Pinterest, Inc. (NYSE: PINS) today announced financial results
for the quarter ended June 30, 2020.
- Q2 revenue grew 4% year over year to $272 million.
- Global Monthly Active Users (MAUs) grew 39% year over year to
416 million.
- GAAP net loss was $(101) million for Q2. Adjusted EBITDA was
$(34) million.
“This quarter we reached a milestone—more than 400 million
people now come to Pinterest every month to get and stay inspired,”
said Ben Silbermann, CEO and co-founder, Pinterest. “In these tough
times, we’re seeing more and more people rely on Pinterest to cook
at home, plan kids activities and set up a home office. Businesses
are helping them turn their ideas into reality as people are
increasingly discovering and buying products on Pinterest.”
“By all accounts, this was a challenging quarter as COVID-19
continued to spread. I’m pleased with the way we responded and
remained engaged with our advertising partners,” said Todd
Morgenfeld, CFO and Head of Business Operations, Pinterest. “It has
been encouraging to see the recovery in our business over the past
few months, but there is still a tremendous amount of uncertainty
and work to be done.”
Q2 2020 Financial Highlights
The following table summarizes our consolidated financial
results (in thousands, except percentages, unaudited):
Three Months Ended June
30,
% Change
2020
2019
Revenue
$
272,485
$
261,249
4
%
Net loss
$
(100,748
)
$
(1,159,501
)
91
%
Non-GAAP net loss*
$
(38,351
)
$
(24,537
)
(56
)%
Adjusted EBITDA*
$
(33,900
)
$
(26,037
)
(30
)%
Adjusted EBITDA margin*
(12
)%
(10
)%
∗
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 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 June
30,
% Change
2020
2019
Revenue - Global
$
272
$
261
4
%
Revenue - United States
$
232
$
238
(2
)%
Revenue - International
$
41
$
24
72
%
MAUs - Global
416
300
39
%
MAUs - United States
96
85
13
%
MAUs - International
321
215
49
%
ARPU - Global
$
0.70
$
0.88
(21
)%
ARPU - United States
$
2.50
$
2.80
(11
)%
ARPU - International
$
0.14
$
0.11
21
%
Outlook
Given the continued uncertainties related to the ongoing
COVID-19 pandemic and the rapidly shifting macroeconomic
conditions, we are not providing guidance expectations for revenue
or Adjusted EBITDA for full year 2020.
We estimate, on a preliminary basis, year-over-year revenue
growth for the month of July to be about 50% through July 29th. We
are encouraged by the performance of our business in July, but a
tremendous amount of uncertainty remains given the ongoing COVID-19
pandemic and other factors. Our current expectation is that Q3
revenue will grow in the mid-30% range year over year. We also
continue to evaluate our levels of spending as the environment
evolves. We want to remain prudent in the near-term while ensuring
we invest in and prioritize the long-term growth of the
company.
We intend to provide further detail on recent trends and on our
outlook during the conference call.
We remain committed to our priorities of content, ads
diversification, use case expansion and shopping. Today more than
ever, Pinterest is a place to inspire people with helpful and
actionable information while helping business partners succeed with
the tools and insights they need most.
Webcast and conference call information
A live audio webcast of our second quarter 2020 earnings release
call will be available at investor.pinterestinc.com. The call
begins today at 5:30 AM (PT) / 8:30 AM (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 June 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 July 31, 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.
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)
June 30,
December 31,
2020
2019
ASSETS
Current assets:
Cash and cash equivalents
$
863,620
$
649,666
Marketable securities
839,470
1,063,679
Accounts receivable, net of allowances of
$5,612 and $2,851 as of June 30, 2020 and December 31, 2019,
respectively
209,933
316,367
Prepaid expenses and other current
assets
45,170
37,522
Total current assets
1,958,193
2,067,234
Property and equipment, net
83,006
91,992
Operating lease right-of-use assets
165,250
188,251
Goodwill and intangible assets, net
14,067
14,576
Restricted cash
23,221
25,339
Other assets
5,887
5,925
Total assets
$
2,249,624
$
2,393,317
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
43,705
$
34,334
Accrued expenses and other current
liabilities
122,912
141,823
Total current liabilities
166,617
176,157
Operating lease liabilities
151,282
173,392
Other liabilities
25,095
20,063
Total liabilities
342,994
369,612
Commitments and contingencies
Stockholders’ equity:
Class A common stock, $0.00001 par value,
6,666,667 shares authorized, 451,944 and 360,850 shares issued and
outstanding as of June 30, 2020 and December 31, 2019,
respectively; Class B common stock, $0.00001 par value, 1,333,333
shares authorized, 144,320 and 209,054 shares issued and
outstanding as of June 30, 2020 and December 31, 2019,
respectively
6
6
Additional paid-in capital
4,351,557
4,229,778
Accumulated other comprehensive income
3,737
647
Accumulated deficit
(2,448,670
)
(2,206,726
)
Total stockholders’ equity
1,906,630
2,023,705
Total liabilities and stockholders’
equity
