Pinterest, Inc. (NYSE: PINS) today announced financial results
for the quarter ended June 30, 2019.
"We constantly aim to make Pinterest more personal, relevant and
useful to our users. Our MAUs hit 300 million at the end of Q2 as
we built and expanded products to support this vision," said
Pinterest CEO Ben Silbermann. "We also continued to grow and
diversify our advertiser base and improve advertisers’ ability to
measure the effectiveness of their ad spend. This is part of our
larger and ongoing effort to create value for businesses on
Pinterest."
"Q2 revenue grew 62% year-over-year to $261 million. The
momentum we have seen over the past several quarters continued as
more advertisers recognize the power of our platform to reach
consumers," said Todd Morgenfeld, CFO. "We remain encouraged by
trends in U.S. ARPU and by user growth in international markets.
While our net margin declined due to RSU expense related to our
IPO, our strong revenue performance and focus on execution allowed
us to expand Adjusted EBITDA margins by 10 percentage points
year-over-year."
Q2 2019 Financial Highlights
- Q2 revenue grew 62% year-over-year, continuing the momentum we
have seen over the past several quarters as more advertisers
recognize the power of our platform to reach consumers. Our
year-over-year growth was also positively impacted by the later
timing of Easter vs. in 2018.
- Our GAAP net loss of $1.16 billion was impacted by RSU expense
recorded in connection with our initial public offering. This
quarter included a one-time RSU catch-up charge for all prior
periods as a result of the company meeting the performance vesting
condition tied to the IPO for all historical RSUs. Our Adjusted
EBITDA was $(26) million, as EBITDA margin expanded by 10
percentage points year-over-year.
The following table summarizes our consolidated financial
results (in thousands, except percentages, unaudited):
Three Months Ended June
30,
% Change
2019
2018
Revenue
$
261,249
$
161,192
62
%
Net loss
$
(1,159,501
)
$
(38,407
)
(2,919
)%
Non-GAAP net loss*
$
(24,538
)
$
(34,189
)
28
%
Adjusted EBITDA*
$
(26,037
)
$
(31,898
)
18
%
Adjusted EBITDA margin*
(10
)%
(20
)%
* 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.
Q2 2019 Other Highlights
- Our Monthly Active Users (MAUs) hit 300 million during Q2, and
we continued to focus on improving Pinners’ experience to drive
future user growth and engagement. During the quarter, we made
Pinterest more personal by improving search recommendations, and we
also made Pinterest more useful by adding more video content and
shoppable products.
- Helping businesses succeed continues to be a priority at
Pinterest. In Q2, we made progress on a number of fronts, including
the internationalization of our ads business, simplifying our ad
systems for smaller businesses and improving advertisers’ ability
to measure the effectiveness of their ad spend.
The following table sets forth our revenue, MAUs and average
revenue per user ("ARPU") based on the geographic location of our
users (in millions, except ARPU and percentages, unaudited):
Three Months Ended June
30,
% Change
2019
2018
Revenue - Global
$
261
$
161
62
%
Revenue - United States
$
238
$
153
55
%
Revenue - International
$
24
$
8
199
%
MAUs - Global
300
231
30
%
MAUs - United States
85
75
13
%
MAUs - International
215
156
38
%
ARPU - Global
$
0.88
$
0.69
29
%
ARPU - United States
$
2.80
$
1.98
41
%
ARPU - International
$
0.11
$
0.05
123
%
Full year 2019 outlook
- Total revenue is expected to be between $1,095 million and
$1,115 million, compared to our prior forecast of $1,055 million
and $1,080 million.
- Adjusted EBITDA is expected to be between $(50) million and
$(25) million, compared to our prior forecast of $(70) million and
$(45) million.*
* With respect to projected 2019 Adjusted EBITDA, we are unable
to prepare a quantitative reconciliation without unreasonable
efforts due to the high variability, complexity and low visibility
with respect to certain items such as taxes and interest income
that we are unable to quantify and that would be required to
reconcile projected Adjusted EBITDA to net loss, the nearest GAAP
equivalent. We expect the variability of these items to have a
potentially unpredictable and potentially significant impact on
future GAAP financial results, and, as such, we also believe that
any reconciliations provided would imply a degree of precision that
would be confusing or misleading to investors. For more information
on this non-GAAP financial measure, please see "―About non-GAAP
financial measures."
Webcast and conference call information
A live audio webcast of our second quarter 2019 earnings release
call will be available at investor.pinterestinc.com. The call
begins today at 2:00 PM (PT) / 5:00 PM (ET). We have also posted to
our investor relations website a letter to shareholders. This press
release, including the reconciliations of certain non-GAAP measures
to their nearest comparable GAAP measures, letter to shareholders
and slide presentation are also available. 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: our ability to attract and retain users and engagement
levels; our ability to provide useful and relevant content; 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 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 attain and sustain profitability; decisions that reduce
short-term revenue or profitability or do not produce expected
long-term benefits; 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 quarter ended June 30, 2019,
which is available on our investor relations website at
investor.pinterestinc.com and on the SEC website at www.sec.gov.
