and unique data set, which is 30% more effective at identifying and recommending relevant content from our corpus compared to leading off-the-shelf models. Now we're testing ways to expand multimodal search and bring AI to the foreground of the user experience with the launch of our new Pinterest Assistant. With Pinterest Assistant, we are fundamentally enhancing the discovery journey on Pinterest by transforming pure text-based search into a voice-activated conversational assistant. Now users can move beyond simple keyword text inputs to describing open-ended, complex questions and commands like, 'What outfits might match this theme,' and 'Make these home decor ideas brighter and with a modern layout.' Our AI technology services real-time inspiration that takes these conversational descriptors, runs them through our AI fine-tuned with our first-party signal, and surfaces shoppable products from our catalog. Additionally, by translating natural language queries to curated visual results, we are also able to capture more nuanced commercial intent, providing us valuable signals to drive further personalized recommendations. We just began a beta rollout of Pinterest Assistant to a small set of test users in the U.S. We're excited about the opportunities that multimodal search can unlock, and we'll continue to test this product over the coming quarters, seek user feedback, and expand access to a broader set of users over time. AI is also being integrated to help move users through their commercial journeys in ways that are unique to Pinterest. A recent example is with boards. As I've discussed in past quarters, boards are at the heart of a user's inspiration-to-action journey and a superpower of our platform. Hundreds of millions of our users actively save to 15 billion boards, organizing every aspect of their lives and creating an intent signal found nowhere else in the Western world. Importantly, users who use boards are more likely to revisit, less likely to churn, and more likely to have deep sessions. Now we're using AI to make boards even more inspirational and shoppable, helping users move seamlessly from discovery to decision. In the coming weeks, we will be introducing new trends and brands to our UCAN users with a new feature called Boards Made for You. This feature brings timely curated collections of fresh and personalized content right into the home feed, with the goal of driving more frequent visitation and curation, introducing relevant shopping recommendations. With a blend of AI-driven recommendations and expert human curation, we're delivering personalized boards that help users discover new trends for them, see what others with similar styles and interests are loving each day, and shop personalized weekly outfit ideas. As part of our Q4 holiday go-to-market efforts, we're also launching the holiday edit, consisting of hundreds of new expert-curated gift guides spanning 17 categories, including fashion, home, food, beauty, travel, parenting, and technology. These shoppable boards feature gift ideas selected by celebrities in the know and Pinterest experts who understand exactly what to buy for every taste and budget. Through these initiatives, we're driving value for our users that they can only find on Pinterest, which in turn drives better engagement on the platform. Our commitment to enhancing the user's journey from inspiration to action creates a powerful full-funnel opportunity for advertisers. It allows them to connect with consumers at every stage, especially during the critical discovery phase where users have high commercial intent but don't yet know exactly what they want to purchase. To that end, we recently launched a number of ad formats geared towards connecting users to shoppable products. For example, we recently launched top-of-search ads, now in beta in all monetized markets. These ads appear directly within the top 10 search results and in related pins, ensuring that the brand's products are visible for shopping journeys that most often begin ahead of the competition. Since 45% of clicks occur in the top 10 search results, this placement is highly valuable. Our testing shows an average click-through rate of 29% higher for top-of-search ads compared to standard campaigns and a 32% higher likelihood of attracting new users who haven't seen or engaged with the brand's ads in the past. For example, Tractor Supply Company leveraged top-of-search ads and in an A/B test saw a 129% increase in click-through rates versus their catalog benchmarks. Last quarter, I highlighted our significant opportunity to enable new seamless shopping experiences across various categories on our platform. As part of that effort, we announced our new partnership with Instacart, which enables Pinterest ads to become directly shoppable via Instacart, allowing users to complete a purchase in just a few clicks. In September, we further expanded this functionality, which brings actionability to CPG advertisers with the launch of 'Where to Buy Links.' Where to Buy Links make standard ads instantly shoppable by surfacing multiple in-stock retailer options for a single product directly from an ad, all while allowing advertisers to receive valuable purchase intent data. With one tap, shoppers can view retailer options and choose their preferred one to complete a purchase. In September, we also launched local inventory ads, where retailers can display real-time prices for in-stock items within a shopper's local store radius, adding a layer of convenience and actionability for users who want to know what's available nearby. These new ad formats are complemented by our ongoing focus on Pinterest Performance+, where we continue to drive adoption, increase functionality, and enhance bidding capabilities through features like ROAS bidding and subsequently drive increased advertiser spend. We're excited about the performance that Pinterest Performance+ is delivering for advertisers, particularly Pinterest Performance+ campaigns, our AI-powered suite of automated ad products designed to boost campaign performance by simplifying setup and optimizing delivery across objectives. Pinterest Performance+ campaigns bundle a la carte features like P+ bidding, P+ targeting, and P+ budgets into one suite to help advertisers reach the right audience and drive better results with 50% fewer inputs related to setting up a campaign. Just one year since launching into general availability, we're extremely pleased with our progress and the performance we're driving for advertisers. For example, retail advertisers that spent on Pinterest Performance+ campaigns have, on average, seen a 24% higher conversion lift than those spending only on traditional campaigns. Additionally, Performance+ campaigns are also helping us deepen performance across a wide range of advertiser segments. Last quarter, we talked about how our Pinterest Performance+ campaigns were seeing a particularly strong product-market fit amongst our mid-market, enterprise, and smaller advertisers, as these advertisers value automated and simplified ways to optimize their campaign performance on our platform. We continue to see the highest adoption of this tool amongst our smaller and mid-market managed advertisers, who range from tens of millions to upwards of $100 million in annual gross merchandise value. As these advertisers adopt Performance+ campaigns, we are seeing them spend more on the platform. Among our mid-market and smaller managed advertisers, Performance+ campaign adopters exhibited, on average, a 12% higher monthly growth rate in spend on Pinterest post-adoption when compared to non-adopters. While this cohort of smaller and mid-market advertisers represents approximately 15% of our revenue today, we see significant opportunity to continue to increase our share of wallet with this segment of advertisers. We also continue to add new features and functionality to the Pinterest Performance+ suite. In Q1 2025, we launched Performance+ ROAS bidding, which provides more granular bidding functionality for advertisers and optimizes conversion value, not just the volume of conversions. This is particularly impactful for advertisers that have a large catalog of varying price points. And while we are only two quarters into general availability of ROAS bidding, we're seeing promising early adoption. Globally, 22% of our lower funnel retail revenue now flows through ROAS bidding. And notably, as we drive adoption, we're increasingly seeing advertisers place bids against a greater portion of their catalog. In Q3, the number of unique shopping SKUs with a paid ad impression grew more than 100% year-over-year, and advertisers using ROAS bidding contributed the entirety of that growth. Lastly, we continue to enhance our Pinterest Performance+ suite and be responsive to advertiser feedback. As an example, advertisers have requested additional transparency regarding the audiences their Performance+ campaigns are reaching to supplement the performance metrics they already receive. As a result, we recently launched enhanced new reporting functionality in ads manager, offering detailed audience breakdowns, including age, gender, and approximate location. In short, just over a year since launching Pinterest Performance+, I am proud of the value we've delivered for advertisers, with meaningful opportunities still ahead of us. Now I'll turn to our international opportunity. International monetization represents one of our largest, most durable growth vectors, and we're still in the very early innings. Today, we have roughly 500 million MAUs outside of UCAN, or 83% of our global users, evidence of our strong global awareness and product-market fit with our users. However, these users represented just 25% of global revenue in Q3 2025, reflecting our historical monetization focus on UCAN. While we continue to see opportunities to drive growth in UCAN, this imbalance creates the upside we're now beginning to unlock as we scale proven playbooks across our Europe and Rest of World regions and integrate more deeply with the advertising ecosystem in each of these regions. Our go-to-market approach is region-specific. In Europe, we lead primarily with our first-party sales team to serve advertisers directly. We're also focused on strengthening our relationships with agencies that manage and deploy much of the digital advertising spend in this region and who we view as vital partners in the ecosystem, as well as integrating with marketing tech partners who help advertisers manage their creative and campaigns. In the Rest of World, we've deployed a hybrid model that blends our direct sales force in select markets, reseller partners in over 40 countries, and incremental third-party ad demand, allowing us to effectively scale growth in longer tail markets that were previously unmonetized or significantly undermonetized. Critically, we're exporting what already works in UCAN while localizing the implementation. Our lower funnel playbook focuses on increasing uploads of product catalogs and driving adoption of shopping ad formats and privacy-centric measurement. We couple that with Pinterest Performance+ to simplify campaign creation and improve outcomes for our advertisers. The result is a consistent, measurable path for advertisers to see performance and scale their spend on Pinterest. As an example, Pandora, a leading European-based global jewelry retailer, leveraged many of Pinterest's best practices, including the adoption of Pinterest Performance+ across 100% of their lower funnel spend in existing markets, which drove ROAS lifts across their campaigns. Additionally, Pandora adopted our conversion API, driving nearly a 36% increase in ROAS, and after implementing offline conversions, drove a 148% increase in ROAS across priority markets. International advertisers leaning into our shopping ad formats has been one of the clearest indications that our lower funnel playbook is resonating across the globe. Two years ago, at our Investor Day in September 2023, shopping ads represented just 9% of international revenue. In Q3 2025, it reached 30%. In fact, Q3 shopping ad revenue in both Europe and the Rest of World grew over 2x faster than the overall revenue growth of their respective regions. Despite this progress, we see significantly more opportunity to both activate and grow our share of wallet with international advertisers, particularly with the most sophisticated European and Rest of World advertisers, where we are currently underpenetrated. It's still early, but we're making tangible progress narrowing our international monetization gap as measured by international ARPU relative to UCAN. Overall, I'm extremely proud of our team and the progress we are making across a number of initiatives. Pinterest is growing users across all the generations and geographies we track and has become a destination. Importantly, we're also growing queries, board creation and clicks to advertisers faster than users, meaning we're deepening engagement per user across the dimensions we want, even as users have more alternatives than ever for search. With that, I'll turn the call over to Julia to share more details about our financial performance.

