# PINTEREST, INC. (PINS)

Informational only - not investment advice.

CIK: 0001506293
SIC: 7370 Services-Computer Programming, Data Processing, Etc.
SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7370 Services-Computer Programming, Data Processing, Etc.](/industry/7370/)
Latest 10-K filed: 2026-02-12
SEC page: https://www.sec.gov/edgar/browse/?CIK=1506293
Filing source: https://www.sec.gov/Archives/edgar/data/1506293/000150629326000021/pins-20251231.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 4221767000 | USD | 2025 | 2026-02-12 |
| Net income | 416855000 | USD | 2025 | 2026-02-12 |
| Assets | 5492132000 | USD | 2025 | 2026-02-12 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001506293.json. Derived margins are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  | 472,852,000 | 755,932,000 | 1,142,761,000 | 1,692,658,000 | 2,578,027,000 | 2,802,574,000 | 3,055,071,000 | 3,646,166,000 | 4,221,767,000 |
| Net income |  | -130,044,000 | -62,974,000 | -1,361,371,000 | -128,323,000 | 316,438,000 | -96,047,000 | -35,610,000 | 1,862,106,000 | 416,855,000 |
| Operating income |  | -137,934,000 | -74,721,000 | -1,388,866,000 | -142,504,000 | 326,187,000 | -101,677,000 | -125,678,000 | 179,817,000 | 319,883,000 |
| Diluted EPS |  |  |  | -3.24 | -0.22 | 0.46 | -0.14 | -0.05 | 2.67 | 0.61 |
| Assets |  |  | 1,152,731,000 | 2,393,317,000 | 2,609,459,000 | 3,537,238,000 | 3,862,730,000 | 3,594,405,000 | 5,342,660,000 | 5,492,132,000 |
| Liabilities |  |  | 281,895,000 | 369,612,000 | 367,088,000 | 498,495,000 | 581,076,000 | 503,725,000 | 591,506,000 | 746,894,000 |
| Stockholders' equity | -448,286,000 | -546,464,000 | -594,563,000 | 2,023,705,000 | 2,242,371,000 | 3,038,743,000 | 3,281,654,000 | 3,090,680,000 | 4,751,154,000 | 4,745,238,000 |
| Cash and cash equivalents |  | 71,468,000 | 122,509,000 | 649,666,000 | 669,230,000 | 1,419,630,000 | 1,611,063,000 | 1,361,936,000 | 1,136,460,000 | 969,342,000 |
| Net margin |  | -27.50% | -8.33% | -119.13% | -7.58% | 12.27% | -3.43% | -1.17% | 51.07% | 9.87% |
| Operating margin |  | -29.17% | -9.88% | -121.54% | -8.42% | 12.65% | -3.63% | -4.11% | 4.93% | 7.58% |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-04. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001506293.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-06-30 |  |  | -0.07 | reported discrete quarter |
| 2022-Q3 | 2022-09-30 |  |  | -0.10 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | -0.31 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 | 708,025,000 | -34,942,000 | -0.05 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 763,203,000 | 6,733,000 | 0.01 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 981,262,000 | 201,178,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 739,983,000 | -24,812,000 | -0.04 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 853,680,000 | 8,887,000 | 0.01 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 898,373,000 | 30,556,000 | 0.04 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 1,154,130,000 | 1,847,475,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 854,988,000 | 8,922,000 | 0.01 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 998,227,000 | 38,755,000 | 0.06 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 1,049,205,000 | 92,108,000 | 0.13 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 1,319,347,000 | 277,070,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 1,007,514,000 | -73,587,000 | -0.12 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1506293/000150629326000068/pins-20260331.htm

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization.
Confidence: high
Filing date: 2026-05-04
Report date: 2026-03-31

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from these forward-looking statements as a result of many factors, including those discussed in “Risk Factors” and “Note About Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q.

Overview of First Quarter Results

Our key financial and operating results as of and for the three months ended March 31, 2026, unless noted otherwise, are as follows:

•Revenue was $1,007.5 million, an increase of 18% on a reported and 15% on a constant currency basis compared to the three months ended March 31, 2025.

•Monthly active users ("MAUs") were 631 million, an increase of 11% compared to March 31, 2025.

•Share-based compensation expense was $231.4 million, an increase of $44.0 million compared to the three months ended March 31, 2025.

•Loss from operations was $80.3 million, an increase of $44.8 million compared to the three months ended March 31, 2025.

•Net loss was $73.6 million and Adjusted EBITDA was $206.5 million.

•Net cash provided by operating activities was $328.0 million and free cash flow was $311.7 million during the three months ended March 31, 2026.

•Cash, cash equivalents and marketable securities was $1,298.6 million.

•Headcount was 5,287.

Restructuring

In January 2026, we initiated a global restructuring plan (the “Restructuring Plan”) to support our transformation initiatives, including but not limited to (i) reallocating resources to AI-focused roles and teams that drive AI adoption and execution, (ii) prioritizing AI‑powered products and capabilities, and (iii) accelerating the transformation of our sales and go-to-market approach.

