Pinterest(PINS) - 2025 Q1 - Quarterly Results

Executive Summary Q1 2025 Performance Overview Pinterest reported strong first-quarter 2025 results, achieving 16% revenue growth and a record 570 million global monthly active users, an increase of 10% year-over-year | Metric | Q1 2025 | Growth (YoY) | Constant Currency Growth (YoY) | | :----- | :------ | :----------- | :----------------------------- | | Revenue | $855 million | 16% | 17% | | Global MAUs | 570 million | 10% | N/A | CEO Commentary CEO Bill Ready highlighted continued momentum in revenue, user growth, and engagement, attributing the company's resilience to its strategy and consistent execution amidst an evolving macroeconomic and digital ad landscape - Pinterest's strategy and consistent execution have made the company more resilient, with strong business fundamentals and healthy growth[2] - AI advancements are helping users make more intentional shopping decisions and driving performance for advertisers, contributing to market share gains and a solid foundation for long-term growth[2] Q1 2025 Financial Highlights Consolidated Financial Results Pinterest's Q1 2025 saw significant improvements in profitability, moving from a net loss to a net income, alongside strong growth in revenue and Adjusted EBITDA | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | % Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------- | | Revenue | $854,988 | $739,983 | 16 % | | Constant currency % growth | N/A | N/A | 17 % | | Net income (loss) | $8,922 | $(24,812) | NM | | Net income (loss) margin | 1 % | (3)% | N/A | | Non-GAAP net income | $159,562 | $119,846 | 33 % | | Adjusted EBITDA | $171,649 | $126,089 | 36 % | | Adjusted EBITDA margin | 20 % | 17 % | N/A | | Net cash provided by operating activities | $363,706 | $356,146 | 2 % | | Free cash flow | $356,417 | $344,033 | 4 % | Key Financial Metrics Summary The company achieved robust financial performance in Q1 2025, marked by double-digit revenue growth, a significant increase in global users, and positive GAAP net income and strong Adjusted EBITDA - Revenue reached $855 million, a 16% year-over-year increase (17% on a constant currency basis)[4] - Global Monthly Active Users (MAUs) grew 10% year-over-year to 570 million[4] - GAAP net income was $9 million, and Adjusted EBITDA was $172 million[4] - Net cash provided by operating activities was $364 million, with free cash flow at $356 million[4] Q1 2025 Operational Highlights Geographic Performance Pinterest demonstrated strong growth across all geographic regions in Q1 2025, with the Rest of World segment leading in both revenue and ARPU growth, while Europe showed significant ARPU improvement | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | % Change | | :-------------------- | :----------------- | :----------------- | :------- | | Revenue - Global | $855 | $740 | 16 % | | Revenue - U.S. and Canada | $663 | $592 | 12 % | | Revenue - Europe | $147 | $118 | 24 % | | Revenue - Rest of World | $45 | $30 | 49 % | | MAUs - Global | 570 | 518 | 10 % | | MAUs - U.S. and Canada | 102 | 98 | 4 % | | MAUs - Europe | 148 | 140 | 5 % | | MAUs - Rest of World | 320 | 279 | 14 % | | ARPU - Global | $1.52 | $1.46 | 5 % | | ARPU - U.S. and Canada | $6.54 | $6.05 | 8 % | | ARPU - Europe | $1.00 | $0.86 | 17 % | | ARPU - Rest of World | $0.14 | $0.11 | 29 % | Business Outlook Q2 2025 Guidance Pinterest provided guidance for Q2 2025, projecting continued revenue growth and a healthy range for Adjusted EBITDA | Metric | Q2 2025 Guidance | | :---------------- | :--------------- | | Revenue | $960M - $980M | | Revenue Growth YoY | 12% - 15% | | Adjusted EBITDA | $217M - $237M | Guidance Disclaimer The company has not provided a GAAP reconciliation for its forward-looking Adjusted EBITDA guidance due to the inherent uncertainty and variability of reconciling items like share-based compensation and income taxes - A GAAP reconciliation for forward-looking Adjusted EBITDA is not provided due to the uncertainty and potential variability of reconciling items such as share-based compensation expense and income taxes[7] - Material changes to reconciling items could significantly affect future GAAP results, and any reconciliation provided might imply a misleading degree of precision[7] Additional Company Information Webcast and Conference Call Information Details for accessing the live audio webcast and replay of the Q1 2025 earnings call, along with related materials, are provided for investors - A live audio webcast of the Q1 2025 earnings call is available at investor.pinterestinc.com, starting May 8, 2025, at 1:30 PM (PT) / 4:30 PM (ET)[9] - The press release, non-GAAP reconciliations, and slide presentation are also available, with a webcast recording accessible for 90 days[9] - The investor relations website (investor.pinterestinc.com) is used for disclosing material nonpublic information and fulfilling Regulation FD obligations[10] Forward-Looking Statements This section outlines the nature of forward-looking statements, emphasizing that they involve substantial assumptions, risks, and uncertainties that could cause actual results to differ materially from projections - Forward-looking statements are identified by specific terminology and relate to future events, involving known and unknown risks, uncertainties, and assumptions[11] - Key risks include general economic uncertainty, financial performance, user attraction and retention, product development, brand reputation, security compromises, competition, international expansion, AI development, and regulatory compliance[11] - Investors should not place undue reliance on these statements, which are based on information available as of May 8, 2025, and the company undertakes no duty to update them unless required by law[11] About Non-GAAP Financial Measures Pinterest utilizes various non-GAAP financial measures to supplement its GAAP financial statements, providing additional insights into operating results and aiding financial decision-making - Non-GAAP financial measures, including Adjusted EBITDA, non-GAAP net income, and free cash flow, are used to supplement GAAP statements and evaluate operating results[12] - These measures help identify underlying business trends by excluding certain income and expenses, enhancing transparency for