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Pinterest Announces First Quarter 2023 Results

04/27/2023

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.

 

Press:
Tessa Chen
press@pinterest.com

Investor relations:
Neil Doshi
ir@pinterest.com

Source: Pinterest, Inc.
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