Thanks, Bill, and good afternoon, everyone. Today, I'll be discussing our third quarter 2025 financial results and provide an update on our preliminary fourth quarter 2025 outlook. All financial metrics, except for revenue, will be discussed in non-GAAP terms unless otherwise specified, and all comparisons will be discussed on a year-over-year basis unless otherwise noted. Now let's start with our third quarter results. We ended the quarter with 600 million global monthly active users, or MAUs, growing 12%, our ninth consecutive quarter of record high users. We continue to demonstrate user growth across all of our geographic regions. In Q3, our U.S. and Canada region had 103 million MAUs, growing 4%; our Europe region had 150 million MAUs, growing 8%; and in the Rest of World markets, we had 347 million MAUs, growing 16%. Shifting to revenue. In Q3, our global revenue was $1.049 billion, up 17% on a reported basis and 16% on a constant currency basis. We saw strength across our conversion and awareness objectives. Across verticals, we continue to see strength led by retail as well as by smaller, faster-growing categories on our platform, including telecom and entertainment. We also continue to see a normalization within CPG, driven largely by our food and beverage subvertical. Turning to our geographical breakouts for Q3. In the U.S. and Canada, we generated $786 million in revenue, growing 9%. Strength came from retail, CPG, telecom, and entertainment. In Europe, revenue was $193 million, growing 41% on a reported basis or 34% on a constant currency basis. Strength in Europe was driven by retail. Revenue from Rest of World was $70 million, growing 66% on a reported basis or 65% on a constant currency basis. We're pleased to deliver the strong 17% third quarter revenue growth which exemplifies our multiple ways to win that I've spoken about for many quarters. We continue to diversify our business across geographies, grow long-standing as well as new advertiser verticals, and begin to deepen our share with mid-market and smaller advertisers. We did face pockets of moderating ad spend in UCAN in Q3 as larger U.S. retailers navigate tariff-related margin pressure in the current environment. However, as Bill noted, we also saw accelerating strength across our international geographies in Q3, as we have begun to successfully export our lower funnel playbook around shopping. In Q3, overall ad impressions grew 54% while ad pricing declined 24% year-over-year. The primary driver of the continued strong growth in ad impressions and corresponding decline in ad pricing continues to be the growing mix shift from ad impressions in previously unmonetized or undermonetized international markets, which carry lower ad pricing than our more mature markets. Moving to expenses. In Q3, cost of revenue was $206 million, up 13% year-over-year and up 5% versus Q2 due to increased infrastructure spend related to our user and engagement growth. Our non-GAAP operating expense was $543 million, up 15%. The increase was due to investments in sales and marketing and R&D, as we continue to invest in headcount to support our AI and other product initiatives as well as our sales force. Our revenue growth, combined with our disciplined approach to cost, led to another strong quarter of adjusted EBITDA coming in at $306 million, a margin of 29%. Adjusted EBITDA margin expanded 170 basis points versus Q3 last year and helped to deliver Q3 free cash flow of $318 million. This speaks to the inherent profitability of our business and highly cash-generative nature of our model, with over 90% of our adjusted EBITDA converting to free cash flow over the trailing 12 months. We ended the quarter with cash, cash equivalents, and marketable securities of $2.7 billion. As a reminder, we've previously discussed the four pillars of our capital allocation framework, which remain unchanged. First, investing in product and technology innovation; second, balance sheet optimization; third, preserving flexibility for opportunistic and disciplined M&A; and fourth, dilution management. To that end, as part of our ongoing efforts to mitigate dilution from employee stock-based compensation, in Q3, we allocated $199 million towards share repurchases and $115 million toward net share settlement of equity awards, thus bringing fully diluted share count roughly flat year-over-year. Now I'll discuss our preliminary guidance for the fourth quarter. We expect Q4 revenue to be in the range of $1.313 billion to $1.338 billion, representing 14% to 16% growth year-over-year. Our guidance assumes the impact of foreign exchange to be approximately 1 point of tailwind based on current spot rates. Moving down the P&L, we expect Q4 2025 adjusted EBITDA to be in the range of $533 million to $558 million. We anticipate Q4 2025 non-GAAP cost of revenue to grow sequentially from Q3 2025 by high single-digits percent. Within Q4 non-GAAP operating expense, our primary area of investment will continue to be headcount growth within R&D to support our efforts in AI and other product initiatives as well as our global sales team. Our Q4 adjusted EBITDA guidance confirms that we will continue to expect adjusted EBITDA margin expansion in the second half of 2025. Consistent with our commentary on our last earnings call, the level of expansion in the second half will be lower than the more elevated expansion we delivered in the first half of 2025, as we continue to invest in revenue-driving initiatives. Overall, we are pleased with our progress in 2025 towards our long-term adjusted EBITDA margin targets and our ability to continue generating significant free cash flow. In closing, I'm proud of our team for another strong quarter as we continue to deliver for our users and advertisers. With that, I'll hand it over to Bill for some final words.

