Pinterest, Inc. (NYSE: PINS) today announced financial results
for the quarter ended March 31, 2023.
- Q1 revenue grew 5% year over year to $603 million.
- Global Monthly Active Users (MAUs) increased 7% year over year
to 463 million.
- GAAP net loss was $209 million for Q1. Adjusted EBITDA was $27
million for Q1.
- Total costs and expenses were $846 million, including $121
million of restructuring charges.
- We repurchased 2.8 million shares of our Class A common stock
for $72 million. $428 million remains available for repurchases
under our $500 million authorization.
“I’m proud of how our team is continuing to execute,” said Bill
Ready, CEO of Pinterest. “In Q1, we grew our business globally
through improved content relevance, shoppability, and by delivering
strong results for our advertisers. Today, we’re taking meaningful
steps towards expanding our ads business by opening up third-party
ad demand on Pinterest, starting with Amazon as our first partner.
Looking forward, we are excited to further leverage and satisfy the
strong commercial intent of our users and deliver long-term
shareholder value.”
Q1 2023 Financial Highlights
The following table summarizes our consolidated financial
results (in thousands, except percentages, unaudited):
Three Months Ended March
31,
2023
2022
% Change
Revenue
$
602,581
$
574,885
5
%
Net loss
$
(208,579
)
$
(5,281
)
(3,850
)%
Non-GAAP net income*
$
57,704
$
68,990
(16
)%
Adjusted EBITDA*
$
26,969
$
76,795
(65
)%
Adjusted EBITDA margin*
4
%
13
%
_________________________
* For more information on these non-GAAP
financial measures, please see "―About non-GAAP financial measures"
and the tables under "―Reconciliation of GAAP to non-GAAP financial
results" included at the end of this release.
Q1 2023 Other Highlights
The following table sets forth our revenue, MAUs and ARPU based
on the geographic location of our users (in millions, except ARPU
and percentages, unaudited):
Three Months Ended March
31,
2023
2022
% Change
Revenue - Global
$
603
$
575
5
%
Revenue - U.S. and Canada
$
486
$
470
3
%
Revenue - Europe
$
93
$
87
6
%
Revenue - Rest of World
$
24
$
17
38
%
MAUs - Global
463
433
7
%
MAUs - U.S. and Canada
95
94
1
%
MAUs - Europe
128
120
7
%
MAUs - Rest of World
240
220
9
%
ARPU - Global
$
1.32
$
1.33
(1
)%
ARPU - U.S. and Canada
$
5.11
$
4.98
3
%
ARPU - Europe
$
0.74
$
0.72
2
%
ARPU - Rest of World
$
0.10
$
0.08
27
%
Guidance
Our current expectation is that Q2 revenue will grow roughly
in-line with the growth we saw in Q4 2022 and Q1 2023. We expect
our Q2 non-GAAP operating expenses to grow low teens on a
percentage basis quarter-over-quarter.*
We intend to provide further detail on our outlook during the
conference call.
_________________________
*We have not provided the forward-looking
GAAP equivalents for certain forward-looking non-GAAP operating
expenses or a GAAP reconciliation as a result of the uncertainty
regarding, and the potential variability of, reconciling items such
as share-based compensation expense, which is impacted by, among
other things, employee retention and decisions around future equity
grants to employees. Accordingly, a reconciliation of these
non-GAAP guidance metrics to their corresponding GAAP equivalents
is not available without unreasonable effort. However, it is
important to note that material changes to reconciling items could
have a significant effect on future GAAP results and, as such, we
also believe that any reconciliations provided would imply a degree
of precision that could be confusing or misleading to
investors.
Webcast and conference call information
A live audio webcast of our first quarter 2023 earnings release
call will be available at investor.pinterestinc.com. The call
begins today at 1:30 PM (PT) / 4:30 PM (ET). This press release,
including the reconciliations of certain non-GAAP measures to their
nearest comparable GAAP measures and slide presentation are also
available. We will not be publishing a letter to shareholders this
quarter. A recording of the webcast will be available at
investor.pinterestinc.com for 90 days.
We have used, and intend to continue to use, our investor
relations website at investor.pinterestinc.com as a means of
disclosing material nonpublic information and for complying with
our disclosure obligations under Regulation FD.
