Pinterest Announces First Quarter 2022 Results

Rhea-AI Summary

Pinterest, Inc. (NYSE: PINS) reported a Q1 2022 revenue growth of 18% year-over-year, totaling $575 million. However, the company faced a 9% decline in Global Monthly Active Users (MAUs), now at 433 million. Despite a GAAP net loss of $5 million, adjusted EBITDA was $77 million. The firm plans to boost investments in its native content and shopping initiatives. Looking ahead, Pinterest anticipates approximately 11% revenue growth in Q2 but expects non-GAAP operating expenses to rise 10% quarter-over-quarter.

Positive

• Q1 2022 revenue grew 18% year-over-year to $575 million.
• 76% reduction in GAAP net loss from $21.7 million in 2021 to $5 million in 2022.
• Adjusted EBITDA of $77 million indicates operational resilience.

Negative

• Global Monthly Active Users (MAUs) decreased 9% year-over-year to 433 million.
• Non-GAAP net income decreased by 12% year-over-year.
• Adjusted EBITDA margin dropped from 17% in 2021 to 13% in 2022.

SAN FRANCISCO--(BUSINESS WIRE)-- Pinterest, Inc. (NYSE: PINS) today announced financial results for the quarter ended March 31, 2022.

• Q1 revenue grew 18% year over year to $575 million.

• Global Monthly Active Users (MAUs) decreased 9% year over year to 433 million.

• GAAP net loss was $5 million for Q1. Adjusted EBITDA was $77 million for Q1.

“Pinterest made good progress in Q1 executing on our long-term strategy. We continued to scale our native content and creators ecosystem, began beta testing Your Shop, our personalized shopping surface, and released our new open Pinterest API so that any developer can build applications for Pinners, creators, merchants and advertisers,” said Ben Silbermann, CEO and cofounder, Pinterest. “Despite a challenging macroeconomic and geopolitical environment, we grew revenue 18% year-over-year.”

Q1 2022 Financial Highlights

The following table summarizes our consolidated financial results (in thousands, except percentages, unaudited):

			Three Months Ended March 31,								% Change
				2022				2021
Revenue			$	574,885			$	485,230			18	%
Net loss			$	(5,281	)		$	(21,674	)		76	%
Non-GAAP net income*			$	68,990			$	78,527			(12	) %
Adjusted EBITDA*			$	76,795			$	83,824			(8	) %
Adjusted EBITDA margin*				13	%			17	%

*	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 2022 Other Highlights

Beginning this quarter, we will be providing additional disclosure around our revenue, MAUs and average revenue per user ("ARPU") by presenting U.S. and Canada, Europe and Rest of World separately.

The following table sets forth our revenue, MAUs and ARPU based on the geographic location of our users (in millions, except ARPU and percentages, unaudited):

	Three Months Ended March 31,						% Change
		2022			2021
Revenue - Global	$	575		$	485		18	%
Revenue - U.S. and Canada	$	470		$	410		15	%
Revenue - Europe	$	87		$	69		27	%
Revenue - Rest of World	$	17		$	7		152	%
MAUs - Global		433			478		(9	) %
MAUs - U.S. and Canada		94			109		(13	) %
MAUs - Europe		120			136		(12	) %
MAUs - Rest of World		220			234		(6	) %
ARPU - Global	$	1.33		$	1.04		28	%
ARPU - U.S. and Canada	$	4.98		$	3.79		31	%
ARPU - Europe	$	0.72		$	0.51		40	%
ARPU - Rest of World	$	0.08		$	0.03		164	%

Guidance

Our current expectation is that Q2 revenue will grow around 11% year over year. We expect our non-GAAP operating expenses to grow around 10% quarter-over-quarter in Q2. For the full year, we expect non-GAAP operating expenses will grow between 35-40% year-over-year as we continue to ramp up our investments in our native content ecosystem, core Pinner experience, shopping, and headcount across research and development and sales and marketing*.

As of April 25, 2022, our U.S. and Canada MAUs were 94.0 million, and our Global MAUs were 432.9 million**.

We intend to provide further detail on our outlook during the conference call.

Our key strategic priorities for 2022 are anchored in creator-led and inspirational content, shopping, Pinner experience, and advertiser success. We plan to scale our native content ecosystem, and we expect research and development efforts to continue to focus on shopping, Pinner product, ad product and measurement investments. We also intend to grow our headcount further to fund our strategic initiatives. We think these investments will support long-term growth and continue to build the foundations for a scaled business over time.

