Pinterest, Inc. (NYSE: PINS) today announced financial results
for the quarter ended September 30, 2019.
- Q3 revenue grew 47% year-over-year to $280 million.
- Global Monthly Active Users (MAUs) grew 28% year over year to
322 million.
- GAAP net loss was $125 million. Adjusted EBITDA was $4
million.
"In Q3, we redesigned Pinterest to make the service more
intuitive and improved recommendations quality to help people
discover new ideas they didn’t know about before," said Ben
Silbermann, Pinterest CEO and Co-founder. "We are also expanding
the number of shoppable products on Pinterest, which makes it easy
for our users to go from inspiration to action."
"In the third quarter, revenue grew 47% year over year and MAUs
grew 28% to 322 million. We saw double-digit user growth in nearly
all international countries," said Todd Morgenfeld, Pinterest CFO.
"We are thrilled to serve Pinterest ads in 28 markets currently,
compared to seven at the end of 2018. Pinterest also realized
adjusted EBITDA profitability in Q3."
Q3 2019 Financial Highlights
The following table summarizes our consolidated financial
results (in thousands, except percentages, unaudited):
Three Months Ended September
30,
% Change
2019
2018
Revenue
$
279,703
$
190,197
47
%
Net loss
$
(124,732
)
$
(18,874
)
(561
)%
Non-GAAP net income (loss)*
$
5,960
$
(14,912
)
140
%
Adjusted EBITDA*
$
3,871
$
(13,426
)
129
%
Adjusted EBITDA margin*
1
%
(7
)%
* 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 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 September
30,
% Change
2019
2018
Revenue - Global
$
280
$
190
47
%
Revenue - United States
$
251
$
181
39
%
Revenue - International
$
28
$
9
212
%
MAUs - Global
322
251
28
%
MAUs - United States
87
80
8
%
MAUs - International
235
171
38
%
ARPU - Global
$
0.90
$
0.79
14
%
ARPU - United States
$
2.93
$
2.33
26
%
ARPU - International
$
0.13
$
0.06
127
%
Full year 2019 outlook
- Total revenue is expected to be between $1,100 million and
$1,115 million, compared to our prior forecast of $1,095 million
and $1,115 million.
- Adjusted EBITDA is expected to be between $(30) million and
$(10) million, compared to our prior forecast of $(50) million and
$(25) 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 third 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 September 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 October 31, 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 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 and provision for (benefit from) 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 loss from operations is calculated
by subtracting non-GAAP costs and expenses from revenue. Non-GAAP
net income (loss) per share is calculated by dividing non-GAAP net
income (loss) by diluted weighted-average shares outstanding. We
use Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP costs and
expenses, non-GAAP 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 Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP costs
and expenses, non-GAAP loss from operations, non-GAAP net income
(loss) and non-GAAP net income (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 income (loss)
and non-GAAP net income (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 income (loss) and non-GAAP net income
(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 income (loss) and non-GAAP net income (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 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. In this press release, we updated the
definition of MAUs to better align with how we have historically
and currently calculated MAUs and how our users interact with our
platform. This change in definition does not affect the number of
MAUs presented in past disclosures or in this press release. 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)
September 30,
December 31,
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$
1,033,871
$
122,509
Marketable securities
691,894
505,304
Accounts receivable, net of allowances of
$2,408 and $3,097 as of September 30, 2019 and December 31, 2018,
respectively
210,339
221,932
Prepaid expenses and other current
assets
46,424
39,607
Total current assets
1,982,528
889,352
Property and equipment, net
89,758
81,512
Operating lease right-of-use assets
164,922
145,203
Goodwill and intangible assets, net
14,959
14,071
Restricted cash
24,822
11,724
Other assets
3,483
10,869
Total assets
$
2,280,472
$
1,152,731
LIABILITIES, REDEEMABLE CONVERTIBLE
PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable
$
31,509
$
22,169
Accrued expenses and other current
liabilities
112,685
86,258
Total current liabilities
144,194
108,427
Operating lease liabilities
161,164
151,395
Other liabilities
18,713
22,073
Total liabilities
324,071
281,895
Commitments and contingencies
Redeemable convertible preferred stock,
$0.00001 par value; no shares authorized, issued or outstanding as
of September 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 September 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, 214,082 shares issued and outstanding
as of September 30, 2019; Class B common stock, $0.00001 par value,
1,333,333 shares authorized, 333,483 shares issued and outstanding
as of September 30, 2019; no shares authorized, issued or
outstanding as of December 31, 2018 for either class
