Q4 Revenue of $981 million grew 12%, marking
continued double-digit revenue growth in the second half of
2023
Global monthly active users reached an all-time
high of 498 million
Pinterest, Inc. (NYSE: PINS) today announced financial results
for the quarter and year ended December 31, 2023.
- Q4 revenue grew 12% year over year to $981 million. 2023
revenue increased 9% year over year to $3,055 million.
- Global Monthly Active Users (MAUs) increased 11% year over year
to 498 million.
- GAAP net income was $201 million for Q4. GAAP net loss was $36
million for 2023. Adjusted EBITDA was $365 million and $683 million
for Q4 and 2023, respectively.
- Total costs and expenses were $785 million and $3,181 million
for Q4 and 2023, respectively.
“We had a strong Q4, bookending a transformative year for
Pinterest,” said Bill Ready, CEO of Pinterest. “2023 was our most
productive year yet as we accelerated our product velocity and
launched more solutions than ever before. Brands are responding by
using our full suite of products to drive even better campaign
performance. Pinterest is the rare business where the interests of
users and advertisers are aligned. It’s proven to be true as we
continue to post double-digit revenue growth and have achieved an
all-time high for global MAU. The changes we made have set us up to
be a stronger and more efficient company as we double down on our
momentum in 2024.”
Q4 and Full Year 2023 Financial Highlights
The following table summarizes our consolidated financial
results (in thousands, except percentages, unaudited):
Three Months Ended
December 31,
% Change
Year Ended
December 31,
% Change
2023
2022
2023
2022
Revenue
$
981,262
$
877,209
12
%
$
3,055,071
$
2,802,574
9
%
Net income (loss)
$
201,178
$
17,491
1,050
%
$
(35,610
)
$
(96,047
)
63
%
Net income (loss) margin
21
%
2
%
(1
)%
(3
)%
Non-GAAP net income*
$
366,245
$
203,109
80
%
$
759,382
$
425,988
78
%
Adjusted EBITDA*
$
364,801
$
195,785
86
%
$
683,463
$
441,935
55
%
Adjusted EBITDA margin*
37
%
22
%
22
%
16
%
_______________
* 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.
Q4 and Full Year 2023 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
December 31,
% Change
Year Ended
December 31,
% Change
2023
2022
2023
2022
Revenue - Global
$
981
$
877
12
%
$
3,055
$
2,803
9
%
Revenue - U.S. and Canada
$
779
$
722
8
%
$
2,448
$
2,309
6
%
Revenue - Europe
$
162
$
123
32
%
$
483
$
398
21
%
Revenue - Rest of World
$
41
$
32
27
%
$
125
$
95
31
%
MAUs - Global
498
450
11
%
498
450
11
%
MAUs - U.S. and Canada
97
95
2
%
97
95
2
%
MAUs - Europe
135
124
8
%
135
124
8
%
MAUs - Rest of World
266
231
15
%
266
231
15
%
ARPU - Global
$
2.00
$
1.96
2
%
$
6.44
$
6.36
1
%
ARPU - U.S. and Canada
$
8.07
$
7.60
6
%
$
25.52
$
24.38
5
%
ARPU - Europe
$
1.23
$
1.01
23
%
$
3.73
$
3.23
15
%
ARPU - Rest of World
$
0.15
$
0.14
11
%
$
0.50
$
0.43
17
%
Guidance
For Q1 2024, we expect revenue to be in the range of $690
million to $705 million, representing 15-17% growth year over year.
We expect Q1 2024 Non-GAAP operating expenses* to be in the range
of $450 million to $465 million, representing 9-13% growth year
over year. Please note that our operating expense guidance does not
include cost of revenue.
We intend to provide further details on our outlook during the
conference call.
_______________
*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, which is impacted by, among
other things, employee retention and decisions around future equity
grants to employees. 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.
