Pinterest, Inc. (NYSE: PINS) today announced financial results
for the quarter and year ended December 31, 2019.
- Q4 revenue grew 46% year over year to $400 million. 2019
revenue grew 51% year over year to $1,143 million.
- Global Monthly Active Users (MAUs) grew 26% year over year to
335 million.
- GAAP net loss was $36 million and $1,361 million for Q4 and
2019, respectively. Adjusted EBITDA was $77 million and $17 million
for Q4 and 2019, respectively.
"A strong Q4 marked the end of a year where we improved the
foundation of the Pinterest app with more inspiring
recommendations, faster performance and improved shopping
experiences," said Ben Silbermann, Pinterest CEO and Co-founder.
"In 2020, we continue to pursue our goal of making Pinterest the
Internet’s home for inspiration by focusing on delivering relevant
content, ads and shopping experiences so Pinners can easily go from
inspiration to action."
"We are pleased with the performance of our business in Q4 and
the many milestones we achieved in 2019," said Todd Morgenfeld,
Pinterest CFO. "We scaled the business to over $1 billion in annual
revenue, grew to over 300M monthly active users and opened 21 new
international advertising markets. We look forward to the
opportunities ahead of us as we continue to invest in the Pinner
and advertiser experience."
Q4 and Full Year 2019 Financial Highlights
The following table summarizes our consolidated financial
results (in thousands, except percentages, unaudited):
Three Months Ended December
31,
% Change
Year Ended December
31,
% Change
2019
2018
2019
2018
Revenue
$
399,898
$
273,184
46
%
$
1,142,761
$
755,932
51
%
Net income (loss)
$
(35,718)
$
47,016
(176)
%
$
(1,361,371)
$
(62,564)
(2,076)
%
Non-GAAP net income (loss)*
$
76,866
$
49,498
55
%
$
17,905
$
(47,390)
138
%
Adjusted EBITDA*
$
77,308
$
51,682
50
%
$
16,706
$
(39,003)
143
%
Adjusted EBITDA margin*
19
%
19
%
1
%
(5)
%
∗ 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.
Q4 and Full Year 2019 Other Highlights
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 December
31,
% Change
Year Ended December
31,
% Change
2019
2018
2019
2018
Revenue - Global
$
400
$
273
46
%
$
1,143
$
755
51
%
Revenue - United States
$
350
$
257
36
%
$
1,026
$
715
43
%
Revenue - International
$
50
$
17
202
%
$
117
$
41
187
%
MAUs - Global
335
265
26
%
335
265
26
%
MAUs - United States
88
82
8
%
88
82
8
%
MAUs - International
247
184
35
%
247
184
35
%
ARPU - Global
$
1.22
$
1.06
15
%
$
3.81
$
3.14
21
%
ARPU - United States
$
4.00
$
3.16
26
%
$
12.07
$
9.04
34
%
ARPU - International
$
0.21
$
0.09
122
%
$
0.54
$
0.25
115
%
Full Year 2020 Outlook
- Total revenue is expected to be up to $1.52 billion.
- Adjusted EBITDA margin is expected to be flat to up slightly
compared to 2019 Adjusted EBITDA margin of 1%.*
∗ With respect to projected 2020 Adjusted EBITDA margin, we are
unable to prepare a quantitative reconciliation of the projected
2020 Adjusted EBITDA in the calculation of projected 2020 Adjusted
EBITDA margin 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 income (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 could 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 fourth quarter and full year 2019
earnings release call will be available at
investor.pinterestinc.com. The call begins today at 2:30 PM (PT) /
5:30 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 Pinners 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; our ability to protect our
intellectual property; real or perceived inaccuracies in metrics
related to our business; disruption, degradation or interference
with the hosting services we use 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 Annual Report on
Form 10-K for the year ended December 31, 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 Annual Report on Form 10-K 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 February 6, 2020. 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 (loss)
from operations, non-GAAP net income (loss) and non-GAAP net income
(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 income (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 income (loss) exclude amortization
of acquired intangible assets and share-based compensation expense.
Non-GAAP income (loss) from operations is calculated by subtracting
non-GAAP costs and expenses from revenue. Non-GAAP net income
(loss) attributable to common stockholders is calculated by
subtracting any non-GAAP net income allocated to participating
securities from non-GAAP net income (loss). Non-GAAP net income
(loss) per share is calculated by dividing non-GAAP net income
(loss) attributable to common stockholders by diluted
weighted-average shares outstanding. We use Adjusted EBITDA,
Adjusted EBITDA margin, non-GAAP costs and expenses, non-GAAP
income (loss) from operations, non-GAAP net income (loss) and
non-GAAP net income (loss) 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
these non-GAAP financial measures 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 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 (loss) from
operations, non-GAAP net income (loss) and non-GAAP net income
(loss) 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.