As part of the Restructuring Plan, we commenced a workforce reduction of less than 15% as well as office space reductions.

Restructuring charges during the three months ended March 31, 2026 were as follows (in thousands):

Severance and Other Personnel Costs

Share Based Compensation

Office Space Reductions

Total

Restructuring

$

36,172 

$

9,325 

$

1,600 

$

47,097 

We expect to incur total charges of $59.6 million to $69.6 million under the Restructuring Plan, including additional charges of $12.5 million to $22.5 million, which we expect to incur through the end of the third quarter of 2026. We will record additional charges under the Restructuring Plan as incurred, and the timing and magnitude of such charges are subject to change. Liabilities under the Restructuring Plan are not material as of March 31, 2026.

26

Trends in User Metrics

Monthly Active Users. We define an MAU as an authenticated Pinterest user who visits our website, opens our mobile application or interacts with Pinterest through one of our browser or site extensions, such as the Save button, at least once during the 30-day period ending on the date of measurement. The number of MAUs does not include Shuffles users unless they would otherwise qualify as MAUs. We present MAUs based on the number of MAUs measured on the last day of the current period. We calculate average MAUs based on the average of the number of MAUs measured on the last day of the current period and the last day prior to the beginning of the current period. MAUs are the primary metric by which we measure the scale of our active user base.

Quarterly Monthly Active Users

(in millions)

Note: U.S. and Canada, Europe and Rest of World may not sum to Global due to rounding. Europe includes Russia and Turkey for our reporting of Revenue, MAUs and ARPU by geographic region.

27

As of March 31, 2026, global MAUs increased compared to March 31, 2025 primarily due to our ongoing investments in relevance and personalization.

Trends in Monetization Metrics

Revenue. We calculate revenue by user geography based on our estimate of the geographic location of our users when they perform a revenue-generating activity. The geography of our users affects our revenue and financial results because we currently only monetize certain countries and currencies and because we monetize different geographies at different average rates. Our revenue in U.S. and Canada and, to a lesser extent, Europe is higher primarily due to the relative size and maturity of the digital advertising markets in these geographies.

Quarterly Revenue

(in millions)

Note: Revenue by geography in the charts above is geographically apportioned based on our estimate of users' geographic location when they perform a revenue-generating activity. This allocation differs from our disclosure of revenue disaggregated by geography in the notes to our condensed consolidated financial statements where revenue is geographically apportioned based on our customers’ billing addresses. U.S. and Canada, Europe and Rest of World may not sum to Global and quarterly amounts may not sum to annual due to rounding.

28

Average Revenue per User. We measure monetization of our platform through our average revenue per user metric. We define ARPU as our total revenue in a given geography during a period divided by average MAUs in that geography during the period. We calculate ARPU by geography based on our estimate of the geography in which revenue-generating activities occur. We present ARPU on a U.S. and Canada, Europe and Rest of World basis because we currently monetize users in different geographies at different average rates. Our ARPU in U.S. and Canada and, to a lesser extent, Europe is higher primarily due to the relative size and maturity of the digital advertising markets in these geographies.

Quarterly Average Revenue per User

For the three months ended March 31, 2026, global ARPU was $1.61, which represents an increase of 6% compared to the three months ended March 31, 2025. For the three months ended March 31, 2026, U.S. and Canada ARPU was $7.12, an increase of 9%, Europe ARPU was $1.17, an increase of 17%, and Rest of World ARPU was $0.20, an increase of 38% compared to the three months ended March 31, 2025.

We use MAUs and ARPU to assess the growth and health of the overall business and believe that these metrics best reflect our ability to attract, retain, engage and monetize our users, and thereby drive revenue.

29

Non-GAAP Financial Measure

To supplement our condensed consolidated financial statements presented in accordance with generally accepted accounting principles in the United States ("GAAP"), we consider certain non-GAAP financial measures, as described below.

We use Adjusted EBITDA to evaluate our operating results and for financial and operational decision-making purposes. We define Adjusted EBITDA as net income (loss) adjusted to exclude depreciation and amortization expense, share-based compensation expense, payroll tax expense related to share-based compensation, interest income (expense), net, other income (expense), net, provision for (benefit from) income taxes and certain other non-recurring or non-cash items impacting net income (loss) that we do not consider indicative of our ongoing business performance. We believe Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the income and expenses that it excludes.

We use constant currency revenue to evaluate our operating and financial results. We calculate constant currency revenue by translating our current period revenue using the corresponding prior period’s monthly exchange rates for currencies other than the U.S. dollar. We believe constant currency revenue provides useful information to investors because it excludes the effects of foreign currency volatility that are not indicative of our core operating results.

We present free cash flow because we believe it provides useful information to investors about the amount of cash generated from operations, after purchases of property and equipment, that can be used to strengthen our balance sheet or invest in our business among other things. We define free cash flow as net cash provided by operating activities less purchases of property and equipment. Free cash flow is not intended to represent our residual cash flow available for discretionary expenditures.