5
—
Additional paid-in capital
4,127,028
252,212
Accumulated other comprehensive income
(loss)
376
(1,421
)
Accumulated deficit
(2,171,008
)
(845,355
)
Total stockholders’ equity (deficit)
1,956,401
(594,563
)
Total liabilities, redeemable convertible
preferred stock, and stockholders’ equity (deficit)
$
2,280,472
$
1,152,731
PINTEREST, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended September
30,
2019
2018
Revenue
$
279,703
$
190,197
Costs and expenses:
Cost of revenue
83,520
63,649
Research and development
167,703
63,541
Sales and marketing
110,740
66,722
General and administrative
51,450
18,716
Total costs and expenses
413,413
212,628
Loss from operations
(133,710
)
(22,431
)
Other income (expense), net:
Interest income
9,837
3,547
Interest expense and other income
(expense), net
(1,056
)
82
Loss before provision for income taxes
(124,929
)
(18,802
)
Provision for (benefit from) income
taxes
(197
)
72
Net loss
$
(124,732
)
$
(18,874
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.23
)
$
(0.15
)
Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
546,126
127,218
PINTEREST, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended September
30,
2019
2018
Operating activities
Net loss
$
(1,325,653
)
$
(109,990
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
19,496
15,415
Share-based compensation
1,265,581
12,681
Other
(3,296
)
796
Changes in assets and liabilities:
Accounts receivable
12,331
(1,978
)
Prepaid expenses and other assets
(1,502
)
15,443
Operating lease right-of-use assets
21,746
13,549
Accounts payable
8,897
5,725
Accrued expenses and other liabilities
13,133
19,369
Operating lease liabilities
(19,634
)
(12,556
)
Net cash used in operating activities
(8,901
)
(41,546
)
Investing activities
Purchases of property and equipment and
intangible assets
(20,433
)
(17,636
)
Purchases of marketable securities
(527,899
)
(427,305
)
Sales of marketable securities
93,389
91,738
Maturities of marketable securities
252,164
422,317
Net cash provided by (used in) investing
activities
(202,779
)
69,114
Financing activities
Proceeds from initial public offering, net
of underwriters' discounts and commissions
1,573,200
—
Proceeds from exercise of stock options,
net
744
548
Shares repurchased for tax withholdings on
release of restricted stock units
(424,965
)
—
Payment of deferred offering costs and
other financing activities
(11,305
)
—
Net cash provided by financing
activities
1,137,674
548
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(182
)
(43
)
Net increase in cash, cash equivalents,
and restricted cash
925,812
28,073
Cash, cash equivalents, and restricted
cash, beginning of period
135,290
83,969
Cash, cash equivalents, and restricted
cash, end of period
$
1,061,102
$
112,042
Supplemental cash flow
information
Accrued property and equipment
$
7,174
$
1,048
Operating lease right-of-use assets
obtained in exchange for operating lease liabilities
$
41,399
$
5,817
Reconciliation of cash, cash
equivalents and restricted cash to condensed consolidated balance
sheets
Cash and cash equivalents
$
1,033,871
$
100,063
Restricted cash included in prepaid
expenses and other current assets
2,409
1,057
Restricted cash
24,822
10,922
Total cash, cash equivalents, and
restricted cash
$
1,061,102
$
112,042
Reconciliation of GAAP to
non-GAAP financial results
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended September
30,
2019
2018
Share-based compensation by
function:
Cost of revenue
$
1,568
$
16
Research and development
83,539
3,380
Sales and marketing
21,243
188
General and administrative
23,938
304
Total share-based compensation
$
130,288
$
3,888
Amortization of acquired intangible
assets by function:
Cost of revenue
$
94
$
—
General and administrative
310
74
Total amortization of acquired intangible
assets
$
404
$
74
Reconciliation of total costs and
expenses to non-GAAP costs and expenses:
Total costs and expenses
$
413,413
$
212,628
Share-based compensation
(130,288
)
(3,888
)
Amortization of acquired intangible
assets
(404
)
(74
)
Non-GAAP costs and expenses
$
282,721
$
208,666
Reconciliation of net loss to non-GAAP
net income (loss):
Net loss
$
(124,732
)
$
(18,874
)
Share-based compensation
130,288
3,888
Amortization of acquired intangible
assets
404
74
Non-GAAP net income (loss)
$
5,960
$
(14,912
)
Weighted-average shares outstanding for
net loss per share, basic and diluted
546,126
127,218
Weighted-average dilutive
securities(1)
104,594
—
Diluted weighted-average shares
outstanding for Non-GAAP net income (loss) per share
650,720
127,218
Net loss per share
$
(0.23
)
$
(0.15
)
Non-GAAP net income (loss) per share
$
0.01
$
(0.12
)
____________
(1) Gives effect to potential common stock
instruments such as stock options and unvested restricted stock
units
Reconciliation of net loss to Adjusted
EBITDA
Net loss
$
(124,732
)
$
(18,874
)
Depreciation and amortization
7,293
5,117
Share-based compensation
130,288
3,888
Interest income
(9,837
)
(3,547
)
Interest expense and other (income)
expense, net
1,056
(82
)
Provision for (benefit from) income
taxes
(197
)
72
Adjusted EBITDA
$
3,871
$
(13,426
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191031005872/en/
Investor relations: Jane Penner ir@pinterest.com Media: Mike Mayzel
press@pinterest.com
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