With respect to projected 2020 Adjusted EBITDA margin, we are
unable to prepare a quantitative reconciliation of the projected
2020 Adjusted EBITDA in the calculation of projected 2020 Adjusted
EBITDA margin 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 income (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 could 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 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. We
present MAUs based on the number of MAUs measured on the last day
of the current period. 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)
December 31,
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$
649,666
$
122,509
Marketable securities
1,063,679
505,304
Accounts receivable, net of allowances of
$2,851 and $3,097 as of December 31, 2019 and 2018,
respectively
316,367
221,932
Prepaid expenses and other current
assets
37,522
39,607
Total current assets
2,067,234
889,352
Property and equipment, net
91,992
81,512
Operating lease right-of-use assets
188,251
145,203
Goodwill and intangible assets, net
14,576
14,071
Restricted cash
25,339
11,724
Other assets
5,925
10,869
Total assets
$
2,393,317
$
1,152,731
LIABILITIES, REDEEMABLE CONVERTIBLE
PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable
$
34,334
$
22,169
Accrued expenses and other current
liabilities
141,823
86,258
Total current liabilities
176,157
108,427
Operating lease liabilities
173,392
151,395
Other liabilities
20,063
22,073
Total liabilities
369,612
281,895
Commitments and contingencies
Redeemable convertible preferred stock,
$0.00001 par value; no shares authorized, issued or outstanding as
of December 31, 2019; 928,676 shares authorized, 308,373 shares
issued and outstanding as of December 31, 2018; aggregate
liquidation preference of $1,466,902 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 December 31, 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, 360,850 shares issued and outstanding
as of December 31, 2019; Class B common stock, $0.00001 par value,
1,333,333 shares authorized, 209,054 shares issued and outstanding
as of December 31, 2019; no shares authorized, issued or
outstanding as of December 31, 2018 for either class
6
—
Additional paid-in capital
4,229,778
252,212
Accumulated other comprehensive income
(loss)
647
(1,421)
Accumulated deficit
(2,206,726)
(845,355)
Total stockholders’ equity (deficit)
2,023,705
(594,563)
Total liabilities, redeemable convertible
preferred stock, and stockholders’ equity (deficit)
$
2,393,317
$
1,152,731
PINTEREST, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per
share amounts) (unaudited)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
Revenue
$
399,898
$
273,184
$
1,142,761
$
755,932
Costs and expenses:
Cost of revenue
96,274
68,308
358,903
241,584
Research and development
165,033
66,470
1,207,059
251,662
Sales and marketing
127,537
72,285
611,590
259,929
General and administrative
54,241
22,061
354,075
77,478
Total costs and expenses
443,085
229,124
2,531,627
830,653
Income (loss) from operations
(43,187)
44,060
(1,388,866)
(74,721)
Interest income
8,141
3,780
30,164
13,152
Interest expense and other income
(expense), net
(133)
(621)
(2,137)
(995)
Income (loss) before provision for income
taxes
(35,179)
47,219
(1,360,839)
(62,564)
Provision for income taxes
539
203
532
410
Net income (loss)
$
(35,718)
$
47,016
$
(1,361,371)
$
(62,974)
Less: Net income allocated to
participating securities
—
(47,016)
—
—
Net income (loss) attributable to common
stockholders
$
(35,718)
$
—
$
(1,361,371)
$
(62,974)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.06)
$
—
$
(3.24)
$
(0.50)
Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
562,396
127,273
420,473
127,091
PINTEREST, INC. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
(unaudited)
Year Ended December
31,
2019
2018
Operating activities
Net loss
$
(1,361,371)
$
(62,974)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
27,791
20,859
Share-based compensation
1,377,781
14,859
Other
(3,990)
1,027
Changes in assets and liabilities:
Accounts receivable
(94,224)
(86,094)
Prepaid expenses and other assets
7,161
18,142
Operating lease right-of-use assets
32,378
18,492
Accounts payable
11,636
6,533
Accrued expenses and other liabilities
31,890
26,336
Operating lease liabilities
(28,395)
(17,549)
Net cash provided by (used in) operating
activities
657
(60,369)
Investing activities
Purchases of property and equipment and
intangible assets
(33,783)
(22,194)
Purchases of marketable securities
(1,075,875)
(518,711)