We present these non-GAAP financial measures because we believe they provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics we use for financial and operational decision-making. We present these non-GAAP financial measures to assist investors in seeing our operating results through the eyes of management and because we believe that these measures provide an additional tool for investors to use in comparing our core business operating results over multiple periods with other companies in our industry.

Adjusted EBITDA, constant currency revenue and free cash flow should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures rather than net income (loss), revenue and net cash provided by operations, the nearest GAAP equivalents. For example,

•Adjusted EBITDA excludes:

•certain recurring, non-cash charges such as depreciation of fixed assets and amortization of acquired intangible assets, although these assets may have to be replaced in the future; and

•share-based compensation expense and related payroll tax expense, which have been and will continue to be for the foreseeable future, significant recurring expenses and an important part of our compensation strategy.

•Constant currency revenue excludes the effect of changes in foreign currency exchange rates, which have an actual effect on our operating results; and

•Free cash flow does not reflect our future contractual commitments arising from purchases of property and equipment.

In addition, these non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP, and may differ from similarly titled measures used by other companies (if used at all), which reduces their usefulness as comparative measures.

Because of these limitations, you should consider these non-GAAP financial measures alongside other financial performance measures, and our other financial results presented in accordance with GAAP.

30

Adjusted EBITDA

The following table presents a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA (in thousands):

Three Months Ended

March 31,

2026

2025

Net income (loss)

$

(73,587)

$

8,922 

Depreciation and amortization (1)

7,452 

5,848 

Share-based compensation (1)

222,121 

187,426 

Payroll tax expense related to share-based compensation

10,132 

13,852 

Interest (income) expense, net

(17,786)

(27,293)

Other (income) expense, net

994 

(4,519)

Provision for (benefit from) income taxes

10,087 

(12,587)

Restructuring charges (2)

47,097 

— 

Adjusted EBITDA

$

206,510 

$

171,649 

(1)Excludes share-based compensation expense of $9.3 million and amortization expense of $1.4 million included in restructuring charges for the three months ended March 31, 2026.

(2)We have excluded restructuring charges associated with the Restructuring Plan from Adjusted EBITDA because it is non-recurring and not reflective of our ongoing business operations or the underlying trends in our business.

Constant currency revenue

The following table presents

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization.
Confidence: high

Part II

Item 7. Management's discussion and analysis of financial condition and results of operations

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes and other financial information appearing elsewhere in this Annual Report on Form 10-K. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from these forward-looking statements as a result of many factors, including those discussed in “Risk Factors” and “Note About Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K.

A discussion regarding our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 is presented below. A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 is included under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Overview of 2025 results

Our key financial and operating results as of and for the year ended December 31, 2025 are as follows:

•Revenue was $4,221.8 million, an increase of 16% on a reported and 15% on a constant currency basis compared to 2024.

•MAUs were 619 million, an increase of 12% compared to December 31, 2024.

•Share-based compensation expense was $880.5 million, an increase of $114.7 million compared to 2024.

•Income from operations was $319.9 million, an increase of $140.1 million compared to 2024.

•Net income was $416.9 million and Adjusted EBITDA was $1,270.0 million.

•Net cash provided by operating activities was $1,284.3 million and free cash flow was $1,251.9 million.

•Cash, cash equivalents and marketable securities were $2,467.2 million.

•Headcount was 5,265.

47

Part II

Trends in user metrics

Monthly Active Users. We define an MAU as an authenticated Pinterest user who visits our website, opens our mobile application or interacts with Pinterest through one of our browser or site extensions, such as the Save button, at least once during the 30-day period ending on the date of measurement. The number of MAUs does not include Shuffles users unless they would otherwise qualify as MAUs. We present MAUs based on the number of MAUs measured on the last day of the current period. We calculate average MAUs based on the average of the number of MAUs measured on the last day of the current period and the last day prior to the beginning of the current period. MAUs are the primary metric by which we measure the scale of our active user base.

Quarterly monthly active users

(in millions)

Note: U.S. and Canada, Europe and Rest of World may not sum to Global due to rounding. Europe includes Russia and Turkey for our reporting of Revenue, MAUs and ARPU by geographic region.

48

Part II

A portion of our MAUs visit Pinterest on a weekly basis. We define a weekly active user (“WAU”) as an authenticated Pinterest user who visits our website, opens our mobile application or interacts with Pinterest through one of our browser or site extensions, such as the Save button, at least once during the seven-day period ending on the date of measurement. As of December 31, 2025, the proportion of WAUs to MAUs, which has stayed relatively consistent over time, was 62%.

As of December 31, 2025, global MAUs increased compared to December 31, 2024, primarily due to our ongoing investments in relevance and personalization.

49

Part II

Trends in monetization metrics

Revenue. We calculate revenue by user geography based on our estimate of the geographic location of our users when they perform a revenue-generating activity. The geography of our users affects our revenue and financial results because we currently only monetize certain countries and currencies and because we monetize different geographies at different average rates. Our revenue in U.S. and Canada and, to a lesser extent, Europe is higher primarily due to the relative size and maturity of the digital advertising markets in these geographies.

