PINTEREST INC
For the period ended Jun 30, 2024. Filed Jul 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 30, 2024
PINS$18.96-4.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-30.
0001506293-24-000078
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-30.
0001506293-24-000143
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 91 previous paragraphs and 91 current paragraphs.
57 unchanged; 23 reworded; 11 added; 11 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Overview of Second Quarter Results
Current report
•Revenue was $853.7 million, an increase of 21% compared to the three months ended June 30, 2023.
Current report
•Share-based compensation expense was $196.4 million, an increase of$26.8 million compared to the three months ended June 30, 2023.
Current report
•Net income was $8.9 million.
Current report
•Adjusted EBITDA was $179.9 million.
Current report
•Cash, cash equivalents and marketable securities was $2,735.2 million.
Current report
•Headcount was 4,249.
Current report
(2)See “Non-GAAP Financial Measure” for more information and for a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.
Current report
Research and development for the three and six months ended June 30, 2024 increased by $43.4 million and $57.4 million, respectively, compared to the three and six months ended June 30, 2023. These increases were primarily due to $19.9 million and $28.0 million respective increases in share-based compensation expense and 16% and 13% respective increases in personnel expenses.
Current report
Sales and marketing for the three and six months ended June 30, 2024 increased by $22.1 million and $47.3 million respectively, compared to the three and six months ended June 30, 2023, primarily due to $12.1 million and $25.1 million respective increases in marketing expenses, 2% and 6% respective increases in personnel expenses and $4.5 million and $10.3 million respective increases in share-based compensation expense.
Current report
Given our recent history of generating net income in the U.S., we believe that there is a reasonable possibility that within the next twelve months sufficient positive evidence may become available to allow us to determine that a significant portion of the valuation allowance recorded against our U.S. deferred tax assets should be released. The reversal would result in a significant income tax benefit for the period when we release the valuation allowance in the U.S. However, the exact timing and amount of the valuation allowance release are subject to change based on our actual operating results.
Removed paragraphs (11)
Previous report
Overview of First Quarter Results
Previous report
•Revenue was $740.0 million, an increase of 23% compared to the three months ended March 31, 2023.
Previous report
•Share-based compensation expense was $162.5 million, an increase of$19.4 million compared to the three months ended March 31, 2023.
Previous report
•Net loss was $24.8 million.
Previous report
•Adjusted EBITDA was $112.9 million.
Previous report
•Cash, cash equivalents and marketable securities was $2,776.4 million.
Previous report
•Headcount was 4,149.
Previous report
Macroeconomic conditions, such as inflation, supply chain issues, changes in foreign currency exchange rates, competition from other platforms and other risks and uncertainties have impacted, and all or some of these factors may continue to impact, advertiser demand, user growth, user engagement, and our business, operations and financial results. See "Risk Factors" and "Note About Forward-Looking Statements” for additional details.
Previous report
(2)See “Non-GAAP Financial Measure” for more information and for a reconciliation of net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.
Previous report
Research and development for the three months ended March 31, 2024 increased by $13.9 million compared to the three months ended March 31, 2023. The increase was primarily due to a 10% increase in personnel expenses and an $8.1 million increase in share-based compensation expense offset by $4.1 million of restructuring charges during the three months ended March 31, 2023.
Previous report
Sales and marketing for the three months ended March 31, 2024 increased by $25.2 million compared to the three months ended March 31, 2023. The increase was primarily due to a $13.0 million increase in marketing expenses, a 9% increase in personnel expenses and a $5.8 million increase in share-based compensation expense offset by $2.7 million of restructuring charges during the three months ended March 31, 2023.
Reworded paragraphs (23)
Previous wording
•Monthly active users ("MAUs") were 518 million, an increase of 12% compared to March 31, 2023.
Current wording
•Monthly active users ("MAUs") were 522 million, an increase of 12% compared to June 30, 2023.
Previous wording
•Total costs and expenses were $794.4 million.