Thanks, Julia. I want to thank our teams at Pinterest, our advertising partners, and all the people that come to Pinterest to find inspiration and take action. And with that, we can open the call up for questions.

The first question comes from the line of Ron Josey with Citigroup.

Great. Bill, a bigger picture question for you, and then Julia, I had one for you. Bill, on the future of e-commerce, I would love to get your thoughts on agentic commerce, agentic search, and how everything is evolving here. And specifically, Pinterest's opportunity and strategy given its evolving landscape and then clearly with the launch of Pinterest Assistant? And then, Julia, I think you mentioned some pockets of growth in UCAN given tariffs. I am wondering if this continued or if things have normalized since then.

Thanks for the question, Ron. One of the things I’m really proud of when I look at our results, especially over the last three years, is the strong user growth we’ve seen, with nine consecutive quarters of record high users. Shopping has been central to the resurgence of our platform. We’ve effectively positioned ourselves as an AI-driven shopping assistant, as I mentioned earlier. To elaborate on your question about agentic, Pinterest is proactive; it anticipates what users enjoy without them needing to ask. This is the essence of agentic: our AI works on behalf of the user without them having to provide direction. Users experience this consistently on Pinterest, and it fosters deeper engagement, as we understand their style, taste, and preferences so well that they receive great new recommendations from our AI-driven systems every time they use the app. We’re enhancing these experiences, as demonstrated by the recent announcement of Pinterest Assistant. We’re not just standing still; we will continue to advance this initiative, focusing on our strength in a visual-first experience while integrating more AI features. Our goal is to guide users through their decision-making process, which we believe is the most impactful aspect of agentic. From a purchasing perspective, we provide excellent buying experiences. For instance, we offer push-button purchasing through Amazon-linked accounts that millions of users are taking advantage of today. If users express a desire for AI to manage purchases on their behalf, we could implement that easily. However, we believe that our real differentiation lies in how we guide users through their commercial journey every time they return to our app. It’s also important to highlight that, despite the rise of various AI platforms, we have achieved nine consecutive quarters of record users while also deepening engagement across key metrics, including search, where we’ve seen a 44% increase in queries on our latest visual search features. This clearly shows that we’ve established a unique position in the market. When considering the broader promise of agentic—AI supporting users throughout their journeys—our monthly active users have surpassed 600 million, making Pinterest a particularly popular destination with something unique to offer. On the cost side, it’s crucial to recognize that our alignment of AI with effective monetization continues. The cost implications involve aligning the assistant with our monetization strategies, optimizing search results that are commercially advantageous. We utilize our proprietary, efficient models that perform exceptionally well, with every pin served today driven by this model, which is already embedded in our cost structure. We constantly conduct side-by-side tests between leading off-the-shelf proprietary models and open-source models, and we’re finding that open-source models provide excellent performance for our visual AI use cases. In light of current market rates and per-token costs from early tests, we’re observing significant cost reductions with comparable performance from fine-tuned open-source models compared to leading proprietary models. Looking ahead, we believe open-source can be applied to even more use cases at a fraction of the cost compared to larger model providers. Overall, we feel very positive about the value we’re delivering to users while effectively managing monetization and controlling costs.

And then, Ron, the second part of your question, I'd say overall, with respect to Q3, the quarter played out largely as we expected. In addition, we saw some of the pullback from some U.S. retailers' spend from Asia-based e-commerce players in the U.S. was down year-over-year again in Q3, though relative to Q2, we did see a partial recovery there. As we think about guidance for Q4, our Q4 guidance range is one point lower than our guidance range was for Q3 as we see these broader trends and market uncertainty continuing, with the addition of a new tariff in Q4 impacting the home furnishings category. So I think overall, we still feel really good about our mid- to high teens kind of revenue growth targets over the medium and long term and the durability of our revenue growth. There are several areas of momentum in our UCAN business that continue, that you've seen over the last several quarters. So one of those has been momentum in emerging verticals, also momentum in smaller and mid-market advertisers, and then some of the international opportunity that Bill touched on in his prepared remarks. To put this into perspective, some of these emerging verticals in the U.S., like financial services, is nearly a $40 billion digital ad category in the U.S. We estimate that we have less than 0.5 point of market share there, and that category has been growing really nicely for us for some time. We expect this to translate into further share gains in this and other emerging verticals like travel, entertainment, and telecom. Likewise, smaller and mid-market advertisers today represent only 15% of our revenue, as our priority has been to solve the needs of larger enterprise advertisers first. But we're seeing nice tailwinds as these smaller and mid-market advertisers adopt Performance+ campaigns, and we plan to continue to invest more into growing this segment. So while all these initiatives continue to play out over time, and we expect them to take time to play out, we're confident we have the right playbook to drive further growth, including in UCAN moving forward.

