Boaty and I were looking at RDDT and PINS – PINS is actually a very good play:
🚢 Pinterest delivered a strong Q1 2025 performance that showcased the platform’s resilient business model and superior fundamentals compared to Reddit, making it the clear winner for investors seeking exposure to the social media advertising space without Reddit’s excessive valuation and existential risks.
Q1 2025 Earnings Performance – Solid Execution Despite Miss
Revenue Beat: Pinterest reported $855 million in Q1 revenue, representing impressive 16% year-over-year growth (17% on constant currency basis) and beating analyst expectations. This compares favorably to Reddit’s $392.4 million quarterly revenue, demonstrating Pinterest’s 2.2x larger scale and more mature monetization.
Earnings Miss with Context: Pinterest delivered $0.23 adjusted EPS, missing the $0.26 consensus estimate by $0.03. However, this miss was primarily due to increased investment in AI and international expansion rather than fundamental business deterioration. More importantly, Pinterest achieved positive net income of $8.9 million, a dramatic turnaround from the $24.8 million loss in Q1 2024.
User Growth Momentum: The platform reached a record 570 million global monthly active users, up 10% year-over-year and beating expectations of 565 million. This user base is significantly larger than Reddit’s 108.1 million daily actives, providing much greater scale for advertiser reach.
Strong Margins: Pinterest maintained healthy adjusted EBITDA of $172 million (20.1% margin), demonstrating the platform’s ability to generate substantial cash flows from its advertising model – a stark contrast to Reddit’s razor-thin profitability in just its first profitable quarter.
Valuation Advantage – The Key Differentiator
Reasonable Multiples: At $31.11 per share, Pinterest trades at a forward P/E of 16x compared to Reddit’s astronomical 59x forward P/E. This represents a 73% valuation discount despite Pinterest’s superior scale, profitability track record, and user engagement metrics23.