Sales of marketable securities
162,198
94,381
Maturities of marketable securities
360,959
561,087
Other investing activities
—
(500)
Net cash provided by (used in) investing
activities
(586,501)
114,063
Financing activities
Proceeds from initial public offering, net
of underwriters' discounts and commissions
1,573,200
—
Proceeds from exercise of stock options,
net
41,344
671
Shares repurchased for tax withholdings on
release of restricted stock units
(475,015)
—
Fees paid for revolving credit
facility
—
(2,552)
Payment of deferred offering costs and
other financing activities
(11,331)
(335)
Net cash provided by (used in) financing
activities
1,128,198
(2,216)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
99
(157)
Net increase in cash, cash equivalents,
and restricted cash
542,453
51,321
Cash, cash equivalents, and restricted
cash, beginning of period
135,290
83,969
Cash, cash equivalents, and restricted
cash, end of period
$
677,743
$
135,290
Supplemental cash flow
information
Accrued property and equipment
$
4,772
$
1,884
Operating lease right-of-use assets
obtained in exchange for operating lease liabilities
$
76,387
$
11,416
Reconciliation of cash, cash
equivalents and restricted cash to consolidated balance
sheets
Cash and cash equivalents
$
649,666
$
122,509
Restricted cash included in prepaid
expenses and other current assets
2,738
1,057
Restricted cash
25,339
11,724
Total cash, cash equivalents, and
restricted cash
$
7,743
$
135,290
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL RESULTS (in thousands, except per share
amounts) (unaudited)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
Share-based compensation by
function:
Cost of revenue
$
2,018
$
15
$
31,758
$
83
Research and development
73,030
2,113
867,191
13,155
Sales and marketing
15,915
3
239,315
784
General and administrative
21,237
47
239,517
837
Total share-based compensation
$
112,200
$
2,178
$
1,377,781
$
14,859
Amortization of acquired intangible
assets by function:
Cost of revenue
$
94
$
—
$
329
$
199
General and administrative
290
304
1,166
526
Total amortization of acquired intangible
assets
$
384
$
304
$
1,495
$
725
Reconciliation of total costs and
expenses to non-GAAP costs and expenses:
Total costs and expenses
$
443,085
$
229,124
$
2,531,627
$
830,653
Share-based compensation
(112,200)
(2,178)
(1,377,781)
(14,859)
Amortization of acquired intangible
assets
(384)
(304)
(1,495)
(725)
Non-GAAP costs and expenses
$
330,501
$
226,642
$
1,152,351
$
815,069
Reconciliation of net income (loss) to
non-GAAP net income (loss):
Net income (loss)
$
(35,718)
$
47,016
$
(1,361,371)
$
(62,974)
Share-based compensation
112,200
2,178
1,377,781
14,859
Amortization of acquired intangible
assets
384
304
1,495
725
Non-GAAP net income (loss)
$
76,866
$
49,498
$
17,905
$
(47,390)
Non-GAAP net income (loss)
$
76,866
$
49,498
$
17,905
$
(47,390)
Less: Non-GAAP net income allocated to
participating securities(1)
—
(49,498)
(17,905)
—
Non-GAAP net income (loss) attributable to
common stockholders
$
76,866
$
—
$
—
$
(47,390)
Weighted-average shares outstanding for
net loss per share, basic and diluted
562,396
127,273
420,473
127,091
Weighted-average dilutive
securities(2)
77,165
—
—
—
Diluted weighted-average shares
outstanding for Non-GAAP net income (loss) per share
639,561
127,273
420,473
127,091
Net loss per share
$
(0.06)
$
—
$
(3.24)
$
(0.50)
Non-GAAP net income (loss) per share
$
0.12
$
—
$
—
$
(0.37)
(1)
Represents assumed noncumulative dividends on undistributed
earnings that, if declared, would have been distributed to holders
of our redeemable convertible preferred stock.
(2)
Gives effect to potential common stock instruments such as stock
options and unvested restricted stock units.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL RESULTS (in thousands) (unaudited)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
Reconciliation of net income (loss) to
Adjusted EBITDA:
Net income (loss)
$
(35,718)
$
47,016
$
(1,361,371)
$
(62,974)
Depreciation and amortization
8,295
5,444
27,791
20,859
Share-based compensation
112,200
2,178
1,377,781
14,859
Interest income
(8,141)
(3,780)
(30,164)
(13,152)
Interest expense and other (income)
expense, net
133
621
2,137
995
Provision for income taxes
539
203
532
410
Adjusted EBITDA
$
77,308
$
51,682
$
16,706
$
(39,003)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200206005904/en/
Investor relations: Doug Clark ir@pinterest.com
Media: Mike Mayzel press@pinterest.com
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