Bernstein: Pinterest’s ad growth stalls as Reddit’s US users decline: two third-quarter reports reveal different challenges

Why did Pinterest’s revenue fall short of expectations?

In the third quarter of 2026, Pinterest generated revenue of 1.174 billion dollars, up 12% year over year, approximately 3% below the market consensus and below the company’s own guidance range. Adjusted EBITDA was 339 million dollars, approximately 2% below consensus.
Bernstein believes the change in Prime Day timing may have been the main reason for slower US revenue growth; exchange rates and changes in European regulation also affected Asia-Pacific cross-border advertisers targeting European markets. European revenue was flat year over year, and management expects these headwinds to persist into the fourth quarter.
The company expects fourth-quarter revenue to grow 8%–12% year over year, below investors’ earlier expectation that growth would accelerate to nearly 20% by year-end; its target for an adjusted EBITDA margin of approximately 30% remains unchanged.

Pinterest’s global monthly active users reached 661 million in the third quarter, up 10% year over year, with every region growing from the previous quarter. Gen Z is rapidly approaching 60% of the total user base, and commercial engagement per user is also deepening.
However, global average revenue per monthly active user rose just 1% year over year in the same period, including an 8% decline in Europe. Bernstein is focused on whether these shopping and commercial activities can translate into performance advertising revenue and whether the company can expand and diversify its advertising business to reduce revenue volatility.

Reddit’s third-quarter revenue was 895 million dollars, up 53% year over year and approximately 3% above market consensus; adjusted EBITDA was approximately 402 million dollars, broadly in line with expectations. However, Bernstein noted that the revenue beat narrowed compared with the previous several quarters.
Global daily active users were 130.3 million, up 12% year over year and approximately 2% below market consensus; US daily active users were 50.7 million, down 2% year over year and approximately 5% below consensus. Management said referral traffic from search had declined and expects this headwind to continue into the fourth quarter.
The company’s fourth-quarter revenue guidance is 1 billion–1.03 billion dollars, with the midpoint implying year-over-year growth of 40%, below the third quarter’s 53% and approximately 3% below the market consensus at the time. Following the slowdown in user growth, Bernstein is focused on how much revenue per user can continue to support overall growth.

Management plans to make Reddit a login-only service to strengthen user engagement, improve ad-targeting signals and protect data access. The company previously said logged-in and logged-out users generate the same level of monetization per minute, but logged-in users spend more time on the platform.
The change also raises questions about user attrition and the impact on revenue. Separately, third-quarter data licensing revenue was 48 million dollars, up 34% year over year; the agreement with Google expires in 2027, and its renewal and the economic terms of licensing remain variables Bernstein is watching.
Bernstein rates Pinterest Outperform with a 28 dollar price target, and Reddit Market Perform with a 180 dollar price target.