Pinterest, Inc. (NYSE:PINS) today announced financial results for the quarter and year ended December 31, 2022.

Q4 revenue grew 4% year over year to $877 million. 2022 revenue increased 9% year over year to $2,803 million.

Global Monthly Active Users (MAUs) increased 4% year over year to 450 million.

GAAP net income was $17 million for Q4. GAAP net loss was $96 million for 2022. Adjusted EBITDA was $196 million and $442 million for Q4 and 2022, respectively.

Pinterest also announced its board of directors' authorization to repurchase up to $500 million of its Class A common stock over the next 12 months.

"2022 was a solid year as we returned to MAU growth, deepened engagement and saw our personalization and relevance investments start to pay off," said Bill Ready, Pinterest CEO. "We're building upon this foundation by staying focused on growing monetization per user, integrating shopping throughout the core user experience, and increasingly driving operational rigor. While the industry as a whole is facing headwinds, we are adapting quickly to a changing macro environment and are committed to creating a more positive online experience for our users and advertisers."

Pinterest also announced that its board of directors has authorized a stock repurchase program of up to $500 million of its Class A common stock over the next 12 months. Under the stock repurchase program, Pinterest is authorized to repurchase, from time-to-time, shares of its Class A common stock through open market purchases, in privately negotiated transactions or in other such 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 Pinterest to repurchase any specific number of shares and may be modified, suspended or discontinued at any time.

Chief Financial Officer Transition

Separately, Pinterest today announced that Todd Morgenfeld, Chief Financial Officer and Head of Business Operations, will transition from Pinterest to pursue new career opportunities on July 1, 2023.

"On behalf of the entire company and Board of Directors, I'd like to thank Todd for his outstanding contributions to Pinterest over the past six-plus years," said Bill Ready, CEO of Pinterest. "Todd led the company's IPO process, built a strong finance function and advanced our revenue functions and business operations. He's been a disciplined creator of shareholder value; during Todd's tenure, Pinterest's revenue increased ten-fold and margins expanded meaningfully. I'm personally grateful for Todd's partnership over the past two quarters and appreciate his commitment to a seamless transition."

"I am honored to have been part of the transformational growth and change Pinterest has undergone these last six years," said Morgenfeld. "I'm especially proud of the extraordinary team we have built, and I look forward to watching the company continue to innovate, execute and grow over the next several years."

As part of this announcement, effective immediately, Andréa Mallard, Chief Marketing and Communications Officer and Bill Watkins, Chief Revenue Officer, will now report directly to Bill Ready, CEO. These functions are critical to delivering value to Pinners and advertisers and will work closely with the Executive Team on executing against strategic priorities.

Q4 and Full Year 2022 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
	2022			2021			% Change		2022			2021			% Change
Revenue	$	877,209		$	846,655		4	%	$	2,802,574		$	2,578,027		9	%

Net income (loss)	$	17,491		$	174,699		(90	)%	$	(96,047	)	$	316,438		(130	)%

Non-GAAP net income*	$	203,109		$	339,447		(40	)%	$	425,988		$	778,455		(45	)%

Adjusted EBITDA*	$	195,785		$	350,859		(44	)%	$	441,935		$	814,369		(46	)%
Adjusted EBITDA margin*		22	%		41	%				16	%		32	%
____________________
NM - not meaningful
* 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 2022 Other Highlights

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 December 31,				% Change		Year Ended December 31,				% Change
	2022		2021		% Change		2022		2021		% Change
Revenue - Global	$	877	$	847	4	%	$	2,803	$	2,578	9	%
Revenue - U.S. and Canada	$	722	$	689	5	%	$	2,309	$	2,133	8	%
Revenue - Europe	$	123	$	132	(7	)%	$	398	$	382	4	%
Revenue - Rest of World	$	32	$	25	26	%	$	95	$	62	52	%

MAUs - Global		450		431	4	%		450		431	4	%
MAUs - U.S. and Canada		95		95	—	%		95		95	—	%
MAUs - Europe		124		122	2	%		124		122	2	%
MAUs - Rest of World		231		215	8	%		231		215	8	%

ARPU - Global	$	1.96	$	1.93	1	%	$	6.36	$	5.79	10	%
ARPU - U.S. and Canada	$	7.60	$	7.17	6	%	$	24.38	$	21.07	16	%
ARPU - Europe	$	1.01	$	1.10	(9	)%	$	3.23	$	3.03	7	%
ARPU - Rest of World	$	0.14	$	0.11	21	%	$	0.43	$	0.29	49	%

Guidance

Our current expectation is that Q1 2023 revenue will grow low single digits on a year-over-year percentage basis, which takes into account slightly lower foreign exchange headwinds than Q4 2022. We expect our Q1 2023 non-GAAP operating expenses to decline to low double digits percent quarter-over-quarter*.