Webcast and conference call information
A live audio webcast of our fourth quarter and full year 2023
earnings release call will be available at
investor.pinterestinc.com. The call begins today at 1:30 PM (PT) /
4:30 PM (ET). This press release, including the reconciliations of
certain non-GAAP measures to their nearest comparable GAAP measures
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 contains 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. Forward-looking statements can be identified by the
fact that they do not relate strictly to historical or current
facts and are often characterized by the use of words such as
"believes," "estimates," "expects," "projects," "may," "will,"
"can," "intends," "plans," "targets," "forecasts," "anticipates,"
or and similar expressions, or by discussions of strategy, plans or
intentions. Such forward-looking statements involve known and
unknown risks, uncertainties, assumptions and other important
factors that could cause our actual results, performance or
achievements, or industry results, to differ materially from
historical results or any future results, performance or
achievements expressed, suggested or implied by such
forward-looking statements. These risks and uncertainties include,
but are not limited to, statements about: general economic
uncertainty in global markets and a worsening of global economic
conditions or low levels of economic growth, including inflation,
stress in the banking industry, foreign exchange fluctuations and
supply-chain issues; the effect of general economic and political
conditions; our financial performance, including revenue, cost and
expenses and cash flows; our ability to attract, retain and recover
users and maintain and grow their level of engagement; our ability
to provide content that is useful and relevant to users' personal
taste and interests; our ability to develop successful new products
or improve existing ones; our ability to maintain and enhance our
brand and reputation; potential harm caused by compromises in
security, including our cybersecurity protections and resources and
costs required to prevent, detect and remediate potential security
breaches; potential harm caused by changes in online application
stores or internet search engines' methodologies, particularly
search engine optimization methodologies and policies;
discontinuation, disruptions or outages in third-party single
sign-on access; our ability to compete effectively in our industry;
our ability to scale our business, including our monetization
efforts; our ability to attract and retain advertisers and scale
our revenue model; our ability to attract and retain creators and
publishers that create relevant and engaging content; our ability
to develop effective products and tools for advertisers, including
measurement tools; our ability to expand and monetize our platform
internationally; our ability to effectively manage the growth of
our business; our ability to continue to use and develop artificial
intelligence ("AI") as well as managing the challenges and risks
posed by AI; our ability to successfully manage our flexible work
model with a more distributed workforce; our lack of operating
history and ability to sustain profitability; decisions that reduce
short-term revenue or profitability or do not produce the long-term
benefits we expect; fluctuations in our operating results; our
ability to raise additional capital on favorable terms or at all;
our ability to realize anticipated benefits from mergers and
acquisitions, joint ventures, strategic partnerships and other
investments; our ability to protect our intellectual property; our
ability to receive, process, store, use and share data, and
compliance with laws and regulations related to data privacy and
content; current or potential litigation and regulatory actions
involving us; our ability to comply with modified or new laws and
regulations applying to our business, and potential harm to our
business as a result of those laws and regulations; real or
perceived inaccuracies in metrics related to our business;
disruption of, degradation in or interference with our use of
Amazon Web Services and our infrastructure; and our ability to
attract and retain personnel. These and other potential risks and
uncertainties that could cause actual results to differ from the
results predicted are more fully detailed in our Annual Report on