Current wording
•Total costs and expenses were $875.1 million.
Previous wording
•Loss from operations was $54.4 million.
Current wording
•Loss from operations was $21.4 million.
Previous wording
For the three months ended March 31, 2024, global ARPU was $1.46, which represents an increase of 10% compared to the three months ended March 31, 2023. For the three months ended March 31, 2024, U.S. and Canada ARPU was $6.05, an increase of 19%, Europe ARPU was $0.86, an increase of 17%, and Rest of World ARPU was $0.11, a increase of 8% compared to the three months ended March 31, 2023.
Current wording
For the three months ended June 30, 2024, global ARPU was $1.64, which represents an increase of 8% compared to the three months ended June 30, 2023. For the three months ended June 30, 2024, U.S. and Canada ARPU was $6.85, an increase of 16%, Europe ARPU was $1.03, an increase of 14%, and Rest of World ARPU was $0.13, an increase of 13% compared to the three months ended June 30, 2023.
Previous wording
We define Adjusted EBITDA as net loss adjusted to exclude depreciation and amortization expense, share-based compensation expense, interest income (expense), net, other income (expense), net, benefit from income taxes and restructuring charges.
Current wording
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, benefit from income taxes and restructuring charges.
Previous wording
Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA rather than net loss, the nearest GAAP equivalent. For example, Adjusted EBITDA excludes:
Current wording
Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA rather than net income (loss), the nearest GAAP equivalent. For example, Adjusted EBITDA excludes:
Previous wording
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net loss and our other financial results presented in accordance with GAAP. The following table presents a reconciliation of net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA (in thousands):
Current wording
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net income (loss) and our other financial results presented in accordance with GAAP. The following table presents a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA (in thousands):
Previous wording
Adjusted EBITDA. We define Adjusted EBITDA as net loss adjusted to exclude depreciation and amortization expense, share-based compensation expense, interest income (expense), net, other income (expense), net, benefit from income taxes and restructuring charges. See “Non-GAAP Financial Measure” for more information and for a reconciliation of net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.
Current wording
Adjusted EBITDA. 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, benefit from income taxes and restructuring charges. See “Non-GAAP Financial Measure” for more information and for a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.
Previous wording
Three Months Ended March 31, 2024 and 2023
Current wording
Three and Six Months Ended June 30, 2024 and 2023
Previous wording
Revenue for the three months ended March 31, 2024 increased by $137.4 million compared to the three months ended March 31, 2023 primarily due to growth in demand from our conversion and consideration objectives. Revenue growth was primarily driven by a 12% increase in MAUs as well as 10% increase in ARPU. The number of advertisements served increased by 38% while the price of advertisements decreased by 11% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Current wording
Revenue for the three and six months ended June 30, 2024 increased by $145.7 million and $283.1 million, respectively, compared to the three and six months ended June 30, 2023 primarily due to growth in demand from our conversion and consideration objectives. Revenue growth was primarily driven by a 12% increase in MAUs as well as 8% and 9% respective increases in ARPU for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023. The number of advertisements served increased by 35% and 36% for the three and six months ended June 30, 2024 while the price of advertisements decreased by 11% for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, respectively.
Previous wording
Revenue based on our estimate of the geographic location of our users increased by 22% in U.S. and Canada to $591.8 million, Europe revenue increased by 27% to $118.0 million, and Rest of World revenue increased by 25% to $30.2 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Current wording
Revenue based on our estimate of the geographic location of our users increased by 19% and 20% in U.S. and Canada to $672.9 million and $1,264.7 million, Europe revenue increased by 25% and 26% to $142.7 million and $260.7 million, and Rest of World revenue increased by 32% and 29% to $38.1 million and $68.3 million for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, respectively.
Previous wording
Cost of revenue for the three months ended March 31, 2024 increased by $10.2 million compared to the three months ended March 31, 2023 primarily due to higher absolute hosting costs due to higher compute utilization offset by infrastructure efficiency initiatives.
