Pinterest, Inc. (NYSE: PINS) today announced financial results
for the quarter ended September 30, 2020.
- Q3 revenue grew 58% year over year to $443 million.
- Global Monthly Active Users (MAUs) grew 37% year over year to
442 million.
- GAAP net loss was $(94) million for Q3. Adjusted EBITDA was $93
million.
“More than ever before, people are coming to Pinterest to get
inspiration for their lives—everything from planning early for a
socially distant Halloween to creating great home schools for their
kids,” said Ben Silbermann, CEO and co-founder, Pinterest. “Our top
priority is to continue making Pinterest home to the most inspiring
and actionable content. This quarter we launched a set of tools to
empower creators to show and share their ideas with people who are
ready to act.”
“The strong momentum our business experienced in July continued
throughout the rest of the third quarter. We’re extremely pleased
with the broad based strength of our business, driven by recovering
advertiser demand as well as positive returns from our investments
in advertiser products and international expansion,” said Todd
Morgenfeld, CFO and Head of Business Operations, Pinterest.
Q3 2020 Financial Highlights
The following table summarizes our consolidated financial
results (in thousands, except percentages, unaudited):
Three Months Ended September
30,
% Change
2020
2019
Revenue
$
442,616
$
279,703
58
%
Net loss
$
(94,220
)
$
(124,732
)
24
%
Non-GAAP net income*
$
87,164
$
5,960
1,362
%
Adjusted EBITDA*
$
93,042
$
3,871
2,304
%
Adjusted EBITDA margin*
21
%
1
%
∗
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.
Q3 2020 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 September
30,
% Change
2020
2019
Revenue - Global
$
443
$
280
58
%
Revenue - United States
$
374
$
251
49
%
Revenue - International
$
69
$
28
145
%
MAUs - Global
442
322
37
%
MAUs - United States
98
87
13
%
MAUs - International
343
235
46
%
ARPU - Global
$
1.03
$
0.90
15
%
ARPU - United States
$
3.85
$
2.93
31
%
ARPU - International
$
0.21
$
0.13
66
%
Outlook
Our current expectation is that Q4 revenue will grow around 60%
year over year, a modest acceleration compared to our growth rate
in Q320. We continue to navigate uncertainty given the ongoing
COVID-19 pandemic and other factors.
We’re also operating in a more remote working environment while
maintaining investments in the long-term strategic priorities of
the company. We continue to evaluate our spending as the situation
evolves.
We intend to provide further detail on our outlook during the
conference call.
Webcast and conference call information
A live audio webcast of our third quarter 2020 earnings release
call will be available at investor.pinterestinc.com. The call
begins today at 1:30 PM (PT) / 4:30 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: uncertainty regarding the duration and scope of the
coronavirus referred to as COVID-19 pandemic; actions governments
and businesses take in response to the pandemic, including actions
that could affect levels of advertising activity; the impact of the
pandemic and actions taken in response to the pandemic on global
and regional economies and economic activity; the pace of recovery
when the COVID-19 pandemic subsides; general economic uncertainty
in key global markets and a worsening of global economic conditions
or low levels of economic growth; the scope and impact of the
recent outbreak of COVID-19 on our planned investments, operations,
expenses, revenue, cash flow, liquidity and users; 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 Quarterly Report
on Form 10-Q for the quarter ended September 30, 2020, 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 earnings materials is as of October 28, 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 loss adjusted to exclude
depreciation and amortization expense, share-based compensation
expense, interest income, interest expense and other income
(expense), net, provision for (benefit from) income taxes and, for
the third quarter of 2020, a one-time payment for the termination
of a future lease contract. 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, share-based compensation expense and, for the third quarter
of 2020, a one-time payment for the termination of a future lease
contract. Non-GAAP income (loss) 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 (loss) 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 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 and non-GAAP net income 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.
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
technology or our methodology.
