Pinterest, Inc. (NYSE: PINS) today announced financial results
for the quarter ended March 31, 2019.
"The IPO was a significant milestone, but our focus at Pinterest
hasn’t changed. We want to help people discover inspiring ideas for
every aspect of their lives, from fashion and home decor to travel
and fitness," said Ben Silbermann, Co-Founder, President and CEO of
Pinterest. "Our success can be seen in our Q1 results, and we’re
excited to continue to grow our reach and impact in the years to
come."
"Pinterest executed well in Q1. Revenue grew 54% year-over-year
to $202 million, surpassing $200 million for the second consecutive
quarter," said Todd Morgenfeld, CFO. "We were particularly
encouraged by the strength we saw in U.S. revenue and international
user growth. Our strong revenue performance allowed us to expand
net margin by 20 percentage points year-over-year, reflecting our
continued prioritization and disciplined execution across our
strategic priorities."
Q1 2019 financial highlights
The following table summarizes our consolidated financial
results (in thousands, except percentages, unaudited):
Three Months Ended March 31, % Change
2019 2018 Revenue $ 201,911 $ 131,359 54 %
Net loss $ (41,420 ) $ (52,709 ) 21 % Non-GAAP net
loss* $ (40,383 ) $ (47,787 ) 15 % Adjusted EBITDA* $
(38,436 ) $ (45,361 ) 15 % Adjusted EBITDA margin* (19 )% (35 )%
_______________
* 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 2019 other highlights
The following table sets forth our revenue, monthly active users
("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 March 31, % Change
2019 2018 Revenue - Global $ 202 $ 131 54 %
Revenue - United States $ 187 $ 124 51 % Revenue - International $
15 $ 7 107 % MAUs - Global 291 239 22 % MAUs - United States
85 80 6 % MAUs - International 206 160 29 % ARPU - Global $
0.73 $ 0.58 26 % ARPU - United States $ 2.25 $ 1.59 41 % ARPU -
International $ 0.08 $ 0.05 59 %
Full year 2019 outlook
- Total revenue is expected to be between
$1,055 million and $1,080 million.
- Adjusted EBITDA is expected to be
between $(70) million and $(45) million.*
* 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 first
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; competition; our ability to scale our
business and revenue model; our reliance on advertising revenue and
our ability to attract and retain advertisers; 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
filings with the Securities and Exchange
Commission (SEC), including our prospectus filed pursuant to
Rule 424(b) under the Securities Act of 1933, as amended,
on April 18, 2019, which are 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 May 16, 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)
March 31, December 31, 2019 2018
ASSETS Current assets: Cash and cash equivalents $ 134,648 $
122,509 Marketable securities 507,568 505,304 Accounts receivable
net of allowances of $2,600 and $3,097 as of March 31, 2019 and
December 31, 2018, respectively 161,108 221,932 Prepaid expenses
and other current assets 43,623 39,607 Total current
assets 846,947 889,352 Property and equipment, net 83,031 81,512
Operating lease right-of-use assets 160,802 145,203 Goodwill and
intangible assets, net 13,728 14,071 Restricted cash 25,724 11,724
Other assets 11,008 10,869 Total assets $ 1,141,240
$ 1,152,731
LIABILITIES, REDEEMABLE CONVERTIBLE
PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) Current
liabilities: Accounts payable $ 30,320 $ 22,169 Accrued expenses
and other current liabilities 93,206 86,258 Total
current liabilities 123,526 108,427 Operating lease liabilities
162,359 151,395 Other liabilities 23,945 22,073 Total
liabilities 309,830 281,895 Commitments and
contingencies Redeemable convertible preferred stock,
$0.00001 par value, 928,676 shares authorized; 308,373 shares
issued and outstanding as of March 31, 2019 and December 31, 2018,
respectively 1,465,399 1,465,399 Stockholders’ equity
(deficit): Common stock, $0.00001 par value, 1,932,500 shares
authorized; 127,371 and 127,298 shares issued and outstanding as of
March 31, 2019 and December 31, 2018, respectively 1 1 Additional
paid-in capital 253,016 252,212 Accumulated other comprehensive
loss (231 ) (1,421 ) Accumulated deficit (886,775 ) (845,355 )
Total stockholders’ equity (deficit) (633,989 ) (594,563 ) Total
liabilities, redeemable convertible preferred stock, and
stockholders’ equity (deficit) $ 1,141,240 $ 1,152,731
PINTEREST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended March 31, 2019