Form 10-K for the fiscal year ended December 31, 2023, 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 February 8, 2024. 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, non-GAAP net income per share and
constant currency revenue growth rates. 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 (expense), net, other income
(expense), net, provision for income taxes, restructuring charges
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, restructuring charges 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 these measures 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 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 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 non-GAAP financial measures rather than 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 MAU 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. The number of MAUs
do not include Shuffles users unless they would otherwise qualify
as MAUs. 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 ARPU 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)
December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
1,361,936
$
1,611,063
Marketable securities
1,149,148
1,087,164
Accounts receivable, net of allowances of
$10,635 and $12,672 as of December 31, 2023 and 2022,
respectively
763,159
681,532
Prepaid expenses and other current
assets
64,316
74,918
Total current assets
3,338,559
3,454,677
Property and equipment, net
32,225
59,575
Operating lease right-of-use assets
92,119
206,253
Goodwill and intangible assets, net
117,462
124,822
Other assets
14,040
17,403
Total assets
$
3,594,405
$
3,862,730
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
79,058
$
87,920
Accrued expenses and other current
liabilities
238,032
292,611
Total current liabilities
317,090
380,531
Operating lease liabilities
160,616
178,694
Other liabilities
26,019
21,851
Total liabilities
503,725
581,076
Commitments and contingencies
Stockholders’ equity:
Class A common stock, $0.00001 par value,
6,666,667 shares authorized, 591,663 and 593,918 shares issued and
outstanding as of December 31, 2023 and 2022, respectively; Class B
common stock, $0.00001 par value, 1,333,333 shares authorized,
86,355 and 89,284 shares issued and outstanding as of December 31,
2023 and 2022, respectively
7
7
Additional paid-in capital
5,241,954
5,407,724
Accumulated other comprehensive loss
(1,013
)
(11,419
)
Accumulated deficit
(2,150,268
)
(2,114,658
)
Total stockholders’ equity
3,090,680
3,281,654
Total liabilities and stockholders’
equity
$
3,594,405
$
3,862,730
PINTEREST, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
2023
2022
Revenue
$
981,262
$
877,209
$
3,055,071
$
2,802,574
Costs and expenses:
Cost of revenue
178,096
185,028
688,760
678,597
Research and development
267,981
265,240
1,068,416
948,980
Sales and marketing
240,867
317,270
911,166
933,133
General and administrative
98,068
103,803
512,407
343,541
Total costs and expenses
785,012
871,341
3,180,749
2,904,251
Income (loss) from operations
196,250
5,868
(125,678
)
(101,677
)
Interest income (expense), net
28,959
16,586
105,439
30,235
Other income (expense), net
5,893
6,320
3,799
(14,502
)
Income (loss) before provision for income
taxes
231,102
28,774
(16,440
)
(85,944
)
Provision for income taxes
29,924
11,283
19,170
10,103
Net income (loss)
$
201,178
$
17,491
$
(35,610
)
$
(96,047
)
Net income (loss) per share:
Basic
$
0.30
$
0.03
$
(0.05
)
$
(0.14
)
Diluted
$
0.29
$
0.03
$
(0.05
)
$
(0.14
)
Weighted-average shares used in computing
net income (loss) per share:
Basic
674,000
674,385
674,641
665,732
Diluted
695,031
696,932
674,641
665,732
PINTEREST, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Year Ended December
31,
2023
2022
Operating activities
Net loss
$
(35,610
)
$
(96,047
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
21,509
46,489
Share-based compensation
647,860
497,123
Non-cash charitable contributions
12,890
—
Impairment and abandonment charges for
leases and leasehold improvements
117,315
—
Amortization (accretion) of investment
premiums discount
(21,897
)
(638
)
Other
(2,438
)
(13,251
)
Changes in assets and liabilities:
Accounts receivable
(80,782
)
(28,856
)
Prepaid expenses and other assets
18,102
(30,214
)
Operating lease right-of-use assets
55,324
56,024
Accounts payable
(9,261
)
70,777
Accrued expenses and other liabilities
(43,544
)
20,627
Operating lease liabilities
(66,507
)
(52,832
)
Net cash provided by operating
activities
612,961
469,202
Investing activities
Purchases of property and equipment and
intangible assets
(8,063
)
(28,984
)
Purchases of marketable securities