Additional information will be made available in our quarterly
report on Form 10-Q and other future reports that we may file with
the SEC from time to time, which could cause actual results to vary
from expectations. All information provided in this release and in
the attachments is as of August 1, 2019. 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 loss from
operations, non-GAAP net loss and non-GAAP net loss per share. 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 loss adjusted to exclude
depreciation and amortization expense, share-based compensation
expense, interest income, interest expense and other income
(expense), net and provision for income taxes. 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 loss exclude amortization of
acquired intangible assets and share-based compensation expense.
Non-GAAP loss from operations is calculated by subtracting non-GAAP
costs and expenses from revenue. Non-GAAP net loss per share is
calculated by dividing non-GAAP net loss by weighted-average shares
outstanding. We use Adjusted EBITDA, Adjusted EBITDA margin,
non-GAAP costs and expenses, non-GAAP loss from operations,
non-GAAP net loss and non-GAAP net loss per share to evaluate our
operating results and for financial and operational decision-making
purposes. We believe Adjusted EBITDA, Adjusted EBITDA margin,
non-GAAP costs and expenses, non-GAAP loss from operations,
non-GAAP net loss and non-GAAP net loss per share 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 loss from operations, non-GAAP net loss and
non-GAAP net loss 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 loss from operations,
non-GAAP net loss and non-GAAP net loss 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 loss from operations, non-GAAP net loss and non-GAAP net
loss per share rather than net loss, net margin, total costs and
expenses, loss from operations, net loss and net 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.
With respect to projected 2019 Adjusted EBITDA, we are unable to
prepare a quantitative reconciliation without unreasonable efforts
due to the high variability, complexity and low visibility with
respect to certain items such as taxes and interest income that we
are unable to quantify and that would be required to reconcile
projected Adjusted EBITDA to net loss, the nearest GAAP equivalent.
We expect the variability of these items to have a potentially
unpredictable and potentially significant impact on future GAAP
financial results, and, as such, we also believe that any
reconciliations provided would imply a degree of precision that
would be confusing or misleading to investors.
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 a
logged-in Pinterest user who visits our website or opens our mobile
application at least once during the 30-day period ending on the
date of measurement. 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 between 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 our
methodology.
PINTEREST, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except par
value)
(unaudited)
June 30,
December 31,
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$
1,408,739
$
122,509
Marketable securities
442,009
505,304
Accounts receivable, net of allowances of
$2,533 and $3,097 as of June 30, 2019 and December 31, 2018,
respectively
202,957
221,932
Prepaid expenses and other current
assets
52,711
39,607
Total current assets
2,106,416
889,352
Property and equipment, net
84,612
81,512
Operating lease right-of-use assets
153,618
145,203
Goodwill and intangible assets, net
15,364
14,071
Restricted cash
23,315
11,724
Other assets
3,851
10,869
Total assets
$
2,387,176
$
1,152,731
LIABILITIES, REDEEMABLE CONVERTIBLE
PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable
$
30,524
$
22,169
Accrued expenses and other current
liabilities
109,373
86,258
Total current liabilities
139,897
108,427
Operating lease liabilities
155,847
151,395
Other liabilities
18,192
22,073
Total liabilities
313,936
281,895
Commitments and contingencies
Redeemable convertible preferred stock,
$0.00001 par value; no shares authorized, issued or outstanding as
of June 30, 2019; 928,676 shares authorized, 308,373 shares issued
and outstanding as of December 31, 2018
—
1,465,399
Stockholders’ equity (deficit):
Common stock, $0.00001 par value, no
shares authorized, issued or outstanding as of June 30, 2019;
1,932,500 shares authorized, 127,298 shares issued and outstanding
as of December 31, 2018
—
1
Class A common stock, $0.00001 par value,
6,666,667 shares authorized, 127,017 shares issued and outstanding
as of June 30, 2019; Class B common stock, $0.00001 par value,
1,333,333 shares authorized, 415,688 shares issued and outstanding
as of June 30, 2019; no shares authorized, issued or outstanding as
of December 31, 2018 for either class
5
—
Additional paid-in capital
4,118,988
252,212
Accumulated other comprehensive income
(loss)
523