Forward-looking statements
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Exchange Act of 1934, as amended,
about us and our industry that involve substantial risks and
uncertainties, including, among other things, statements about our
future operational and financial performance. Words such as
"believe," "project," "may," "will," "estimate," "continue,"
"anticipate," "intend," "expect," "plan" and similar expressions
are intended to identify forward-looking statements. These
forward-looking statements are only predictions and may differ
materially from actual results due to a variety of factors
including: general economic and political uncertainty in global
markets and a worsening of global economic conditions or low levels
of economic growth, including inflation, fear of recession, foreign
exchange fluctuations and supply-chain issues as well as events
such as Russia's invasion of Ukraine; our ability to provide useful
and relevant content; our ability to attract and retain creators
that create relevant and engaging content on our platform; risks
associated with new products and changes to existing products as
well as other new business initiatives; our ability to maintain and
enhance our brand and reputation; compromises in security; our
financial performance and fluctuations in operating results; our
dependency on online application stores' and internet search
engines’ methodologies and policies; discontinuation, disruptions
or outages in authentication by third-party login providers;
changes by third-party login providers that restrict our access or
ability to identify users; competition; our ability to scale our
business and revenue model; our reliance on advertising revenue and
our ability to attract and retain advertisers and effectively
measure advertising campaigns; our ability to effectively manage
growth and expand and monetize our platform internationally; our
lack of operating history and ability to sustain profitability;
decisions that reduce short-term revenue or profitability or do not
produce expected long-term benefits; the impact of the COVID-19
pandemic, including its impact on our business as well as on global
and regional economies and economic activity; risks associated with
government actions, laws and regulations that could restrict access
to our products or impair our business; litigation and government
inquiries; privacy, data and other regulatory concerns; real or
perceived inaccuracies in metrics related to our business;
disruption, degradation or interference with our hosting services
and infrastructure; our ability to attract and retain personnel;
and the dual class structure of our common stock and its effect of
concentrating voting control with stockholders who held our capital
stock prior to the completion of our initial public offering. These
and other potential risks and uncertainties that could cause actual
results to differ from the results predicted are more fully
detailed in our Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2023, which is available on our investor
relations website at investor.pinterestinc.com and on the SEC
website at www.sec.gov. All information provided in this release
and in the earnings materials is as of April 27, 2023. Undue
reliance should not be placed on the forward-looking statements in
this press release, which are based on information available to us
on the date hereof. We undertake no duty to update this information
unless required by law.
About non-GAAP financial measures
To supplement our condensed consolidated financial statements,
which are prepared and presented in accordance with generally
accepted accounting principles in the United States ("GAAP"), we
use the following non-GAAP financial measures: Adjusted EBITDA,
Adjusted EBITDA margin, non-GAAP costs and expenses (including
non-GAAP cost of revenue, research and development, sales and
marketing, and general and administrative), non-GAAP income from
operations, non-GAAP net income, non-GAAP net income per share and
constant currency revenue growth rates. The presentation of these
financial measures is not intended to be considered in isolation,
as a substitute for or superior to the financial information
prepared and presented in accordance with GAAP. Investors are
cautioned that there are material limitations associated with the
use of non-GAAP financial measures as an analytical tool. In
addition, these measures may be different from non-GAAP financial
measures used by other companies, limiting their usefulness for
comparative purposes. We compensate for these limitations by
providing specific information regarding GAAP amounts excluded from
these non-GAAP financial measures.
We define Adjusted EBITDA as net income (loss) adjusted to
exclude depreciation and amortization expense, share-based
compensation expense, interest income (expense), net, other income
(expense), net, provision for (benefit from) income taxes and
restructuring charges. Adjusted EBITDA margin is calculated by
dividing Adjusted EBITDA by revenue. Non-GAAP costs and expenses
(including non-GAAP cost of revenue, research and development,
sales and marketing, and general and administrative) and non-GAAP
net income exclude amortization of acquired intangible assets,
share-based compensation expense and restructuring charges.
Non-GAAP income from operations is calculated by subtracting
non-GAAP costs and expenses from revenue. Non-GAAP net income per
share is calculated by dividing non-GAAP net income by diluted
weighted-average shares outstanding. We use Adjusted EBITDA,
Adjusted EBITDA margin, non-GAAP costs and expenses, non-GAAP
income from operations, non-GAAP net income and non-GAAP net income
per share to evaluate our operating results and for financial and
operational decision-making purposes. We believe these non-GAAP
financial measures help identify underlying trends in our business
that could otherwise be masked by the effect of the income and
expenses they exclude. We also believe Adjusted EBITDA, Adjusted
EBITDA margin, non-GAAP costs and expenses, non-GAAP income from
operations, non-GAAP net income and non-GAAP net income per share
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
Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP costs and
expenses, non-GAAP income from operations, non-GAAP net income and
non-GAAP net income per share to assist potential investors in
seeing our operating results through the eyes of management and
because we believe these measures provide an additional tool for
investors to use in comparing our operating results over multiple
periods with other companies in our industry. There are a number of
limitations related to the use of Adjusted EBITDA, Adjusted EBITDA
margin, non-GAAP costs and expenses, non-GAAP income from
operations, non-GAAP net income and non-GAAP net income per share
rather than net income (loss), net margin, total costs and
expenses, income (loss) from operations, net income (loss) and net
income (loss) per share, respectively, 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, which has been, and will continue to be for
the foreseeable future, a significant recurring expense and an
important part of our compensation strategy.