The next question comes from the line of Eric Sheridan with Goldman Sachs.

Maybe building on that answer, just Bill, can you characterize more broadly the digital ad environment that you find yourself operating in representing Q3 what you just reported and sort of the building back of Q4? And Julia gave some really good color there with respect to UCAN. Can you characterize what you're seeing in UCAN relative to the rest of your operations globally against that broader ad environment?

Thanks, Eric. We're pleased with another strong quarter in Q3 at 17% revenue growth. And as I'm sure you've noted, we've been quite consistent in our growth and in line with the long-term targets for revenue and margin that we laid out at our Investor Day two years ago. So we continue to feel good about that mid- to high teens revenue growth target over the long term that we laid out at Investor Day and our ability to consistently deliver. It's also really important to note, and this gets to your sort of question on the broader environment. It's also important to note that we grew 17% despite operating in an environment where some of our largest retailers in UCAN pulled back spend across the industry, not specific to us, a pullback across the industry as they navigated tariff-related margin pressure. We think that's disproportionately impacting large retailers, but that is a segment that we have more exposure to than other platforms given our focus on shopping, though we continue to grow in other verticals and segments of the market in addition to those. Additionally, as advertisers are adopting AI-driven platforms, there's a next level of optimization in the AI ad platforms that's taking place right now, where bidding is getting further aligned to advertisers' measurement sources of truth and more events that lead up to a conversion are being incorporated. We think that presents an upside opportunity moving forward. We began that journey earlier this year with ROAS-based bidding, and we've seen good results there. For example, after launching ROAS bidding in Q1, we saw a 100% increase in shopping SKUs with paid ad impressions across the platform in Q3. And has driven entirely by ROAS bidding adopters, as I noted in my remarks, and more of those advertisers are uploading greater portions of their product catalog. We've talked about that opportunity to get deeper into the catalog even of our largest advertisers. We think this will continue to help us do more of that. Going forward, we see meaningful potential to expand further into AI-based optimization of other events that are valued in advertisers' measurement sources of truth. And while many advertisers have adopted these solutions first with the larger platforms as typical of the adoption cycle, we are testing this with some of our largest partners, and we're seeing really good early results. Certainly, more of that is in front of us than behind us. But the good news is that the alignment of AI bidding with the advertisers' measurement source of truth is market expanding. I think we've already seen that reflected in some of the larger platforms and what they have been out in the market with. And that tends to give more credit to events leading up to a conversion, such as view-through attribution, which should be good for a full-funnel platform like Pinterest. So this should accrue to our advantage in future quarters as we continue to roll out those features that are very early on our platform now, but we are seeing good early results. And through our broader deployment of these additional Performance+ solutions in 2026, we think there's continued opportunity there. So we know we're driving performance for advertisers. Clicks to advertisers increased 40% in Q3, and clicks to advertisers outpaced revenue in all of our reported geographies. In fact, clicks to advertisers were up over 5x over the last 3 years. But clearly, we have more to do to get proper credit for that performance.

The next question comes from the line of Rich Greenfield with LightShed Partners.

You mentioned a feature that lets users remove AI content. The key question is how do you differentiate between AI-generated content and non-AI content, and what led to this decision? Many of your competitors seem to be embracing AI content because it helps increase engagement and ad sales, while it appears you are taking a different approach. I'm interested in understanding your reasoning behind this strategy and how it all functions.