Quarterly revenue

(in millions)

Note: Revenue by geography in the charts above is geographically apportioned based on our estimate of users' geographic location when they perform a revenue-generating activity. This allocation differs from our disclosure of revenue disaggregated by geography in the notes to our consolidated financial statements where revenue is geographically apportioned based on our customers’ billing addresses. U.S. and Canada, Europe and Rest of World may not sum to Global and quarterly amounts may not sum to annual due to rounding.

50

Part II

Average Revenue per User. We measure monetization of our platform through our ARPU metric. We define ARPU as our total revenue in a given geography during a period divided by average MAUs in that geography during the period. We calculate ARPU by geography based on our estimate of the geography in which revenue‑ generating activities occur. We present ARPU on a U.S. and Canada, Europe and Rest of World basis because we currently monetize users in different geographies at different average rates. Our ARPU in U.S. and Canada and, to a lesser extent, Europe is higher primarily due to the relative size and maturity of the digital advertising markets in these geographies.

Quarterly average revenue per user

For the year ended December 31, 2025, global ARPU was $7.21, which represents an increase of 4% compared to the year ended December 31, 2024. For the year ended December 31, 2025, U.S. and Canada ARPU was $30.84, an increase of 6%, Europe ARPU was $5.12, an increase of 21%, and Rest of World ARPU was $0.83, an increase of 40% compared to the year ended December 31, 2024.

We use MAUs and ARPU to assess the growth and health of the overall business and believe that these metrics best reflect our ability to attract, retain, engage and monetize our users, and thereby drive revenue.

51

Part II

Non-GAAP financial measures

To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles in the United States ("GAAP"), we consider certain non-GAAP financial measures, as described below.

We use Adjusted EBITDA to evaluate our operating results and for financial and operational decision-making purposes. We define Adjusted EBITDA as net income (loss) adjusted to exclude depreciation and amortization expense, share-based compensation expense, payroll tax expense related to share-based compensation, interest income (expense), net, other income (expense), net, provision for (benefit from) income taxes and certain other non-recurring or non-cash items impacting net income (loss) that we do not consider indicative of our ongoing business performance. We believe Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the income and expenses that it excludes.

We use constant currency revenue to evaluate our operating and financial results. We calculate constant currency revenue by translating our current period revenue using the corresponding prior period’s monthly exchange rates for currencies other than the U.S. dollar. We believe constant currency revenue provides useful information to investors because it excludes the effects of foreign currency volatility that are not indicative of our core operating results.

We present free cash flow because we believe it provides useful information to investors about the amount of cash generated from operations, after purchases of property and equipment, that can be used to strengthen our balance sheet or invest in our business among other things. We define free cash flow as net cash provided by operating activities less purchases of property and equipment. Free cash flow is not intended to represent our residual cash flow available for discretionary expenditures.

We present these non-GAAP financial measures because we believe they provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics we use for financial and operational decision-making. We present these non-GAAP financial measures to assist investors in seeing our operating results through the eyes of management and because we believe that these measures provide an additional tool for investors to use in comparing our core business operating results over multiple periods with other companies in our industry.

Adjusted EBITDA, constant currency revenue and free cash flow should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures rather than net income (loss), revenue and net cash provided by operations, the nearest GAAP equivalents. For example,

•Adjusted EBITDA excludes:

•certain recurring, non-cash charges such as depreciation of fixed assets and amortization of acquired intangible assets, although these assets may have to be replaced in the future; and

•share-based compensation expense and related payroll tax expense, which have been and will continue to be for the foreseeable future, significant recurring expenses and an important part of our compensation strategy.

•Constant currency revenue excludes the effect of changes in foreign currency exchange rates, which have an actual effect on our operating results; and

•Free cash flow does not reflect our future contractual commitments arising from purchases of property and equipment.

In addition, these non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP, and may differ from similarly titled measures used by other companies (if used at all), which reduces their usefulness as comparative measures.

Because of these limitations, you should consider these non-GAAP financial measures alongside other financial performance measures, and our other financial results presented in accordance with GAAP.

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Adjusted EBITDA

The following table presents a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA (in thousands):

Year Ended December 31,

2025

2024

2023

Net income (loss)

$

416,855 

$

1,862,106 

$

(35,610)

Depreciation and amortization

25,151 

21,266 

21,509 

Share-based compensation

880,463 

765,795 

647,860 

Payroll tax expense related to share-based compensation(1)

30,984 

30,787 

24,131 

Interest (income) expense, net

(110,493)

(127,003)

(105,439)

Other (income) expense, net

(15,514)

19,215 

(3,799)

Provision for (benefit from) income taxes(2)

29,035 

(1,574,501)

19,170 

Legal settlement(3)

— 

34,650 

— 

Restructuring charges

— 

— 

126,882 

Non-cash charitable contributions

13,495 

— 

12,890 

Adjusted EBITDA

$

1,269,976 

$

1,032,315 

$

707,594 

(1)We began excluding payroll tax expense related to share-based compensation from Adjusted EBITDA in the fourth quarter of 2024 because these taxes are variable due to our stock price and other factors outside our control and therefore are not reflective of our ongoing business operations or the underlying trends in our business. Accordingly, although payroll tax expense related to share-based compensation is a cash expense that we will continue to incur in the future, we believe excluding this expense provides investors with a better understanding of the performance of our core business and serves as a tool for investors to use in comparing our core business operating results over multiple periods with other companies in our industry. Prior period amounts have been restated to conform to this presentation.