For a reconciliation of these non-GAAP financial measures to the
most directly comparable GAAP financial measures, please see the
tables under "―Reconciliation of GAAP to non-GAAP financial
results" included at the end of this release.
Limitation of key metrics and other data
The numbers for our key metrics, which include our MAUs and
ARPU, are calculated using internal company data based on the
activity of user accounts. We define a monthly active user 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 do not include Shuffles users unless they would
otherwise qualify as MAUs. Unless otherwise indicated, we present
MAUs based on the number of MAUs measured on the last day of the
current period. 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 the average
of the number of MAUs in that geography during the 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. We calculate ARPU by
geography based on our estimate of the geography in which
revenue-generating activities occur. We use these metrics to assess
the growth and health of the overall business and believe that MAUs
and ARPU best reflect our ability to attract, retain, engage and
monetize our users, and thereby drive revenue. While these numbers
are based on what we believe to be reasonable estimates of our user
base for the applicable period of measurement, there are inherent
challenges in measuring usage of our products across large online
and mobile populations around the world. In addition, we are
continually seeking to improve our estimates of our user base, and
such estimates may change due to improvements or changes in
technology or our methodology.
PINTEREST, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except par
value)
(unaudited)
March 31,
December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
1,651,242
$
1,611,063
Marketable securities
1,078,487
1,087,164
Accounts receivable, net of allowances of
$13,085 and $12,672 as of March 31, 2023 and December 31, 2022,
respectively
487,964
681,532
Prepaid expenses and other current
assets
80,695
74,918
Total current assets
3,298,388
3,454,677
Property and equipment, net
30,272
59,575
Operating lease right-of-use assets
97,606
206,253
Goodwill and intangible assets, net
122,982
124,822
Other assets
17,174
17,403
Total assets
$
3,566,422
$
3,862,730
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
77,284
$
87,920
Accrued expenses and other current
liabilities
244,639
292,611
Total current liabilities
321,923
380,531
Operating lease liabilities
159,506
178,694
Other liabilities
25,254
21,851
Total liabilities
506,683
581,076
Commitments and contingencies
Stockholders’ equity:
Class A common stock, $0.00001 par value,
6,666,667 shares authorized, 594,834 and 593,918 shares issued and
outstanding as of March 31, 2023 and December 31, 2022,
respectively; Class B common stock, $0.00001 par value, 1,333,333
shares authorized, 89,323 and 89,284 shares issued and outstanding
as of March 31, 2023 and December 31, 2022, respectively
7
7
Additional paid-in capital
5,390,101
5,407,724
Accumulated other comprehensive loss
(7,132
)
(11,419
)
Accumulated deficit
(2,323,237
)
(2,114,658
)
Total stockholders’ equity
3,059,739
3,281,654
Total liabilities and stockholders’
equity
$
3,566,422
$
3,862,730
PINTEREST, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended March
31,
2023
2022
Revenue
$
602,581
$
574,885
Costs and expenses:
Cost of revenue
170,926
146,070
Research and development
266,346
195,548
Sales and marketing
201,131
173,953
General and administrative
207,864
62,979
Total costs and expenses
846,267
578,550
Loss from operations
(243,686
)
(3,665
)
Interest income (expense), net
24,901
712
Other income (expense), net
322
(1,200
)
Loss before provision for (benefit from)
income taxes
(218,463
)
(4,153
)
Provision for (benefit from) income
taxes
(9,884
)
1,128
Net loss
$
(208,579
)
$
(5,281
)
Net loss per share, basic and diluted
$
(0.31
)
$
(0.01
)
Weighted-average shares used in computing
net loss per share, basic and diluted
681,140
656,899
PINTEREST, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended March
31,
2023
2022
Operating activities
Net loss
$
(208,579
)
$
(5,281
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
6,212
7,220
Share-based compensation
143,122
73,240
Impairment and abandonment charges for
leases and leasehold improvements
112,934
—
Other
(1,346
)
2,978