Current wording
Cost of revenue for the three and six months ended June 30, 2024 increased by $16.1 million and $26.3 million, respectively compared to the three and six months ended June 30, 2023 primarily due to increased users and engagement offset by infrastructure efficiency initiatives.
Previous wording
General and administrative for the three months ended March 31, 2024 decreased by $101.1 million compared to the three months ended March 31, 2023. The decrease was primarily due to $114.6 million of restructuring charges during the three months ended March 31, 2023, offset by a $5.6 million increase in outsourced services costs, a $4.8 million increase in share-based compensation expense and a 10% increase in personnel expenses.
Current wording
General and administrative for the three months ended June 30, 2024 increased by $12.2 million compared to the three months ended June 30, 2023 primarily due to $10.0 million in non income-based taxes. General and administrative for the six months ended June 30, 2024 decreased by $88.9 million, primarily due to $119.4 million of restructuring charges in 2023, offset by an $11.1 million increase in non income-based taxes, a $6.3 million increase in outsourced services costs and $6.2 million increase in share-based compensation expense.
Previous wording
Interest and other income (expense), net for the three months ended March 31, 2024 increased by $1.5 million compared to the three months ended March 31, 2023, primarily due to higher returns on our marketable securities as a result of higher interest rates offset by higher foreign currency exchange losses.
Current wording
Interest and other income (expense), net for the three and six months ended June 30, 2024 increasedby $3.0 million and $4.5 million, respectively, compared to the three and six months ended June 30, 2023, primarily due to higher returns on our marketable securities as a result of higher invested balances and higher interest rates offset by higher foreign currency exchange losses.
Previous wording
Benefit from income taxes was primarily due to losses generated in U.S. federal, state and certain foreign jurisdictions and includes the effects of the capitalization and amortization of research and development expenses as required by the 2017 Tax Cuts and Jobs Act.
Current wording
Benefit from income taxes for all periods presented was primarily due to the losses generated in U.S. federal, state and certain foreign jurisdictions. All periods include the effects of the capitalization and amortization of research and development expenses as required by the 2017 Tax Cuts and Jobs Act.
Previous wording
Net Loss and Adjusted EBITDA
Current wording
Net Income (Loss) and Adjusted EBITDA
Previous wording
Net loss for the three months ended March 31, 2024 was $(24.8) million compared to net loss of $(208.6) million for the three months ended March 31, 2023. Adjusted EBITDA was $112.9 million for the three months ended March 31, 2024 compared to $27.0 million for the three months ended March 31, 2023, due to the factors described above. See “Non-GAAP Financial Measure” for more information and for a reconciliation of net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.
Current wording
Net income for the three months ended June 30, 2024 was $8.9 million compared to net loss of $34.9 million for the three months ended June 30, 2023. Net loss for the six months ended June 30, 2024 was $15.9 million compared to $243.5 million for the six months ended June 30, 2023. Adjusted EBITDA was $179.9 million and $292.8 million for the three and six months ended June 30, 2024 compared to $107.0 million and $134.0 million for the three and six months ended June 30, 2023, due to the factors described above. See “Non-GAAP Financial Measure” for more information and for a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.
Previous wording
We finance our operations primarily through payments received from our customers. Our primary uses of cash are personnel-related costs and the cost of hosting our website and mobile application. As of March 31, 2024, we had $2,776.4 million in cash, cash equivalents and marketable securities. Our cash equivalents and marketable securities are primarily invested in short-duration fixed income securities, including government and investment-grade corporate debt securities and money market funds. As of March 31, 2024, $155.6 million of our cash and cash equivalents was held by our foreign subsidiaries.
Current wording
We finance our operations primarily through payments received from our customers. Our primary uses of cash are personnel-related costs and the cost of hosting our website and mobile application. As of June 30, 2024, we had $2,735.2 million in cash, cash equivalents and marketable securities. Our cash equivalents and marketable securities are primarily invested in short-duration fixed income securities, including government and investment-grade corporate debt securities and money market funds. As of June 30, 2024, $152.3 million of our cash and cash equivalents was held by our foreign subsidiaries.