Thank you for the question, Rich. It's a good point you've raised. We believe that content created by Generative AI is a strong advantage for our platform, and we are fully embracing it. A crucial aspect of this is ensuring content quality, which we primarily manage through our recommendation systems while also allowing users to express their preferences. Some users prefer less AI-generated content, so we provide them with options. This is similar to past trends in content expansion, such as the rise of online videos or photography with smartphones, where initial quality fluctuations occurred due to higher volumes of content. By utilizing effective recommendation systems, we can distinguish between high and low-quality content and offer users the best options from the growing pool of AI-generated content. Our platform's engagement metrics suggest we are successfully navigating this influx and delivering relevant content to users. Additionally, we allow users to give us immediate feedback when they want to see less AI content. Some users may be looking for specific and practical information, such as architectural images, and they prefer real photographs over AI creations. We anticipate that, as our quality filters improve, user acceptance of AI-generated content will grow. Overall, we recognize Generative AI content as a considerable asset already, and our main focus is enhancing content quality while providing users with tools to decide what they want to see. Regarding the identification of AI-generated content, no platform can accurately detect 100% of it. We have industry-level tags and analyze metadata for indications, which is why we allow users to choose to see less AI-generated content rather than none at all. Over time, it is likely that nearly all content will be edited using AI in some form. Historically, people once objected to photoshopped images, but today, most visual content has undergone some editing, as filters and similar adjustments have become accessible to everyone. We believe that, in the future, almost all content will have some degree of AI modification, and it will ultimately focus on content recommendation and quality. In the meantime, we are prioritizing user choice and honoring their preferences.

The next question comes from the line of Shweta Khajuria with Wolfe Research.

I was wondering if you could please talk about your relationship with Magnite and more broadly about your efforts to add new sources of demand and perhaps timeline around that?

Thanks for the question, Shweta. We've been very consistent from the beginning as we think about our programmatic and third-party strategy. Our first-party ad demand continues to be the primary driver of our growth, with third-party demand really complementing and rounding out our auction when there may be gaps in the auction. With respect to Magnite, when we announced that, we said it would take time to integrate, test, and do more fulsome go-to-market. We're still working through that testing now, and we're in the early days. Today, most of our efforts have been with respect to third-party focused on bringing on new sources of demand on the platform, as many of these programmatic budget pools are large and new to Pinterest today. So we continue to see that consistently with how we have before. But I would also call out that there's a next potentially meaningful opportunity that we're also starting to look at that we think we bring a unique audience to these budget pools given the high intent nature of our audience and the visual discovery that uniquely occurs on Pinterest. So as a result, we're also starting to explore very early testing how valuable our audience could be even beyond our own platform. When you think about the very strong commercial intent that we see with our users, obviously, we satisfy a lot of that commercial intent on our platform, but we think that could be helpful beyond our platform. So we're in the very early days of testing that.

The next question comes from the line of Mark Kelley with Stifel.

Bill, I appreciate the extra color on Performance+ tonight. I was hoping maybe we could drill into the SMB and kind of mid-market opportunity just a little bit more. I know you threw out that 24% higher conversion rate. Is that pretty standard, whether you're a smaller advertiser versus a more sophisticated and larger brand? And then second, maybe just to clarify, the 10% to 15% of revenue running through P+, was that just an SMB and mid-market stat? And where might that go over time?

Thank you for the question, Mark. We are very pleased with how well Performance+ is performing, especially considering we are less than a year into its deployment, while larger platforms have been rolling out similar solutions for many years. As we reach year-end, we are thrilled with the progress we’ve made. The AI-enabled automated features in our campaign bundles are significantly improving performance and reducing the inputs, with a reduction of 50% in inputs. For instance, retail advertisers using Performance+ campaigns are experiencing a 24% increase in conversion rates compared to traditional campaigns. This is particularly beneficial as we reach out to smaller and mid-sized advertisers, who appreciate the value of automation. For this segment, adopters of Performance+ campaigns see a 12% higher monthly revenue growth rate compared to those who do not adopt, and about 15% of our revenue in this segment is growing nicely. There is considerable opportunity to increase our share of wallet in this market segment, which larger platforms have leveraged more effectively so far. We believe Performance+ is a significant opportunity for us and is achieving the desired impact, with a lot more potential ahead of us. Regarding the larger segment, the ROAS bidding strategy is enabling us to explore our largest retail catalogs in greater depth. I mentioned that it accounts for 22% of retail lower funnel revenue across both enterprise and SMB. ROAS bidding is making a substantial impact by allowing us to reach many more SKUs. We aim to present ads that align closely with what customers seek, and gaining access to a larger portion of major retailers' catalogs on our platform greatly enhances this alignment. ROAS bidding, as a part of Performance+, has effectively doubled the number of SKUs receiving paid impressions on our platform. This is due to the capability of advertisers to fine-tune their bidding, supported by AI that adjusts according to variations in price and margin across different catalogs. We are seeing great progress here, but there is still a lot of potential to explore. When we think about our global opportunities, particularly in UCAN, we focus on three key aspects: first, expanding access to full catalogs from the largest retailers, facilitated by more refined bidding like ROAS bidding from Performance+. We have seen positive early results, but there's more potential to unlock. Second, the mid-market and SMB growth driven by Performance+, where we are just beginning to tap into the market, but are already seeing promising results. Finally, the AI-driven alignment of bidding with advertisers' measurement sources is providing clearer insights into full-funnel attribution and activities throughout the funnel. While larger platforms have fully executed this, we are in the early stages of testing with some of our major advertisers and are encouraged by the initial results. We believe this presents a significant opportunity for us in the coming year. I hope that provides further insight into our broader thoughts on Performance+.