(2)Provision for (benefit from) income taxes includes $1,597.0 million related to the release of our valuation allowance on our U.S. federal and state, excluding California, deferred tax assets during the fourth quarter of 2024. Refer to Note 10 to our consolidated financial statements for further information.

(3)On November 1, 2024, we reached a settlement to resolve pending litigation relating to allegations concerning the early development of Pinterest. We recorded legal settlement expense of $34.7 million, net of insurance proceeds, for the year ended December 31, 2024, which we have excluded from Adjusted EBITDA because it is non-recurring and not reflective of our ongoing business operations or the underlying trends in our business.

Constant currency revenue

The following table presents revenue and period-over-period changes on an as reported and constant currency basis (in thousands, except percentages):

Year Ended December 31,

% Change

2025

2024

As Reported

Constant Currency(1)

Revenue

$

4,221,767 

$

3,646,166 

16%

15%

(1)On a constant currency basis, revenue for the year ended December 31, 2025 was $4,205.3 million due to a $16.5 million favorable impact of changes in foreign exchange rates.

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Free cash flow

The following table presents a reconciliation of net cash flows provided by operating activities, the most directly comparable financial measure calculated and presented in accordance with GAAP, to free cash flow (in thousands):

Year Ended December 31,

2025

2024

2023

Reconciliation of free cash flow

Net cash provided by operating activities

$

1,284,264 

$

964,594 

$

612,961 

Less:

Purchases of property and equipment

(32,375)

(24,606)

(8,063)

Free cash flow

$

1,251,889 

$

939,988 

$

604,898 

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Components of results of operations

Revenue. We generate revenue by delivering ads on our website and mobile application. Advertisers purchase ads directly with us or through their relationships with advertising agencies. We recognize revenue only after transferring control of promised goods or services to customers, which occurs when a user clicks on an ad contracted on a cost per click ("CPC") basis, views an ad contracted on a cost per thousand impressions ("CPM") basis or cost per day ("CPD") basis or views a video ad contracted on a cost per view ("CPV") basis. We recognize revenue over the service period for ads contracted on a CPD basis, which do not contain minimum impression guarantees.

Cost of Revenue. Cost of revenue consists primarily of expenses associated with the delivery of our service, including the cost of hosting our website and mobile application. Cost of revenue also includes personnel-related expense, including salaries, benefits and share-based compensation for employees on our operations teams, payments associated with partner arrangements, credit card and other transaction processing fees, amortization of acquired intangible assets and allocated facilities and other supporting overhead costs.

Research and development. Research and development consists primarily of personnel-related expense, including salaries, benefits and share-based compensation for our engineers and other employees engaged in the research and development of our products, and allocated facilities and other supporting overhead costs.

Sales and marketing. Sales and marketing consists primarily of personnel-related expense, including salaries, commissions, benefits and share-based compensation for our employees engaged in sales, sales support, marketing, and customer service functions, advertising and promotional expenditures, services provided by third-party resellers, professional services, amortization of acquired intangible assets and allocated facilities and other supporting overhead costs. Our marketing efforts also include user- and advertiser-focused marketing expenditures.

General and administrative. General and administrative consists primarily of personnel-related expense, including salaries, benefits and share-based compensation for our employees engaged in finance, legal, human resources and other administrative functions, professional services, including outside legal and accounting services, charitable contributions and allocated facilities and other supporting overhead costs.

Interest and other income (expense), net. Interest and other income (expense), net consists primarily of interest earned on our cash equivalents and marketable securities and foreign currency exchange gains and losses.

Provision for (benefit from) income taxes. Provision for (benefit from) income taxes consists primarily of income taxes in foreign jurisdictions and U.S. federal and state income taxes.

Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) adjusted to exclude depreciation and amortization expense, share-based compensation expense, payroll tax expense related to share-based compensation, interest income (expense), net, other income (expense), net, provision for (benefit from) income taxes and certain other non-recurring or non-cash items impacting net income (loss) that we do not consider indicative of our ongoing business performance. See “Non-GAAP Financial Measures” for more information and for a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.

