Pinterest(US:PINS)2024-04-30 20:17Part I - Financial Information Item 1. Financial Statements (Unaudited) This section presents Pinterest's unaudited condensed consolidated financial statements for Q1 2024, detailing key financial positions and performance metrics Condensed Consolidated Balance Sheets Pinterest's balance sheet as of March 31, 2024, reflects growth in total assets, primarily driven by increased cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (as of March 31, 2024, in millions) | Balance Sheet Item | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $3,413.8 | $3,338.6 | | Cash and cash equivalents | $1,632.1 | $1,361.9 | | Total Assets | $3,666.7 | $3,594.4 | | Total Current Liabilities | $339.9 | $317.1 | | Total Liabilities | $522.9 | $503.7 | | Total Stockholders' Equity | $3,143.8 | $3,090.7 | Condensed Consolidated Statements of Operations Pinterest's Q1 2024 operations show revenue growth and a significantly narrowed net loss, reflecting improved operational efficiency Condensed Consolidated Statements of Operations (Three Months Ended March 31, in millions) | Income Statement Item | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $740.0 | $602.6 | +23% | | Total costs and expenses | $794.4 | $846.3 | -6% | | Loss from operations | $(54.4) | $(243.7) | +78% | | Net loss | $(24.8) | $(208.6) | +88% | | Net loss per share, basic and diluted | $(0.04) | $(0.31) | +87% | Condensed Consolidated Statements of Cash Flows Q1 2024 saw a significant increase in net cash provided by operating activities, primarily due to a smaller net loss Condensed Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, in millions) | Cash Flow Item | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $356.1 | $183.5 | | Net cash (used in) provided by investing activities | $(3.1) | $14.2 | | Net cash used in financing activities | $(83.0) | $(158.6) | | Net increase in cash, cash equivalents and restricted cash | $269.4 | $40.2 | Notes to Condensed Consolidated Financial Statements These notes detail significant accounting policies, contractual commitments, stock repurchase programs, and geographical revenue breakdowns - The company has a contractual commitment to purchase at least $3.25 billion of cloud services from AWS through April 2029, with a remaining commitment of $1.6 billion as of March 31, 202450 - A stock repurchase program of up to $1.0 billion of Class A common stock was authorized in September 2023, with the full $1.0 billion remaining available for repurchases as of March 31, 202460 Revenue by Geography (Three Months Ended March 31, in millions) | Geography | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | U.S. and Canada | $546.6 | $471.8 | +16% | | Europe | $124.0 | $97.4 | +27% | | Rest of World | $69.4 | $33.4 | +108% | | Total revenue | $740.0 | $602.6 | +23% | Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes strong Q1 2024 performance to user base growth and monetization, with revenue increasing 23% and net loss significantly narrowing Q1 2024 Key Financial and Operating Results | Metric | Q1 2024 | YoY Change | | :--- | :--- | :--- | | Revenue | $740.0 million | +23% | | Monthly Active Users (MAUs) | 518 million | +12% | | Net Loss | $(24.8) million | Improved from $(208.6) million | | Adjusted EBITDA | $112.9 million | +319% | - Revenue growth was primarily driven by a 12% increase in MAUs and a 10% increase in ARPU; the number of advertisements served increased by 38%, while the price of advertisements decreased by 11% compared to Q1 202396 Quarterly Average Revenue per User (ARPU) (For the three months ended March 31) | Geography | Q1 2024 ARPU | YoY Change | | :--- | :--- | :--- | | Global | $1.46 | +10% | | U.S. and Canada | $6.05 | +19% | | Europe | $0.86 | +17% | | Rest of World | $0.11 | +8% | - The company maintains a strong liquidity position with $2.78 billion in cash, cash equivalents, and marketable securities as of March 31, 2024, and has access to a $500.0 million revolving credit facility106108 Quantitative and Qualitative Disclosure About Market Risk The company is exposed to market risks, primarily foreign currency exchange rates and interest rates, which could impact its financial performance - The company's primary market risks are foreign currency exchange risk and interest rate risk125 - A hypothetical 100 basis point (1%) increase in interest rates would decrease the market value of the company's cash equivalents and marketable securities by $6.8 million as of March 31, 2024127 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2024, the company's disclosure controls and procedures are effective128 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls129 Part II - Other Information Legal Proceedings Pinterest is involved in various legal proceedings, but does not expect them to have a material adverse effect on its business or financial results - The company is involved in various legal proceedings arising in the ordinary course of business but does not expect them to have a material adverse effect on its financial results131133 Risk Factors This section details numerous risks, including reliance on advertising revenue, intense competition, data privacy regulations, and dependence on third-party platforms - Substantially all revenue is generated from advertising, making the business vulnerable to the loss of advertisers or reductions in their spending136 - The business faces significant competition for users and advertising revenue from large, established companies such as Amazon, Meta (Instagram), Google (YouTube), Snap, and TikTok155156 - The business is subject to complex and evolving data privacy laws like GDPR and CCPA, which could impact the ability to deliver targeted advertising and lead to significant penalties for non-compliance194195 - The dual-class stock structure concentrates approximately 73.7% of voting power with holders of Class B common stock, limiting the influence of Class A stockholders on corporate matters269 Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's equity security repurchases during Q1 2024, primarily to satisfy tax withholding obligations for employee restricted stock awards Issuer Purchases of Equity Securities (Q1 2024) | Period | Total Shares Purchased | Average Price Paid per Share ($) | | :--- | :--- | :--- | | Jan 2024 | 25,776 | 37.10 | | Feb 2024 | 18,450 | 35.11 | | Mar 2024 | 78,207 | 34.29 | | Total | 122,433 | N/A | - Shares were withheld from employees to satisfy tax withholding obligations on the release of restricted stock awards288