The next question comes from the line of Ross Sandler with Barclays.

Great. Just want to bring Julia in on key investment priorities for next year. And how do we think about the pace of EBITDA margin expansion in '26 compared to the pace we're seeing in the second half of '25? And then, Bill, just a follow-up on the agentic question. So Walmart's integrating its catalog into ChatGPT for this checkout service. I know it's early days, but for something like that, do you view that as neutral, positive, negative in terms of where that kind of a marketer might move their Pinterest ad budget in the future? Is this going to help you guys or potentially create a new headwind? Any thoughts there?

Thanks, Ross. I'll take the first question. So it's still a bit too early to talk specifically about 2026 as we're still reviewing those plans internally. But stepping back, we still feel confident in the long-term margin targets that we provided in 2023. And at that time, just as a reminder, we said we would target a 30% to 34% adjusted EBITDA margin over a 3 to 5-year time horizon. So now here in 2025, we're already approaching 30% for the full year. So we've made a lot of progress already by growing the top line while investing thoughtfully, primarily in R&D, and to a lesser extent, the sales area as well. So looking forward, we continue to see many investment opportunities with high ROI, particularly across AI that power user experiences, including our new Pinterest Assistant, which we believe will help keep us on the leading edge in visual search and discovery, as well as ongoing investment in our performance ads platform. On the gross margin line, in aggregate, we expect cost of revenue next year to grow more in line with the business going forward, so there can be some variations quarter to quarter. And there are a few factors at play there that I'll call out. Cost of revenue, which is mostly our infrastructure costs, will naturally rise, of course, due to ongoing user and engagement growth. Additionally, we've previewed for multiple quarters now on several calls that we expect to see diminishing returns from the infrastructure cost optimization work that we've undertaken for the last two-plus years. Now partially offsetting this kind of natural upward pressure on cost of revenue is the fact that we're able to apply AI use cases sort of directly in service to monetization, where we see immediate revenue lift, right? So we're not rolling out new features and then planning to monetize them years later. They monetize right away as sort of our general philosophy. We're also being cost-efficient with our model usage, including, as Bill alluded to, utilizing open-source models where applicable that come at a meaningful reduction in costs. So, in summary, we continue to stand by our long-term adjusted EBITDA margin targets that we've always said, though the rate of adjusted EBITDA margin expansion would vary year-to-year. We've made a lot of progress towards these goals, and we'll continue to be thoughtful about how we invest moving forward as well.

And then following up on your agentic commerce part of the question, Ross. A couple of things I'd say. One is that for the largest retailers, we have catalog integrations. I shared how we're getting deeper into their catalog with our Performance+ capabilities and ROAS level bidding and things like that, getting much broader parts of the catalog available for ads. But we have those catalogs for organic shopping for push-button type buying and linked accounts. We have that with Amazon. We've had that for some time, and millions of users on Pinterest take advantage of that and have a great experience. So we feel really great about the shopping experience that we're providing. And I think overall, I would just say it's worth noting that there's an expansionary moment happening with search generally. And I think users, just as I did in an app-driven world, are thinking about different places to go for different types of experiences. Traditional search was always great for things like product research. I think broad-based chatbots are sort of the next evolution of that type of research-type shopping behavior if you're trying to figure out every attribute of the latest 4K Ultra TV or things like that. Search was always great for that, and then chatbots are even better for that. But we're solving a different type of shopping journey on Pinterest, really the more the 'I'll know when I see it' type problem. The best evidence I can share is that users think about these things as distinct and separate is that over the last couple of years as you've had an explosion of usage in AI chatbots, we've put up nine straight quarters of record high user growth, shopping being at the very center of that. We're taking a visual-first approach driven off the human curation that happens on our platform where we understand user style and taste and preference. We have a unique signal that is completely distinct from any place else in the Western world. That’s why we're able to do things like what we've showed on our latest multimodal visual search, where we're able to outperform the off-the-shelf models by over 34 percentage points on the relevance of shopping recommendations on our platform. That just gives you a bit of the kind of unique things we're able to do with users. And so I think, again, it's a market-expanding moment. Multiple players are growing simultaneously, and very clearly, we are one of those players that is growing, delivering a lot of value for users, a tremendous amount of shopping occurring on the platform. And a tremendous amount of searching is happening on the platform. I shared that in my prepared remarks—80 billion-plus monthly queries, the vast majority of which are visual in nature—which again gets to how we're doing something that's very different than traditional search or even what chatbots are doing. So hopefully, that helps contextualize that.

The next question comes from the line of John Blackledge with Cowen.