Changes in assets and liabilities:
Accounts receivable
192,523
180,203
Prepaid expenses and other assets
(5,773
)
(8,285
)
Operating lease right-of-use assets
25,163
12,394
Accounts payable
(11,031
)
(4,638
)
Accrued expenses and other liabilities
(43,659
)
(31,620
)
Operating lease liabilities
(26,109
)
(12,822
)
Net cash provided by operating
activities
183,457
213,389
Investing activities
Purchases of property and equipment and
intangible assets
(1,990
)
(6,902
)
Purchases of marketable securities
(331,608
)
(155,181
)
Sales of marketable securities
29,271
4,168
Maturities of marketable securities
318,490
207,319
Net cash provided by investing
activities
14,163
49,404
Financing activities
Proceeds from exercise of stock options,
net
2,400
1,036
Repurchases of Class A common stock
(69,476
)
—
Shares repurchased for tax withholdings on
release of restricted stock units and restricted stock awards
(91,508
)
—
Net cash (used in) provided by financing
activities
(158,584
)
1,036
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
1,142
333
Net increase in cash, cash equivalents and
restricted cash
40,178
264,162
Cash, cash equivalents and restricted
cash, beginning of period
1,617,660
1,427,064
Cash, cash equivalents and restricted
cash, end of period
$
1,657,838
$
1,691,226
Supplemental cash flow
information
Repurchases of Class A common stock in
accrued expenses and other current liabilities
$
2,161
$
—
Operating lease right-of-use assets
obtained in exchange for operating lease liabilities
$
803
$
7,085
Reconciliation of cash, cash
equivalents and restricted cash to condensed consolidated balance
sheets
Cash and cash equivalents
$
1,651,242
$
1,683,792
Restricted cash included in prepaid
expenses and other current assets
2,243
1,137
Restricted cash included in other
assets
4,353
6,297
Total cash, cash equivalents and
restricted cash
$
1,657,838
$
1,691,226
PINTEREST, INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL RESULTS
(in thousands)
(unaudited)
Three Months Ended March
31,
2023
2022
Share-based compensation by
function:
Cost of revenue
$
2,309
$
1,194
Research and development
94,265
52,890
Sales and marketing
19,189
11,769
General and administrative
27,359
7,387
Total share-based compensation
$
143,122
$
73,240
Amortization of acquired intangible
assets by function:
Cost of revenue
$
1,508
$
699
Sales and marketing
135
135
General and administrative
197
197
Total amortization of acquired intangible
assets
$
1,840
$
1,031
Restructuring charges by
function:
Research and development
$
4,093
$
—
Sales and marketing
2,677
—
General and administrative
114,551
—
Total restructuring charges
$
121,321
$
—
Reconciliation of total costs and
expenses to non-GAAP costs and expenses:
Total costs and expenses
$
846,267
$
578,550
Share-based compensation
(143,122
)
(73,240
)
Amortization of acquired intangible
assets
(1,840
)
(1,031
)
Restructuring charges
(121,321
)
—
Total non-GAAP costs and expenses
$
579,984
$
504,279
Reconciliation of net loss to Adjusted
EBITDA:
Net loss
$
(208,579
)
$
(5,281
)
Depreciation and amortization
6,212
7,220
Share-based compensation
143,122
73,240
Interest income (expense), net
(24,901
)
(712
)
Other income (expense), net
(322
)
1,200
Provision for (benefit from) income
taxes
(9,884
)
1,128
Restructuring charges
121,321
—
Adjusted EBITDA
$
26,969
$
76,795
PINTEREST, INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL RESULTS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended March
31,
2023
2022
Reconciliation of net loss to non-GAAP
net income:
Net loss
$
(208,579
)
$
(5,281
)
Share-based compensation
143,122
73,240
Amortization of acquired intangible
assets
1,840
1,031
Restructuring charges
121,321
—
Non-GAAP net income
$
57,704
$
68,990
Basic weighted-average shares used in
computing net loss per share
681,140
656,899
Weighted-average dilutive
securities(1)
18,731
29,160
Diluted weighted-average shares used in
computing non-GAAP net income per share
699,871
686,059
Non-GAAP net income per share
$
0.08
$
0.10
_________________________
(1)
Gives effect to potential common stock
instruments such as stock options, unvested restricted stock units
and unvested restricted stock awards.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230427005895/en/
Press: Tessa Chen press@pinterest.com
Investor relations: Neil Doshi ir@pinterest.com
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