*

We have not provided the forward-looking GAAP equivalents for certain forward-looking non-GAAP operating expenses or a GAAP reconciliation as a result of the uncertainty regarding, and the potential variability of, reconciling items such as share-based compensation expense. Accordingly, a reconciliation of these non-GAAP guidance metrics to their corresponding GAAP equivalents is not available without unreasonable effort. However, it is important to note that material changes to reconciling items could have a significant effect on future GAAP 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.

**

Results, trends and outlook for the Q2 2022 period to date are preliminary, subject to change, and may not be an indication of future performance.

Webcast and conference call information

A live audio webcast of our first quarter 2022 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: the impact of the COVID-19 pandemic, including its impact on global and regional economies and economic activity; general economic and political uncertainty in global markets and a worsening of global economic conditions or low levels of economic growth, including events such as Russia's recent invasion of Ukraine; the impact of the COVID-19 pandemic on our planned investments, operations, expenses, revenue, cash flow, liquidity, users and engagement; our ability to attract, retain and resurrect users and maintain and grow their engagement levels; our ability to provide useful and relevant content; our ability to attract and retain creators that create relevant and engaging content on our platform; 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 online application stores' and 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 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 fiscal quarter ended March 31, 2022, which is available on our investor relations website at investor.pinterestinc.com and on the SEC website at www.sec.gov. All information provided in this release and in the earnings materials is as of April 27, 2022. 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 from operations, non-GAAP net income and non-GAAP net income 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, provision for (benefit from) income taxes and non-cash charitable contributions. 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 exclude amortization of acquired intangible assets, share-based compensation expense and non-cash charitable contributions. Non-GAAP income 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 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 Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP costs and expenses, non-GAAP income from operations, non-GAAP net income and non-GAAP net income 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 income from operations, non-GAAP net income and non-GAAP net income 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 income from operations, non-GAAP net income and non-GAAP net income 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. Unless otherwise indicated, 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 of 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)
	March 31,				December 31,
		2022				2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,683,792			$	1,419,630
Marketable securities		994,346				1,060,488
Accounts receivable, net of allowances of $8,366 and $8,282 as of March 31, 2022 and December 31, 2021, respectively		473,031				653,355
Prepaid expenses and other current assets		56,183				48,090
Total current assets		3,207,352				3,181,563
Property and equipment, net		54,714				53,401
Operating lease right-of-use assets		222,751				227,912
Goodwill and intangible assets, net		60,084				61,115
Other assets		13,289				13,247
Total assets	$	3,558,190			$	3,537,238
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,546			$	17,675
Accrued expenses and other current liabilities		213,019				242,131
Total current liabilities		225,565				259,806
Operating lease liabilities		202,569				209,181
Other liabilities		30,396				29,508
Total liabilities		458,530				498,495
Commitments and contingencies
Stockholders’ equity:
Class A common stock, $0.00001 par value, 6,666,667 shares authorized, 573,585 and 568,228 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively; Class B common stock, $0.00001 par value, 1,333,333 shares authorized, 88,669 and 88,644 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		7				7
Additional paid-in capital		5,133,804				5,059,528
Accumulated other comprehensive loss		(10,259	)			(2,181	)
Accumulated deficit		(2,023,892	)			(2,018,611	)
Total stockholders’ equity		3,099,660				3,038,743
Total liabilities and stockholders’ equity	$	3,558,190			$	3,537,238

PINTEREST, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)
	Three Months Ended March 31,
		2022				2021
Revenue	$	574,885			$	485,230
Costs and expenses:
Cost of revenue		146,070				133,470
Research and development		195,548				171,728
Sales and marketing		173,953				130,322
General and administrative		62,979				72,618
Total costs and expenses		578,550				508,138
Loss from operations		(3,665	)			(22,908	)
Interest income		1,088				1,492
Interest expense and other income (expense), net		(1,576	)			(1,563	)
Loss before provision for (benefit from) income taxes		(4,153	)			(22,979	)
Provision for (benefit from) income taxes		1,128				(1,305	)
Net loss	$	(5,281	)		$	(21,674	)
Net loss per share, basic and diluted	$	(0.01	)		$	(0.03	)
Weighted-average shares used in computing net loss per share, basic and diluted		656,899				628,593