(1,308,020
)
(1,028,480
)
Sales of marketable securities
35,850
7,417
Maturities of marketable securities
1,243,240
1,007,861
Acquisition of business, net of cash
acquired
—
(86,059
)
Net cash used in investing activities
(36,993
)
(128,245
)
Financing activities
Proceeds from exercise of stock options,
net
8,256
12,882
Repurchases of Class A common stock
(500,000
)
—
Shares repurchased for tax withholdings on
release of restricted stock units and restricted stock awards
(335,019
)
(161,809
)
Net cash used in financing activities
(826,763
)
(148,927
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
1,667
(1,434
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(249,128
)
190,596
Cash, cash equivalents and restricted
cash, beginning of period
1,617,660
1,427,064
Cash, cash equivalents and restricted
cash, end of period
$
1,368,532
$
1,617,660
Supplemental cash flow
information
Cash paid for income taxes, net
$
19,173
$
10,008
Non-cash investing and financing
activities:
Operating lease right-of-use assets
obtained in exchange for operating lease liabilities
$
32,784
$
31,515
Reconciliation of cash, cash
equivalents and restricted cash to condensed consolidated balance
sheets
Cash and cash equivalents
$
1,361,936
$
1,611,063
Restricted cash included in prepaid
expenses and other current assets
2,542
1,067
Restricted cash included in other
assets
4,054
5,530
Total cash, cash equivalents and
restricted cash
$
1,368,532
$
1,617,660
PINTEREST, INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL RESULTS
(in thousands)
(unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
2023
2022
Share-based compensation by
function:
Cost of revenue
$
3,079
$
2,829
$
11,117
$
7,629
Research and development
107,240
100,166
422,964
324,161
Sales and marketing
25,354
45,903
96,798
99,467
General and administrative
27,554
21,414
116,981
65,866
Total share-based compensation
$
163,227
$
170,312
$
647,860
$
497,123
Amortization of acquired intangible
assets by function:
Cost of revenue
$
1,508
$
4,974
$
6,031
$
8,583
Sales and marketing
135
10,135
540
15,540
General and administrative
197
197
789
789
Total amortization of acquired intangible
assets
$
1,840
$
15,306
$
7,360
$
24,912
Restructuring charges by
function:
Research and development
$
—
$
—
$
4,696
$
—
Sales and marketing
—
—
2,749
—
General and administrative
—
—
119,437
—
Total restructuring charges
$
—
$
—
$
126,882
$
—
Reconciliation of total costs and
expenses to non-GAAP costs and expenses:
Total costs and expenses
$
785,012
$
871,341
$
3,180,749
$
2,904,251
Share-based compensation
(163,227
)
(170,312
)
(647,860
)
(497,123
)
Amortization of acquired intangible
assets
(1,840
)
(15,306
)
(7,360
)
(24,912
)
Non-cash charitable contributions
—
—
(12,890
)
—
Restructuring charges
—
—
(126,882
)
—
Total non-GAAP costs and expenses
$
619,945
$
685,723
$
2,385,757
$
2,382,216
Reconciliation of net income (loss) to
Adjusted EBITDA:
Net income (loss)
$
201,178
$
17,491
$
(35,610
)
$
(96,047
)
Depreciation and amortization
5,324
19,605
21,509
46,489
Share-based compensation
163,227
170,312
647,860
497,123
Interest (income) expense, net
(28,959
)
(16,586
)
(105,439
)
(30,235
)
Other (income) expense, net
(5,893
)
(6,320
)
(3,799
)
14,502
Provision for income taxes
29,924
11,283
19,170
10,103
Restructuring charges
—
—
126,882
—
Non-cash charitable contributions
—
—
12,890
—
Adjusted EBITDA
$
364,801
$
195,785
$
683,463
$
441,935
PINTEREST, INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL RESULTS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
2023
2022
Reconciliation of net income (loss) to
non-GAAP net income:
Net income (loss)
$
201,178
$
17,491
$
(35,610
)
$
(96,047
)
Share-based compensation
163,227
170,312
647,860
497,123
Amortization of acquired intangible
assets
1,840
15,306
7,360
24,912
Restructuring charges
—
—
126,882
—
Non-cash charitable contributions
—
—
12,890
—
Non-GAAP net income
$
366,245
$
203,109
$
759,382
$
425,988
Basic weighted-average shares used in
computing net income (loss) per share
674,000
674,385
674,641
665,732
Weighted-average dilutive
securities(1)
21,031
22,547
18,927
25,200
Diluted weighted-average shares used in
computing non-GAAP net income per share
695,031
696,932
693,568
690,932
Non-GAAP net income per share
$
0.53
$
0.29
$
1.09
$
0.62
_______________
(1) Gives effect to potential common stock
instruments such as stock options, unvested restricted stock units
and unvested restricted stock awards.
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