Q3 users hit a record high, but revenue "lost momentum": Citi maintains a "Neutral" rating on Pinterest (PINS.US)

Title context: Q3 users hit a record high, but revenue "lost momentum": Citi maintains a "Neutral" rating on Pinterest (PINS.US) Text: Note that the image-source social platform Pinterest (PINS.US) delivered a mixed third-quarter 2026 report card. Citi pointed out that although the platform's monthly active users (MAU) hit an all-time high, monetization weakened across regions, causing both revenue and profit to miss expectations, and fourth-quarter guidance also came in below the market consensus. Citi maintains a "Neutral/High Risk" rating on the stock with a price target of $27. Strong user growth, lagging monetization In the third quarter, Pinterest's global MAU reached 661 million, up 10.2% year over year, beating the market consensus by about 1% and setting a new record. However, the expansion in user scale failed to corresponding revenue growth: global average revenue per user (ARPU) was only $1.08, up a slight 1.1% year over year. Revenue for the quarter was $1.17 billion, up 11.9% year over year, about 3% below market expectations; adjusted EBITDA was $339 million, a margin of 28.9%, below the market expectation of $347 million and at the low end of the company's own guidance range. Europe becomes the biggest drag By region, revenue in the US & Canada (UCAN) market grew about 14% year over year, a relatively solid performance; but Europe revenue was about 7% below Citi's forecast, with year-over-year growth nearly flat; Rest of World (ROW) revenue also came in about 8% below forecast. Citi believes the weakness in the European market stems mainly from two factors: first, the company's own business restructuring adjustments, and second, the EU's new de minimis tax exemption rules for low-value goods effective since July, which have suppressed cross-border e-commerce advertising spendingthis policy change directly hit social commerce platforms that rely heavily on advertising budgets from Chinese cross-border sellers. Fourth-quarter guidance further disappointed the market. Management expects fourth-quarter revenue to grow 8.0% to 11.2% year over year (including a modest FX headwind), with the midpoint corresponding to $1.45 billion, clearly below the market expectation of $1.518 billion (corresponding to about 15% year-over-year growth); adjusted EBITDA guidance range is $538 million to $588 million, also below the market expectation of $601 million. Product and AI initiatives become the focus of the earnings call Citi's five key focus areas for the earnings call include: user growth trends in the UCAN market, the response to slowing monetization growth across the three regions, the Performance+ product roadmap (covering ROAS smart bidding, lower-funnel goals and audience prioritization features), search shopping innovations such as visual search ads and self-serve A/B testing, and the EBITDA margin trajectory amid continued increased investment in growth. The bank believes that product tailwinds such as Pinterest Assistant and Performance+ are expected to strengthen monetization and user engagement, constituting potential catalysts for upside earnings surprises.