PINTEREST, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
	Three Months Ended March 31,
		2022				2021
Operating activities
Net loss	$	(5,281	)		$	(21,674	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		7,220				6,783
Share-based compensation		73,240				79,459
Non-cash charitable contributions		—				20,490
Other		2,978				2,029
Changes in assets and liabilities:
Accounts receivable		180,203				176,564
Prepaid expenses and other assets		(8,285	)			(91	)
Operating lease right-of-use assets		12,394				10,288
Accounts payable		(4,638	)			(717	)
Accrued expenses and other liabilities		(31,620	)			8,298
Operating lease liabilities		(12,822	)			(10,850	)
Net cash provided by operating activities		213,389				270,579
Investing activities
Purchases of property and equipment and intangible assets		(6,902	)			(1,251	)
Purchases of marketable securities		(155,181	)			(263,170	)
Sales of marketable securities		4,168				79,831
Maturities of marketable securities		207,319				149,532
Net cash provided by (used in) investing activities		49,404				(35,058	)
Financing activities
Proceeds from exercise of stock options, net		1,036				9,344
Net cash provided by financing activities		1,036				9,344
Effect of exchange rate changes on cash, cash equivalents and restricted cash		333				(355	)
Net increase in cash, cash equivalents and restricted cash		264,162				244,510
Cash, cash equivalents and restricted cash, beginning of period		1,427,064				678,911
Cash, cash equivalents and restricted cash, end of period	$	1,691,226			$	923,421
Supplemental cash flow information
Accrued property and equipment	$	3,462			$	125
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	7,085			$	630
Reconciliation of cash, cash equivalents and restricted cash to condensed consolidated balance sheets
Cash and cash equivalents	$	1,683,792			$	913,740
Restricted cash included in prepaid expenses and other current assets		1,137				571
Restricted cash included in other assets		6,297				9,110
Total cash, cash equivalents and restricted cash	$	1,691,226			$	923,421

PINTEREST, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS (in thousands) (unaudited)
		Three Months Ended March 31,
			2022				2021
Share-based compensation by function:
Cost of revenue		$	1,194			$	1,312
Research and development			52,890				56,475
Sales and marketing			11,769				11,891
General and administrative			7,387				9,781
Total share-based compensation		$	73,240			$	79,459
Amortization of acquired intangible assets by function:
Cost of revenue		$	699			$	94
Sales and marketing			135				—
General and administrative			197				158
Total amortization of acquired intangible assets		$	1,031			$	252
Reconciliation of total costs and expenses to non-GAAP costs and expenses:
Total costs and expenses		$	578,550			$	508,138
Share-based compensation			(73,240	)			(79,459	)
Amortization of acquired intangible assets			(1,031	)			(252	)
Non-cash charitable contributions			—				(20,490	)
Total non-GAAP costs and expenses		$	504,279			$	407,937
Reconciliation of net loss to Adjusted EBITDA:
Net loss		$	(5,281	)		$	(21,674	)
Depreciation and amortization			7,220				6,783
Share-based compensation			73,240				79,459
Interest income			(1,088	)			(1,492	)
Interest expense and other (income) expense, net			1,576				1,563
Provision for (benefit from) income taxes			1,128				(1,305	)
Non-cash charitable contributions			—				20,490
Adjusted EBITDA		$	76,795			$	83,824

PINTEREST, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS (in thousands, except per share amounts) (unaudited)
		Three Months Ended March 31,
			2022				2021
Reconciliation of net loss to non-GAAP net income:
Net loss		$	(5,281	)		$	(21,674	)
Share-based compensation			73,240				79,459
Amortization of acquired intangible assets			1,031				252
Non-cash charitable contributions			—				20,490
Non-GAAP net income		$	68,990			$	78,527
Basic weighted-average shares used in computing net loss per share			656,899				628,593
Weighted-average dilutive securities (1)			29,160				63,770
Diluted weighted-average shares used in computing non-GAAP net income per share			686,059				692,363
Non-GAAP net income per share		$	0.10			$	0.11

(1)	Gives effect to potential common stock instruments such as stock options, unvested restricted stock units and unvested restricted stock awards.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220427006031/en/

Press:

LeMia Jenkins

press@pinterest.com



Investor relations:

Neil Doshi

ir@pinterest.com

Source: Pinterest, Inc.

FAQ

What were Pinterest's Q1 2022 revenue results?

Pinterest's Q1 2022 revenue was $575 million, reflecting an 18% year-over-year increase.

How many Monthly Active Users did Pinterest have in Q1 2022?

Pinterest reported 433 million Monthly Active Users in Q1 2022, a 9% decrease compared to the previous year.

What was Pinterest's net loss in Q1 2022?

Pinterest experienced a GAAP net loss of $5 million in Q1 2022.

What is Pinterest's revenue guidance for Q2 2022?

Pinterest expects Q2 2022 revenue to grow around 11% year-over-year.

What are Pinterest's strategic priorities for 2022?

Pinterest's key strategic priorities include enhancing creator-led content, improving the Pinner experience, and expanding shopping capabilities.