Great. PINS historically has had all of its infrastructure running through AWS. Given the move in recent years of companies shifting to multiple cloud vendors, how should we think about PINS potentially diversifying to other cloud platforms?

Thanks, John. So first, I'd say we view our infrastructure and platform as strategic assets that support our performance, reliability, and our AI roadmap. Amazon is a fantastic partner for us, to be very clear. But in the same way that we are constantly testing all the various LLMs and benchmarking different LLMs across one another, we're also constantly assessing the best infrastructure options for us as we move forward, especially in an AI-driven world. That infrastructure includes LLM, chip providers, and hyperscalers. So again, if you look at what we've done over the last few years, you've seen us put AI at the center of our business, effectively aligning that with the ability to monetize for users and deliver great results for users, and do so cost-effectively. Again, we've had great partnerships there. But the space is evolving rapidly, and we continue to pay really close attention to that and benchmark across multiple providers on each of those sort of layers of the stack. Hopefully, that's helpful.

This will be the last question from Michael Morris with Guggenheim.

Bill, you referenced a couple of times deepening engagement per user. And I'm hoping you can add some context to that. Are you talking about time spent per visit or frequency or some other metric? And do you see that as a leading indicator of reaccelerated growth in the UCAN market? And then secondly, on international, the growth there is significant. That has accelerated. How much runway do you see to continue to grow internationally at that elevated level? And maybe—you gave us a few drivers, but what do you see as the one or two key drivers as we look forward?

Yes. Thanks for the question, Mike. On the deepening engagement per user, we've talked about this very consistently over many quarters now is that we are deepening engagement per user across the areas we want, which are around search, curation, clicks, and actions. I shared a little more color on this call around the search behavior where we are getting more searches per user. So it's not just our searches are growing; we are getting more searches per user. We're seeing it in the ways that we want, particularly on where we are highly differentiated around our visual searches. Related items and other forms of visual searches drive the vast majority of that search behavior. But it is more searches per user happening on our platform even as we put up record high levels of users and also significantly growing actionability. I shared just how much the clicks to advertisers have grown 5x over the last 3 years; we're driving a tremendous amount of clicks to advertisers. So it is that great relevancy driving great recommendations that leads to actionability that leads to more users coming back for more searches and more actions like that is that flywheel is spending on the deepening user engagement. To your question around is that a leading indicator of monetization, I think absolutely yes. What I would say is that three years ago, Pinterest was pretty much upper funnel only. We've had a major transformation of the business, both in terms of user engagement, which, again, I think, continues to be the brightest spot in the business. Advertisers will always follow where users and commercial intent are. We've stood up a performance ad platform pretty much from scratch over the last couple of years. We are still a long way from having the capabilities of the very largest platforms. But even as we've made the basic capabilities of that available, we've really broken into those always-on performance budgets. We have a lot more to do there. With UCAN specifically, I shared those sort of three areas where I think there is significant opportunity around getting deeper into the full catalog of the largest retailers, mid-market and SMB that are driving a lot of growth across the broader market, but it's a newer area for us. The alignment of AI bidding systems and advertiser measurement gives a clear view of full-funnel attribution and events across the funnel. I think those are things that will help us capture more of the value that we're driving. I do think absolutely yes, it is generally true that user behavior is a leading indicator of where the advertiser dollars are going to follow. We have the largest platforms that are many years into their AI-driven ad systems; we are only a couple of years into ours. But because the user behavior is so strong, that's what really lets us make progress. And on the international side, as I shared in my prepared remarks, the playbook that we have used in UCAN, we are now exporting, and we're seeing that really take hold internationally. We are still early on in our work there. We have a lot more of that opportunity in front of us, but we're really pleased with the progress we've made and how it's starting to show results. As I noted in Q3, Europe ARPU grew 31%, while Rest of World ARPU grew 44%. We have a lot more to do. I shared in my remarks how shopping ads are really at the center of what's driving that. So it is that commercial intent commercial behavior. So a lot more of that to go, but it's working in UCAN and exporting well. And again, to put it in perspective, two years ago at our Investor Day in September 2023, shopping ads represented just 9% of international revenue. In Q3 of 2025, it reached 30%. So Q3 shopping ad revenue in both Europe and the Rest of World grew over 2x faster than revenue growth in their respective regions. So we believe there's many years of runway of continuing to grow ARPU as we increase product catalogs, adding additional ad demand, drive up relevance, and thus, our ability to take a bad load, certainly for international, but again this year, we think there's a lot more to do in UCAN as well.

Thank you. I will now hand the call over to Bill Ready, CEO, for any closing remarks.

Thanks again to all of you for joining the call and for your questions. We look forward to keeping this dialogue going, and we hope you enjoy the rest of your day.

That concludes today's conference call. Thank you. You may now disconnect your lines.