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Results of operations

The following tables set forth our consolidated statements of operations data (in thousands):

Year Ended December 31,

2025

2024

2023

Revenue

$

4,221,767 

$

3,646,166 

$

3,055,071 

Costs and expenses(1):

Cost of revenue

841,521 

750,355 

688,760 

Research and development

1,427,447 

1,240,564 

1,068,416 

Sales and marketing

1,166,705 

1,011,772 

911,166 

General and administrative

466,211 

463,658 

512,407 

Total costs and expenses

3,901,884 

3,466,349 

3,180,749 

Income (loss) from operations

319,883 

179,817 

(125,678)

Interest income (expense), net

110,493 

127,003 

105,439 

Other income (expense), net

15,514 

(19,215)

3,799 

Income (loss) before provision for (benefit from) income taxes

445,890 

287,605 

(16,440)

Provision for (benefit from) income taxes

29,035 

(1,574,501)

19,170 

Net income (loss)

$

416,855 

$

1,862,106 

$

(35,610)

Adjusted EBITDA(2)

$

1,269,976 

$

1,032,315 

$

707,594 

(1)Includes share-based compensation expense as follows (in thousands):    

Year Ended December 31,

2025

2024

2023

Cost of revenue

$

19,541 

$

14,836 

$

11,117 

Research and development

567,571 

497,442 

422,964 

Sales and marketing

149,565 

122,149 

96,798 

General and administrative

143,786 

131,368 

116,981 

Total share-based compensation

$

880,463 

$

765,795 

$

647,860 

(2)See “Non-GAAP Financial Measures” for more information and for a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.

The following table sets forth our consolidated statements of operations data (as a percentage of revenue):

Year Ended December 31,

2025

2024

2023

Revenue

100

%

100

%

100

%

Costs and expenses:

Cost of revenue

20 

21 

23 

Research and development

34 

34 

35 

Sales and marketing

28 

28 

30 

General and administrative

11 

13 

17 

Total costs and expenses

92 

95 

104 

Income (loss) from operations

8 

5 

(4)

Interest income (expense), net

3 

3 

3 

Other income (expense), net

— 

(1)

— 

Income (loss) before provision for (benefit from) income taxes

11 

8 

(1)

Provision for (benefit from) income taxes

1 

(43)

1 

Net income (loss)

10

%

51

%

(1

%)

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Part II

Years Ended December 31, 2025 and 2024

Revenue

Year Ended December 31,

2025

2024

% change

(in thousands)

Revenue

$

4,221,767 

$

3,646,166 

16%

Revenue for the year ended December 31, 2025 increased by $575.6 million compared to the year ended December 31, 2024, primarily due to growth in demand from our conversion and awareness objectives. Revenue increased 16% on a reported and 15% on a constant currency basis compared to 2024. Revenue growth was primarily driven by a 4% increase in ARPU supported by an 11% increase in average MAUs for the year ended December 31, 2025 compared to the year ended December 31, 2024. The number of advertisements served increased by 49% while the price of advertisements decreased by 22% compared to the year ended December 31, 2024.

Revenue based on our estimate of the geographic location of our users increased by 10% in the U.S. and Canada to $3,173.1 million, Europe revenue increased by 31% to $775.0 million and Rest of World revenue increased by 62% to $273.6 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.

Cost of revenue

Year Ended December 31,

2025

2024

% change

(in thousands)

Cost of revenue

$

841,521 

$

750,355 

12%

Percentage of revenue

20

%

21

%

Cost of revenue for the year ended December 31, 2025 increased by $91.2 million compared to the year ended December 31, 2024. The increase was primarily due to increased users and engagement.

Research and development

Year Ended December 31,

2025

2024

% change

(in thousands)

Research and development

$

1,427,447 

$

1,240,564 

15%

Percentage of revenue

34

%

34

%

Research and development for the year ended December 31, 2025 increased by $186.9 million compared to the year ended December 31, 2024. The increase was primarily due to an 18% increase in personnel expenses due to higher headcount, a $70.1 million increase in share-based compensation expense and a $10.8 million increase in allocated facilities costs.

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Part II

Sales and marketing

Year Ended December 31,

2025

2024

% change

(in thousands)

Sales and marketing

$

1,166,705 

$

1,011,772 

15%

Percentage of revenue

28

%

28

%

Sales and marketing for the year ended December 31, 2025 increased by $154.9 million compared to the year ended December 31, 2024. The increase was primarily due to a 19% increase in personnel expenses due to higher headcount, a $27.4 million increase in share-based compensation expense, a $23.9 million increase in outsourced services costs, a $12.6 million increase in marketing expenses and a $9.7 million increase in allocated facilities costs.

General and administrative

Year Ended December 31,

2025

2024

% change

(in thousands)

General and administrative

$

466,211 

$

463,658 

1%

Percentage of revenue

11

%

13

%

General and administrative for the year ended December 31, 2025 increased by $2.6 million compared to the year ended December 31, 2024. The increase was primarily due to a 10% increase in personnel expenses due to higher headcount, $13.5 million in non-cash charitable contributions and a $12.4 million increase in share-based compensation expense, offset by a $34.7 million legal settlement, net of insurance proceeds, in 2024 and a decrease in outsourced services costs.