$
2,249,624
$
2,393,317
PINTEREST, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended June
30,
2020
2019
Revenue
$
272,485
$
261,249
Costs and expenses:
Cost of revenue
108,259
105,415
Research and development
136,593
801,879
Sales and marketing
86,483
296,919
General and administrative
45,680
224,179
Total costs and expenses
377,015
1,428,392
Loss from operations
(104,530
)
(1,167,143
)
Interest income
4,218
8,127
Interest expense and other income
(expense), net
(16
)
(448
)
Loss before provision for income taxes
(100,328
)
(1,159,464
)
Provision for income taxes
420
37
Net loss
$
(100,748
)
$
(1,159,501
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.17
)
$
(2.62
)
Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
586,737
443,340
PINTEREST, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended June
30,
2020
2019
Operating activities
Net loss
$
(241,944
)
$
(1,200,921
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
20,231
12,203
Share-based compensation
143,169
1,135,293
Other
3,811
(2,713
)
Changes in assets and liabilities:
Accounts receivable
103,544
19,615
Prepaid expenses and other assets
(7,180
)
(6,174
)
Operating lease right-of-use assets
21,456
14,040
Accounts payable
9,780
7,189
Accrued expenses and other liabilities
(7,743
)
15,310
Operating lease liabilities
(24,357
)
(10,217
)
Net cash provided by (used in) operating
activities
20,767
(16,375
)
Investing activities
Purchases of property and equipment and
intangible assets
(11,325
)
(11,914
)
Purchases of marketable securities
(308,612
)
(159,315
)
Sales of marketable securities
113,184
60,239
Maturities of marketable securities
422,266
166,288
Other investing activities
316
—
Net cash provided by investing
activities
215,829
55,298
Financing activities
Proceeds from initial public offering, net
of underwriters' discounts and commissions
—
1,573,200
Proceeds from exercise of stock options,
net
32,749
702
Shares repurchased for tax withholdings on
release of restricted stock units
(56,887
)
(302,675
)
Payment of deferred offering costs and
other financing activities
—
(10,103
)
Net cash provided by (used in) financing
activities
(24,138
)
1,261,124
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(150
)
(17
)
Net increase in cash, cash equivalents,
and restricted cash
212,308
1,300,030
Cash, cash equivalents, and restricted
cash, beginning of period
677,743
135,290
Cash, cash equivalents, and restricted
cash, end of period
$
890,051
$
1,435,320
Supplemental cash flow
information
Accrued property and equipment
$
4,453
$
4,618
Operating lease right-of-use assets
obtained in exchange for operating lease liabilities
$
4,121
$
23,381
Reconciliation of cash, cash
equivalents and restricted cash to condensed consolidated balance
sheets
Cash and cash equivalents
$
863,620
$
1,408,739
Restricted cash included in prepaid
expenses and other current assets
3,210
3,266
Restricted cash
23,221
23,315
Total cash, cash equivalents, and
restricted cash
$
890,051
$
1,435,320
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL RESULTS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended June
30,
2020
2019
Share-based compensation by
function:
Cost of revenue
$
2,325
$
28,157
Research and development
46,358
709,996
Sales and marketing*
(2,074
)
202,128
General and administrative
15,536
194,318
Total share-based compensation
$
62,145
$
1,134,599
Amortization of acquired intangible
assets by function:
Cost of revenue
$
94
$
141
General and administrative
158
223
Total amortization of acquired intangible
assets
$
252
$
364
Reconciliation of total costs and
expenses to non-GAAP costs and expenses:
Total costs and expenses
$
377,015
$
1,428,392
Share-based compensation
(62,145
)
(1,134,599
)
Amortization of acquired intangible
assets
(252
)
(364
)
Total Non-GAAP costs and expenses
$
314,618
$
293,429
Reconciliation of net loss to non-GAAP
net loss:
Net loss
$
(100,748
)
$
(1,159,501
)
Share-based compensation
62,145
1,134,599
Amortization of acquired intangible
assets
252
364
Non-GAAP net loss
$
(38,351
)
$
(24,538
)
Weighted-average shares outstanding for
net loss per share, basic and diluted
586,737
443,340
Net loss per share
$
(0.17
)
$
(2.62
)
Non-GAAP loss per share
$
(0.07
)
$
(0.06
)
____________
∗
Share-based compensation expense was
negative for the three months ended June 30, 2020 due to the
reversal of previously recognized share-based compensation expense
related to unvested RSUs forfeited by our former Chief Operating
Officer.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL RESULTS
(in thousands, except per
share amounts)
(unaudited)
Three Months Ended June
30,
2020
2019
Reconciliation of net loss to Adjusted
EBITDA:
Net Loss
$
(100,748
)
$
(1,159,501
)
Depreciation and amortization
8,485
6,507
Share-based compensation
62,145
1,134,599
Interest income
(4,218
)
(8,127
)
Interest expense and other (income)
expense, net
16
448
Provision for income taxes
420
37
Adjusted EBITDA
$
(33,900
)
$
(26,037
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200731005115/en/
Investor relations: Doug Clark ir@pinterest.com
Media: Mike Mayzel press@pinterest.com
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