PINTEREST, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except par
value)
(unaudited)
September 30,
December 31,
2020
2019
ASSETS
Current assets:
Cash and cash equivalents
$
652,723
$
649,666
Marketable securities
996,392
1,063,679
Accounts receivable, net of allowances of
$5,670 and $2,851 as of September 30, 2020 and December 31, 2019,
respectively
339,274
316,367
Prepaid expenses and other current
assets
44,537
37,522
Total current assets
2,032,926
2,067,234
Property and equipment, net
76,294
91,992
Operating lease right-of-use assets
164,803
188,251
Goodwill and intangible assets, net
13,814
14,576
Restricted cash
9,221
25,339
Other assets
3,980
5,925
Total assets
$
2,301,038
$
2,393,317
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
41,703
$
34,334
Accrued expenses and other current
liabilities
147,946
141,823
Total current liabilities
189,649
176,157
Operating lease liabilities
150,162
173,392
Other liabilities
26,623
20,063
Total liabilities
366,434
369,612
Commitments and contingencies
Stockholders’ equity:
Class A common stock, $0.00001 par value,
6,666,667 shares authorized, 507,248 and 360,850 shares issued and
outstanding as of September 30, 2020 and December 31, 2019,
respectively; Class B common stock, $0.00001 par value, 1,333,333
shares authorized, 107,995 and 209,054 shares issued and
outstanding as of September 30, 2020 and December 31, 2019,
respectively
6
6
Additional paid-in capital
4,475,425
4,229,778
Accumulated other comprehensive income
2,063
647
Accumulated deficit
(2,542,890
)
(2,206,726
)
Total stockholders’ equity
1,934,604
2,023,705
Total liabilities and stockholders’
equity
$
2,301,038
$
2,393,317
PINTEREST, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended September
30,
2020
2019
Revenue
$
442,616
$
279,703
Costs and expenses:
Cost of revenue
112,844
83,520
Research and development
160,187
167,703
Sales and marketing
118,531
110,740
General and administrative
148,087
51,450
Total costs and expenses
539,649
413,413
Loss from operations
(97,033
)
(133,710
)
Interest income
2,896
9,837
Interest expense and other income
(expense), net
(51
)
(1,056
)
Loss before provision for (benefit from)
income taxes
(94,188
)
(124,929
)
Provision for (benefit from) income
taxes
32
(197
)
Net loss
$
(94,220
)
$
(124,732
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.16
)
$
(0.23
)
Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
603,490
546,126
PINTEREST, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended September
30,
2020
2019
Operating activities Net loss $
(336,164
)
$
(1,325,653
)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation and amortization
29,174
19,496
Share-based compensation
234,801
1,265,581
Other
7,268
(3,296
)
Changes in assets and liabilities: Accounts receivable
(25,667
)
12,331
Prepaid expenses and other assets
(6,184
)
(1,502
)
Operating lease right-of-use assets
31,835
21,746
Accounts payable
7,689
8,897
Accrued expenses and other liabilities
20,391
13,133
Operating lease liabilities
(35,013
)
(19,634
)
Net cash used in operating activities
(71,870
)
(8,901
)
Investing activities Purchases of property and equipment and
intangible assets
(14,032
)
(20,433
)
Purchases of marketable securities
(808,180
)
(527,899
)
Sales of marketable securities
174,042
93,389
Maturities of marketable securities
699,133
252,164
Other investing activities
316
—
Net cash provided by (used in) investing activities
51,279
(202,779
)
Financing activities Proceeds from initial public offering,
net of underwriters' discounts and commissions
—
1,573,200
Proceeds from exercise of stock options, net
64,992
744
Shares repurchased for tax withholdings on release of restricted
stock units
(56,894
)
(424,965
)
Payment of deferred offering costs and other financing activities
(1,750
)
(11,305
)
Net cash provided by financing activities
6,348
1,137,674
Effect of exchange rate changes on cash, cash equivalents, and
restricted cash
(86
)
(182
)
Net increase (decrease) in cash, cash equivalents, and restricted
cash
(14,329
)
925,812
Cash, cash equivalents, and restricted cash, beginning of period
677,743
135,290
Cash, cash equivalents, and restricted cash, end of period $
663,414
$
1,061,102
Supplemental cash flow information Accrued property
and equipment $
3,952
$
7,174
Operating lease right-of-use assets obtained in exchange for
operating lease liabilities $
14,030
$
41,399
Reconciliation of cash, cash equivalents and restricted
cash to condensed consolidated balance sheets Cash and cash
equivalents $
652,723
$
1,033,871
Restricted cash included in prepaid expenses and other current
assets
1,470
2,409
Restricted cash
9,221
24,822
Total cash, cash equivalents, and restricted cash $
663,414
$
1,061,102
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL RESULTS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended September
30,
2020
2019
Share-based compensation by
function:
Cost of revenue
$
2,298
$
1,568
Research and development
61,357
83,539
Sales and marketing
11,958
21,243
General and administrative
16,019
23,938
Total share-based compensation
$
91,632
$
130,288
Amortization of acquired intangible
assets by function:
Cost of revenue
$
94
$
94
General and administrative
158
310
Total amortization of acquired intangible
assets
$
252
$
404
Reconciliation of total costs and
expenses to non-GAAP costs and expenses:
Total costs and expenses
$
539,649
$
413,413
Share-based compensation
(91,632
)
(130,288
)
Amortization of acquired intangible
assets
(252
)
(404
)
Termination of future lease contract
(89,500
)
—
Total Non-GAAP costs and expenses
$
358,265
$
282,721
Reconciliation of net loss to non-GAAP
net income:
Net loss
$
(94,220
)
$
(124,732
)
Share-based compensation
91,632
130,288
Amortization of acquired intangible
assets
252
404
Termination of future lease contract
89,500
—
Non-GAAP net income
$
87,164
$
5,960
Weighted-average shares outstanding for
net loss per share, basic and diluted
603,491
546,126
Weighted-average dilutive
securities(1)
72,803
104,594
Diluted weighted-average shares
outstanding for Non-GAAP net income per share
676,294
650,720
Net loss per share
$
(0.16
)
$
(0.23
)
Non-GAAP net income per share
$
0.13
$
0.01
___________
(1)
Gives effect to potential common stock
instruments such as stock options, unvested restricted stock units
and unvested restricted stock awards.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL RESULTS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended September
30,
2020
2019
Reconciliation of net loss to Adjusted
EBITDA:
Net Loss
$
(94,220
)
$
(124,732
)
Depreciation and amortization
8,943
7,293
Share-based compensation
91,632
130,288
Interest income
(2,896
)
(9,837
)
Interest expense and other (income)
expense, net
51
1,056
Provision for (benefit from) income
taxes
32
(197
)
Termination of future lease contract
89,500
—
Adjusted EBITDA
$
93,042
$
3,871
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version on businesswire.com: https://www.businesswire.com/news/home/20201028006053/en/
Investor relations: Doug Clark ir@pinterest.com
Media: Mike Mayzel press@pinterest.com
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