management and investors[13] - Limitations exist, such as the exclusion of recurring non-cash charges (depreciation, amortization, share-based compensation) and the impact of foreign currency changes on constant currency revenue[13] Definitions and Limitations - Adjusted EBITDA is defined as net income (loss) adjusted for depreciation, amortization, share-based compensation, payroll tax related to share-based compensation, interest, other income/expense, and income taxes, along with certain non-recurring items[13] - Non-GAAP costs and expenses, and non-GAAP net income, exclude amortization of acquired intangible assets, share-based compensation, and related payroll tax expense. Non-GAAP net income also applies a fixed long-term projected tax rate (20% for 2024 and 2025)[13] - Free cash flow is defined as net cash provided by operating activities less purchases of property and equipment, and constant currency revenue translates current period revenue using prior period exchange rates[13] Limitation of Key Metrics and Other Data Pinterest defines and explains its key metrics, Monthly Active Users (MAUs) and Average Revenue Per User (ARPU), acknowledging inherent challenges in measuring these metrics across a large global user base - MAU is defined as an authenticated Pinterest user visiting the website, mobile app, or interacting via browser/site extensions at least once during a 30-day period[15] - ARPU is calculated as total revenue in a given geography divided by the average MAUs in that geography during the period[15] - There are inherent challenges in measuring usage across large online populations, and estimates may change due to improvements in technology or methodology[15] Contact Information Contact details for press and investor relations are provided for inquiries - Press inquiries can be directed to Tessa Chen at press@pinterest.com[16] - Investor relations inquiries can be directed to Andrew Somberg at ir@pinterest.com[16] Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets The condensed consolidated balance sheets provide a snapshot of Pinterest's financial position as of March 31, 2025, and December 31, 2024, detailing assets, liabilities, and stockholders' equity | ASSETS (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Total current assets | $3,402,258 | $3,484,707 | | Total assets | $5,282,696 | $5,342,660 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | | | | Total current liabilities | $404,399 | $398,133 | | Total liabilities | $594,227 | $591,506 | | Total stockholders' equity | $4,688,469 | $4,751,154 | Condensed Consolidated Statements of Operations The condensed consolidated statements of operations present Pinterest's financial performance for the three months ended March 31, 2025, and 2024, showing revenue, costs, and net income (loss) | (in thousands, except per share amounts) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $854,988 | $739,983 | | Total costs and expenses | $890,465 | $794,399 | | Loss from operations | $(35,477) | $(54,416) | | Net income (loss) | $8,922 | $(24,812) | | Net income (loss) per share: Basic | $0.01 | $(0.04) | | Net income (loss) per share: Diluted | $0.01 | $(0.04) | Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows detail the cash generated and used by Pinterest across operating, investing, and financing activities for the three months ended March 31, 2025, and 2024 | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $363,706 | $356,146 | | Net cash provided by (used in) investing activities | $11,949 | $(3,119) | | Net cash used in financing activities | $(260,701) | $(82,952) | | Net increase in cash, cash equivalents and restricted cash | $115,856 | $269,366 | | Cash, cash equivalents and restricted cash, end of period | $1,257,077 | $1,637,898 | Reconciliation of GAAP to Non-GAAP Financial Results Share-Based Compensation, Payroll Tax, and Amortization This section provides a detailed breakdown of share-based compensation, related payroll tax expense, and amortization of acquired intangible assets by function, which are key adjustments for non-GAAP calculations | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Total share-based compensation | $187,426 | $162,473 | | Total payroll tax expense related to share-based compensation | $13,852 | $13,171 | | Total amortization of acquired intangible assets | $1,840 | $1,840 | Adjusted EBITDA Reconciliation The reconciliation details the adjustments made to GAAP net income (loss) to arrive at Adjusted EBITDA, providing a clearer view of operational performance by excluding non-cash and non-recurring items | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Net income (loss) | $8,922 | $(24,812) | | Depreciation and amortization | $5,848 | $4,861 | | Share-based compensation | $187,426 | $162,473 | | Payroll tax expense related to share-based compensation | $13,852 | $13,171 | | Interest (income) expense, net | $(27,293) | $(31,266) | | Other (income) expense, net | $(4,519) | $4,526 | | Benefit from income taxes | $(12,587) | $(2,864) | | Adjusted EBITDA | $171,649 | $126,089 | Non-GAAP Net Income and Free Cash Flow Reconciliation This section reconciles GAAP net income (loss) to non-GAAP net income and presents the calculation of free cash flow, offering alternative performance metrics for investors | (in thousands, except per share amounts) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Net income (loss) | $8,922 | $(24,812) | | Share-based compensation | $187,426 | $162,473 | | Payroll tax expense related to share-based compensation | $13,852 | $13,171 | | Amortization of acquired intangible assets | $1,840 | $1,840 | | Income tax effects and tax adjustments | $(52,478) | $(32,826) | | Non-GAAP net income | $159,562 | $119,846 | | Non-GAAP net income per share | $0.23 | $0.17 | | Net cash provided by operating activities | $363,706 | $356,146 | | Less: Purchases of property and equipment | $(7,289) | $(12,113) | | Free cash flow | $356,417 | $344,033 | - Payroll tax expense related to share-based compensation is now excluded from Adjusted EBITDA and non-GAAP net income to better reflect core business operations, with prior periods restated[26] - The non-GAAP income tax provision uses a fixed long-term projected tax rate of 20% for 2024 and 2025, subject to annual re-evaluation[13][26]