Previous wording
On September 16, 2023, our board of directors authorized a stock repurchase program of up to $1.0 billion of our Class A common stock. Under the stock repurchase program, we are authorized to repurchase, from time-to-time, shares of our Class A common stock through open market purchases, in privately negotiated transactions or in such other manner as permitted by securities law and as determined by management at such time and in such amounts as management may decide. The program does not obligate us to repurchase any specific number of shares and may be modified, suspended or discontinued at any time. The timing, manner, price and amount of any repurchases are determined by management in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. As of March 31, 2024, $1.0 billion remains available for repurchases under the stock repurchase program.
Current wording
On September 16, 2023, our board of directors authorized a stock repurchase program of up to $1.0 billion of our Class A common stock. Under the stock repurchase program, we are authorized to repurchase, from time-to-time, shares of our Class A common stock through open market purchases, in privately negotiated transactions or in such other manner as permitted by securities law and as determined by management at such time and in such amounts as management may decide. The program does not obligate us to repurchase any specific number of shares and may be modified, suspended or discontinued at any time. The timing, manner, price and amount of any repurchases are determined by management in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. During the six months ended June 30, 2024, we repurchased and retired 804,297 shares of our Class A common stock for an aggregate purchase price of $34.4 million. As of June 30, 2024, $965.6 million remains available for repurchases under the stock repurchase program.
Previous wording
For the three months ended March 31, 2024 and 2023, our net cash flows were as follows (in thousands):
Current wording
For the six months ended June 30, 2024 and 2023, our net cash flows were as follows (in thousands):
Previous wording
Cash flows from operating activities consist of our net loss adjusted for certain non-cash reconciling items, such as share-based compensation expense, depreciation and amortization, non-cash restructuring charges and changes in our operating assets and liabilities. Net cash provided by operating activities increased by $172.7 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to a decrease in our net loss and an increase in accrued expenses and other liabilities due to timing of payments to vendors.
Current wording
Cash flows from operating activities consist of our net loss adjusted for certain non-cash reconciling items, such as share-based compensation expense, depreciation and amortization, non-cash restructuring charges and changes in our operating assets and liabilities. Net cash provided by operating activities increased by $216.4 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to a decrease in our net loss and an increase in accrued expenses and other liabilities due to timing of payments to vendors.
Previous wording
Cash flows from investing activities consist of capital expenditures for improvements to new and existing office spaces and acquisitions of businesses. We also actively manage our operating cash and cash equivalent balances and invest excess cash in short-duration marketable securities, the sales and maturities of which we use to fund our ongoing working capital requirements. Net cash (used in) provided by investing activities decreased by $17.3 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to a decrease in net sales of marketable securities.
Current wording
Cash flows from investing activities consist of capital expenditures for improvements to new and existing office spaces and acquisitions of businesses. We also actively manage our operating cash and cash equivalent balances and invest excess cash in short-duration marketable securities, the sales and maturities of which we use to fund our ongoing working capital requirements. Net cash used in investing activities increased by $195.8 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to an increase in net purchases of marketable securities.
Previous wording
Cash flows from financing activities consist of tax remittances on release of RSUs and RSAs, repurchases of our Class A common stock, and proceeds from the exercise of stock options. Net cash used in financing activities decreased by $75.6 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to the repurchase of Class A common stock during the three months ended March 31, 2023.
Current wording
Cash flows from financing activities consist of tax remittances on release of RSUs and RSAs, repurchases of our Class A common stock and proceeds from the exercise of stock options. Net cash used in financing activities decreased by $426.4 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to a decrease in the repurchase of Class A common stock offset by an increase in tax remittances on release of RSUs and RSAs due to an increase in our stock price.