Interest and other income (expense), net

Year Ended December 31,

2025

2024

% change

(in thousands)

Interest income (expense), net

$

110,493 

$

127,003 

(13%)

Other income (expense), net

15,514 

(19,215)

181%

Interest and other income (expense), net

$

126,007 

$

107,788 

17%

Interest and other income (expense), net for the year ended December 31, 2025 increased by $18.2 million compared to the year ended December 31, 2024. The increase was primarily due to higher foreign currency exchange gains offset by lower returns on our cash equivalents and marketable securities as a result of lower interest rates.

Provision for (benefit from) income taxes

Year Ended December 31,

2025

2024

% change

(in thousands)

Provision for (benefit from) income taxes

$

29,035 

$

(1,574,501)

NM

NM = Not meaningful

The provision for income taxes for the year ended December 31, 2025 was $29.0 million, as compared to a benefit from income taxes of $1,574.5 million for the year ended December 31, 2024. The tax benefit during the year ended December 31, 2024 was primarily due to the release of our valuation allowance on our U.S. federal and state, excluding California, deferred tax assets.

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On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The legislation includes provisions that allow for the immediate expensing of domestic U.S. research and development expenses and other changes to the U.S. taxation of profits derived from foreign operations. The provisions of the OBBBA have multiple effective dates from 2025 through 2027. The changes effective in 2025 are included in our provision for income taxes for the year ended December 31, 2025 and were not material. We are currently evaluating the impact of the legislation on our consolidated financial statements for future periods.

Given our current and anticipated future earnings, we believe that there is a reasonable possibility that sufficient positive evidence may become available to allow us to determine that the valuation allowance recorded against our Ireland deferred tax assets could be released within the next twelve months. The reversal would result in the recognition of Ireland deferred tax assets and a corresponding income tax benefit in the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change based on our actual operating results.

Net income and adjusted EBITDA

Year Ended December 31,

2025

2024

% change

(in thousands)

Net income

$

416,855 

$

1,862,106 

(78%)

Adjusted EBITDA

$

1,269,976 

$

1,032,315 

23%

Net income for the year ended December 31, 2025 was $416.9 million, as compared to $1,862.1 million for the year ended December 31, 2024. Adjusted EBITDA was $1,270.0 million for the year ended December 31, 2025, as compared to $1,032.3 million for the year ended December 31, 2024, due to the factors described above. See “Non-GAAP Financial Measures” for more information and for a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.

Liquidity and capital resources

We finance our operations primarily through payments received from our customers. Our primary uses of cash are personnel-related costs and the cost of hosting our website and mobile application. As of December 31, 2025, we had $2,467.2 million in cash, cash equivalents and marketable securities. Our cash equivalents and marketable securities are primarily invested in short-duration fixed income securities, including government and investment-grade corporate debt securities and money market funds. As of December 31, 2025, $216.2 million of our cash and cash equivalents was held by our foreign subsidiaries.

In October 2022, we replaced the $500.0 million revolving credit facility entered into in November 2018 with an amended and restated five-year $400.0 million revolving credit facility (the “2022 revolving credit facility”) that contained an accordion option which, if exercised, would allow us to increase the aggregate commitments by up to $405.0 million provided we are able to secure additional lender commitments and satisfy certain other conditions.

In October 2023, we amended the 2022 revolving credit facility to increase our aggregate commitment to $500.0 million and reduce our accordion option from $405.0 million to $305.0 million. Interest on any borrowings under the 2022 revolving credit facility accrues at either an adjusted term SOFR plus 0.10% and a margin of 1.50% or at an alternative base rate plus a margin of 0.50%, at our election, and we are required to pay an annual commitment fee that accrues at 0.15% per annum on the unused portion of the aggregate commitments under the 2022 revolving credit facility.

The 2022 revolving credit facility also allows us to issue letters of credit, which reduce the amount we can borrow. We are required to pay a fee that accrues at 0.125% per annum on the average aggregate daily maximum amount available to be drawn under any outstanding letters of credit.

The 2022 revolving credit facility contains customary conditions to borrowing, events of default and covenants, including covenants that restrict our ability to incur indebtedness, grant liens, make distributions to holders of our stock or the stock of our subsidiaries, make investments or engage in transactions with our affiliates. The 2022 revolving credit facility also contains a financial maintenance covenant: a maximum net leverage ratio of consolidated debt to consolidated EBITDA no greater than 3.50 to 1.00, subject to an increase up to 4.00 to 1.00 for a certain period following an acquisition. The

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obligations under the 2022 revolving credit facility are secured by liens on substantially all of our domestic assets, including certain domestic intellectual property assets.

Our total borrowing capacity under the revolving credit facility is $500.0 million as of December 31, 2025. We have not issued any letters of credit and are in compliance with all covenants under the 2022 revolving credit facility as of December 31, 2025.

We believe our existing cash, cash equivalents and marketable securities and amounts available under the 2022 revolving credit facility will be sufficient to meet our working capital and capital expenditure needs over at least the next 12 months, though we may require additional capital resources in the future. We may elect to raise additional capital through the sale of additional equity to fund our future needs beyond the next 12 months.