(1,421
)
Accumulated deficit
(2,046,276
)
(845,355
)
Total stockholders’ equity (deficit)
2,073,240
(594,563
)
Total liabilities, redeemable convertible
preferred stock, and stockholders’ equity (deficit)
$
2,387,176
$
1,152,731
PINTEREST, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended June
30,
2019
2018
Revenue
$
261,249
$
161,192
Costs and expenses:
Cost of revenue
105,415
57,974
Research and development
801,879
61,604
Sales and marketing
296,919
65,148
General and administrative
224,179
17,834
Total costs and expenses
1,428,392
202,560
Loss from operations
(1,167,143
)
(41,368
)
Other income (expense), net:
Interest income
8,127
3,187
Interest expense and other income
(expense), net
(448
)
(214
)
Loss before provision for income taxes
(1,159,464
)
(38,395
)
Provision for income taxes
37
12
Net loss
$
(1,159,501
)
$
(38,407
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(2.62
)
$
(0.30
)
Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
443,340
127,011
PINTEREST, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended June
30,
2019
2018
Operating activities
Net loss
$
(1,200,921
)
$
(91,116
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
12,203
10,298
Share-based compensation
1,135,293
8,793
Other
(2,713
)
1,287
Changes in assets and liabilities:
Accounts receivable
19,615
14,599
Prepaid expenses and other assets
(6,174
)
11,303
Operating lease right-of-use assets
14,040
9,063
Accounts payable
7,189
3,286
Accrued expenses and other liabilities
15,310
10,704
Operating lease liabilities
(10,217
)
(7,044
)
Net cash used in operating activities
(16,375
)
(28,827
)
Investing activities
Purchases of property and equipment and
intangible assets
(11,914
)
(13,585
)
Purchases of marketable securities
(159,315
)
(298,425
)
Sales of marketable securities
60,239
42,392
Maturities of marketable securities
166,288
338,028
Net cash provided by investing
activities
55,298
68,410
Financing activities
Proceeds from initial public offering, net
of underwriters' discounts and commissions
1,573,200
—
Proceeds from exercise of stock options,
net
702
861
Shares repurchased for tax withholdings on
release of restricted stock units
(302,675
)
—
Payment of deferred offering costs and
other financing activities
(10,103
)
—
Net cash provided by financing
activities
1,261,124
861
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(17
)
(110
)
Net increase in cash, cash equivalents,
and restricted cash
1,300,030
40,334
Cash, cash equivalents, and restricted
cash, beginning of period
135,290
83,969
Cash, cash equivalents, and restricted
cash, end of period
$
1,435,320
$
124,303
Supplemental cash flow
information
Accrued property and equipment
$
4,618
$
4,283
Operating lease right-of-use assets
obtained in exchange for operating lease liabilities
$
23,381
$
2,912
Reconciliation of cash, cash
equivalents and restricted cash to condensed consolidated balance
sheets
Cash and cash equivalents
$
1,408,739
$
112,472
Restricted cash included in prepaid
expenses and other current assets
3,266
851
Restricted cash
23,315
10,980
Total cash, cash equivalents, and
restricted cash
$
1,435,320
$
124,303
Reconciliation of GAAP to
non-GAAP financial results
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended June
30,
2019
2018
Share-based compensation by
function:
Cost of revenue
$
28,157
$
20
Research and development
709,996
3,608
Sales and marketing
202,128
352
General and administrative
194,318
(21
)
Total share-based compensation
$
1,134,599
$
3,959
Amortization of acquired intangible
assets by function:
Cost of revenue
$
141
$
185
General and administrative
223
74
Total amortization of acquired intangible
assets
$
364
$
259
Reconciliation of total costs and
expenses to non-GAAP costs and expenses:
Total costs and expenses
$
1,428,392
$
202,560
Share-based compensation
(1,134,599
)
(3,959
)
Amortization of acquired intangible
assets
(364
)
(259
)
Non-GAAP costs and expenses
$
293,429
$
198,342
Reconciliation of net loss to non-GAAP
net loss:
Net loss
$
(1,159,501
)
$
(38,407
)
Share-based compensation
1,134,599
3,959
Amortization of acquired intangible
assets
364
259
Non-GAAP net loss
$
(24,538
)
$
(34,189
)
Weighted-average shares outstanding
443,340
127,011
Net loss per share
$
(2.62
)
$
(0.30
)
Non-GAAP net loss per share
$
(0.06
)
$
(0.27
)
Reconciliation of net loss to Adjusted
EBITDA
Net loss
$
(1,159,501
)
$
(38,407
)
Depreciation and amortization
6,507
5,511
Share-based compensation
1,134,599
3,959
Interest income
(8,127
)
(3,187
)
Interest expense and other (income)
expense, net
448
214
Provision for income taxes
37
12
Adjusted EBITDA
$
(26,037
)
$
(31,898
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190801005948/en/
Investor relations: Jane Penner ir@pinterest.com
Media: Mike Mayzel press@pinterest.com
Pinterest (NYSE:PINS)
Historical Stock Chart
From Feb 2024 to Mar 2024
Pinterest (NYSE:PINS)
Historical Stock Chart
From Mar 2023 to Mar 2024