Pinterest reported adjusted earnings per share (EPS) that missed analyst forecasts, while revenue growth slowed significantly in its core North American market, which accounts for more than 70% of total sales. The slowdown in advertising spending — particularly from retail and lifestyle brands — weighed heavily on investor sentiment ahead of the critical holiday season. Despite this, Pinterest reached a record 498 million monthly active users (MAUs), up from 482 million in the previous quarter, showing continued engagement momentum.
However, the key disappointment came from declining average revenue per user (ARPU) in North America. Monetization struggled to keep pace with user growth, with brand advertisers pulling back amid tightening budgets and uncertain macro conditions. Analysts said Pinterest’s heavy reliance on brand advertising, rather than performance-driven ads, made it more vulnerable to economic headwinds.
Pinterest’s management issued softer-than-expected holiday guidance, projecting slower sequential growth and warning that advertising demand may remain uneven. CEO Bill Ready said the company remains focused on improving shopping experiences and integrating video ad formats but acknowledged near-term pressures from weaker ad budgets. Several analysts, including those from Morgan Stanley and UBS, trimmed their price targets following the report, citing profitability challenges and execution risks.
Adding to market anxiety, Meta Platforms announced plans to spend between $70-$72 billion on artificial intelligence this year. The scale of AI investment reignited fears about industry-wide cost escalation and uncertain returns.
Facebook still leads as the largest social media platform with about 3.07 billion monthly active users worldwide. Instagram and WhatsApp each have approximately 3 billion monthly active users, showing substantial growth and engagement across global markets.WhatsApp, in particular, has expanded from 2 billion users in 2020 to 3 billion in 2025, becoming the leading messaging app in 26 countries with a strong presence especially in India, Brazil, and the U.S. Instagram continues to grow at a rate of about 8.3% year-over-year, driven by younger demographics and the popularity of Stories and Reels. The combined ecosystem of Facebook, Instagram, and WhatsApp accounts for a vast portion of global social media ad spend.However, this rapid user growth raises market concerns primarily around monetization pressures, especially given rising costs associated with AI technology investments and regulatory challenges. Advertisers are cautious as spending slows in key markets like North America. Moreover, the substantial investment by Meta Platforms (owner of these platforms) in AI initiatives, while positioning the company for the future, is causing investor anxiety about profitability and return on investment.
Meta is planning a $25 billion bond sale to fund future projects. Investors fear these massive outlays will squeeze profitability just as advertising growth slows in North America and Europe.
Business messaging revenue rose nearly 50% year-over-year to $583 million, driven by WhatsApp, yet regulatory pressure is mounting in India, one of Meta’s fastest-growing markets. The FTC trial in the U.S. and antitrust scrutiny in India are adding to worries about long-term margins and user monetization.
Despite record engagement, Meta’s heavy AI spending and rising regulatory costs are raising doubts about whether growth alone can sustain future profits — and that concern is now rippling across the entire social media sector.
Investors grew cautious about the sustainability of profits across social media platforms as capital-intensive AI initiatives expand. The news dragged other tech names like Snap and Pinterest, amplifying the sector-wide selloff.
Separately, regulatory pressure also loomed large, with tax authorities in India uncovering widespread underreporting by sellers on Instagram and Facebook. Although unrelated to Pinterest’s operations, the move underscored broader scrutiny of digital commerce linked to social media platforms.
Pinterest’s stock now trades at its lowest level since early 2024, reflecting investor doubts over its path to revenue acceleration and margin recovery. The company continues to emphasize long-term growth through deeper ad targeting, video content, and e-commerce partnerships. Yet for now, Wall Street remains unconvinced. User growth is up. Monetization is down. And confidence is cracking just as the holiday ad season begins.