Our material cash requirements as of December 31, 2025 include our $312.3 million commitment with Amazon Web Services, for which we are not subject to annual purchase commitments, and our $323.5 million of operating lease obligations, of which $50.0 million is due within the next 12 months. In December 2025, we entered into a definitive agreement to acquire tvScientific, for $450.0 million in cash, subject to certain adjustments, which is also due within the next 12 months.

In November 2024, our board of directors authorized a stock repurchase program of up to $2.0 billion of our Class A common stock. Under the stock repurchase program, we are authorized to repurchase, from time-to-time, shares of our Class A common stock through open market purchases, in privately negotiated transactions or in such other manner as permitted by securities law and as determined by management at such time and in such amounts as management may decide. The program does not obligate us to repurchase any specific number of shares and may be modified, suspended or discontinued at any time. The timing, manner, price and amount of any repurchases are determined by management in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. During the year ended December 31, 2025, we repurchased and retired 30,108,015 shares of our Class A common stock for an aggregate purchase price of $927.0 million at an average price per share of $30.79, including $3.3 million excise tax resulting from the Inflation Reduction Act of 2022. As of December 31, 2025, $972.8 million remained available for repurchases under the stock repurchase program.

For the years ended December 31, 2025 and 2024, our net cash flows and free cash flow were as follows (in thousands):

Year Ended December 31,

2025

2024

Net cash provided by (used in):

Operating activities

$

1,284,264 

$

964,594 

Investing activities

$

(134,482)

$

(221,017)

Financing activities

$

(1,317,942)

$

(968,319)

Free cash flow(1)

$

1,251,889 

$

939,988 

(1)See “Non-GAAP Financial Measure” for more information and for a reconciliation of net cash provided by operating activities, the most directly comparable financial measure calculated and presented in accordance with GAAP, to free cash flow.

Operating activities

Cash flows from operating activities consist of our net income (loss) adjusted for certain non-cash reconciling items, such as share-based compensation expense, depreciation and amortization, deferred income taxes, net amortization of investment premium and discount, non-cash charitable contributions and changes in our operating assets and liabilities. Net cash provided by operating activities increased by $319.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in our net income as adjusted for certain non-cash items.

Investing activities

Cash flows from investing activities consist of capital expenditures for improvements to new and existing office spaces. We also actively manage our operating cash and cash equivalent balances and invest excess cash in short-duration marketable securities, the sales and maturities of which we use to fund our ongoing cash requirements. Net cash used in

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Part II

investing activities decreased by $86.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in maturities of marketable securities offset by an increase in purchases of marketable securities.

Financing activities

Cash flows from financing activities consist of tax remittances on release of RSUs and RSAs, repurchases of our Class A common stock and proceeds from the exercise of stock options. Net cash used in financing activities increased by $349.6 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in cash paid for repurchases of our Class A common stock.

Free cash flow

Free cash flow increased $311.9 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 and consists of net cash provided by operating activities and purchases of property and equipment. See “Non-GAAP Financial Measures” for more information and for a reconciliation of net cash flows provided by operating activities, the most directly comparable financial measure calculated and presented in accordance with GAAP, to free cash flow.

Critical accounting policies and estimates

We prepare our consolidated financial statements in accordance with GAAP. Preparing our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses as well as related disclosures. Because these estimates and judgments may change from period to period, actual results could differ materially, which may negatively affect our financial condition or results of operations. We base our estimates and judgments on historical experience and various other assumptions that we consider reasonable, and we evaluate these estimates and judgments on an ongoing basis. We refer to such estimates and judgments, discussed further below, as critical accounting policies and estimates.

Refer to Note 1 to our consolidated financial statements for further information on our other significant accounting policies.

Revenue recognition

We generate revenue by delivering ads on our website and mobile application. We recognize revenue only after transferring control of promised goods or services to customers, which occurs when a user clicks on an ad contracted on a CPC basis, views an ad contracted on CPM or CPD basis or views a video ad contracted on CPV basis. We recognize revenue over the service period for ads contracted on a CPD basis, which do not contain minimum impression guarantees. We typically bill customers on a CPC, CPM, CPV, or CPD basis, and our payment terms vary by customer type and location. The term between billing and payment due dates is not significant.

We recognize revenue only after satisfying our contractual performance obligations.

Income Taxes

We account for income taxes using the asset and liability method. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting and tax bases of assets and liabilities using the enacted statutory tax rates in effect for the years in which we expect the differences to reverse. We establish valuation allowances to reduce the total deferred tax assets to the amount we believe is more likely than not to be realized. In assessing the need for a valuation allowance, we consider all available evidence, both positive and negative, including past operating results and estimates of future taxable income. In the event that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for (benefit from) income taxes in the period in which such determination is made.

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We recognize tax benefits from uncertain tax positions when we believe it is more likely than not that the tax position is sustainable on examination by tax authorities based on its technical merits. We recognize taxes on Global Intangible Low-Taxed Income as incurred.

62