2018 Revenue $ 201,911 $ 131,359 Costs and expenses: Cost of
revenue 73,694 51,653 Research and development 72,444 60,047 Sales
and marketing 76,394 55,774 General and administrative 24,205
18,867 Total costs and expenses 246,737
186,341 Loss from operations (44,826 ) (54,982 ) Other
income (expense), net: Interest income 4,059 2,638 Interest expense
and other income (expense), net (500 ) (242 ) Loss before provision
for income taxes (41,267 ) (52,586 ) Provision for income taxes 153
123 Net loss $ (41,420 ) $ (52,709 ) Net loss per
share attributable to common stockholders, basic and diluted $
(0.33 ) $ (0.42 ) Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted 127,346 126,857
PINTEREST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended March 31, 2019
2018 Operating activities Net loss $ (41,420 ) $
(52,709 ) Adjustments to reconcile net loss to net cash provided by
operating activities: Depreciation and amortization 5,696 4,787
Share-based compensation 694 4,834 Other (993 ) 654 Changes in
assets and liabilities: Accounts receivable 61,329 39,309 Prepaid
expenses and other assets 510 7,102 Operating lease right-of-use
assets 6,427 4,551 Accounts payable 7,481 4,484 Accrued expenses
and other liabilities (2,024 ) 2,696 Operating lease liabilities
(4,578 ) (2,174 ) Net cash provided by operating activities 33,122
13,534
Investing activities Purchases of
property and equipment (3,706 ) (8,240 ) Purchases of marketable
securities (113,952 ) (83,569 ) Sales of marketable securities
28,953 36,408 Maturities of marketable securities 84,883
142,428 Net cash provided by (used in) investing activities
(3,822 ) 87,027
Financing activities Proceeds from
exercise of stock options, net 110 435 Other financing activities
(3,279 ) — Net cash provided by (used in) financing
activities (3,169 ) 435 Effect of exchange rate changes on
cash, cash equivalents, and restricted cash 8 48 Net increase in
cash, cash equivalents, and restricted cash 26,139 101,044 Cash,
cash equivalents, and restricted cash, beginning of period 135,290
83,969 Cash, cash equivalents, and restricted
cash, end of period $ 161,429 $ 185,013
Supplemental cash flow information Accrued property and
equipment $ 4,484 $ 7,779 Operating lease right-of-use assets
obtained in exchange for operating lease liabilities $ 22,862 $
2,356
Reconciliation of cash, cash equivalents and
restricted cash to condensed consolidated balance sheets Cash
and cash equivalents $ 134,648 $ 172,512 Restricted cash included
in prepaid expenses and other current assets 1,057 851 Restricted
cash 25,724 11,650 Total cash, cash equivalents, and
restricted cash $ 161,429 $ 185,013
Reconciliation of GAAP to non-GAAP
financial results
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended March 31, 2019
2018 Share-based compensation by function: Cost of
revenue $ 15 $ 32 Research and development 626 4,054 Sales and
marketing 29 241 General and administrative 24 507
Total share-based compensation $ 694 $ 4,834
Amortization of acquired intangible assets by function: Cost
of revenue $ — $ 14 General and administrative 343 74
Total amortization of acquired intangible assets $ 343 $ 88
Reconciliation of total costs and expenses to
non-GAAP costs and expenses: Total costs and expenses $ 246,737
$ 186,341 Share-based compensation (694 ) (4,834 ) Amortization of
acquired intangible assets (343 ) (88 ) Non-GAAP costs and expenses
$ 245,700 $ 181,419
Reconciliation of net
loss to non-GAAP net loss: Net loss $ (41,420 ) $ (52,709 )
Share-based compensation 694 4,834 Amortization of acquired
intangible assets 343 88 Non-GAAP net loss $ (40,383
) $ (47,787 ) Weighted-average shares outstanding 127,346
126,857 Net loss per share $ (0.33 ) $ (0.42 ) Non-GAAP net
loss per share $ (0.32 ) $ (0.38 )
The following table presents a reconciliation of net loss, the
most directly comparable financial measure calculated and presented
in accordance with GAAP, to Adjusted EBITDA, for each of the
periods indicated:
Three Months Ended March 31, 2019
2018 Reconciliation of net loss to Adjusted EBITDA
Net loss $ (41,420 ) $ (52,709 ) Depreciation and amortization
5,696 4,787 Share-based compensation 694 4,834 Interest income
(4,059 ) (2,638 ) Interest expense and other (income) expense, net
500 242 Provision for income taxes 153 123 Adjusted
EBITDA $ (38,436 ) $ (45,361 )
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Investor relations:Jane Pennerir@pinterest.com
Media:Mike Mayzelpress@pinterest.com
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