_____________

^*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 2022 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. We will not be publishing a letter to shareholders this quarter. 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: general economic and political uncertainty in global markets and a worsening of global economic conditions or low levels of economic growth, including inflation, fear of recession, foreign exchange fluctuations and supply-chain issues as well as events such as Russia's invasion of Ukraine; 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; the impact of the COVID-19 pandemic, including its impact on our business as well as on global and regional economies and economic activity; 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 Annual Report on Form 10-K for the fiscal year ended December 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 February 6, 2023. 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, 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. 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 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)

	December 31,
	2022			2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,611,063		$	1,419,630
Marketable securities		1,087,164			1,060,488
Accounts receivable, net of allowances of $12,672 and $8,282 as of as of December 31, 2022 and 2021, respectively		681,532			653,355
Prepaid expenses and other current assets		74,918			48,090
Total current assets		3,454,677			3,181,563
Property and equipment, net		59,575			53,401
Operating lease right-of-use assets		206,253			227,912
Goodwill and intangible assets, net		124,822			61,115
Other assets		17,403			13,247
Total assets	$	3,862,730		$	3,537,238
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	87,920		$	17,675
Accrued expenses and other current liabilities		292,611			242,131
Total current liabilities		380,531			259,806
Operating lease liabilities		178,694			209,181
Other liabilities		21,851			29,508
Total liabilities		581,076			498,495
Commitments and contingencies
Stockholders' equity:
Class A common stock, $0.00001 par value, 6,666,667 shares authorized, 593,918 and 568,228 shares issued and outstanding as of December 31, 2022 and 2021, respectively; Class B common stock, $0.00001 par value, 1,333,333 shares authorized, 89,284 and 88,644 shares issued and outstanding as of December 31, 2022 and 2021, respectively		7			7
Additional paid-in capital		5,407,724			5,059,528
Accumulated other comprehensive loss		(11,419	)		(2,181	)
Accumulated deficit		(2,114,658	)		(2,018,611	)
Total stockholders' equity		3,281,654			3,038,743
Total liabilities and stockholders' equity	$	3,862,730		$	3,537,238

PINTEREST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

	Three Months Ended December 31,					Year Ended December 31,
	2022		2021			2022			2021
Revenue	$	877,209	$	846,655		$	2,802,574		$	2,578,027
Costs and expenses:
Cost of revenue		185,028		141,248			678,597			529,320
Research and development		265,240		240,856			948,980			780,264
Sales and marketing		317,270		190,525			933,133			641,279
General and administrative		103,803		94,578			343,541			300,977
Total costs and expenses		871,341		667,207			2,904,251			2,251,840
Income (loss) from operations		5,868		179,448			(101,677	)		326,187
Interest income		17,172		822			30,943			4,204
Interest expense and other income (expense), net		5,734		(3,429	)		(15,210	)		(9,420	)
Income (loss) before provision for income taxes		28,774		176,841			(85,944	)		320,971
Provision for income taxes		11,283		2,142			10,103			4,533
Net income (loss)	$	17,491	$	174,699		$	(96,047	)	$	316,438
Net income (loss) per share attributable to common stockholders:
Basic	$	0.03	$	0.27		$	(0.14	)	$	0.49
Diluted	$	0.03	$	0.25		$	(0.14	)	$	0.46
Weighted-average shares used in computing net income per share attributable to common stockholders:
Basic		674,385		651,077			665,732			640,030
Diluted		674,385		690,167			665,732			691,651

PINTEREST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

	Year Ended December 31,
	2022			2021
Operating activities
Net income (loss)	$	(96,047	)	$	316,438
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		46,489			27,500
Share-based compensation		497,123			415,382
Non-cash charitable contributions		—			45,300
Other		(13,889	)		9,607
Changes in assets and liabilities:
Accounts receivable		(28,856	)		(88,862	)
Prepaid expenses and other assets		(30,214	)		(14,727	)
Operating lease right-of-use assets		56,024			43,995
Accounts payable		70,777			(33,451	)
Accrued expenses and other liabilities		20,627			82,435
Operating lease liabilities		(52,832	)		(50,710	)
Net cash provided by operating activities		469,202			752,907
Investing activities
Purchases of property and equipment and intangible assets		(28,984	)		(9,031	)
Purchases of marketable securities		(1,028,480	)		(1,104,087	)
Sales of marketable securities		7,417			274,654
Maturities of marketable securities		1,007,861			849,520
Acquisition of business, net of cash acquired		(86,059	)		(36,914	)
Net cash used in investing activities		(128,245	)		(25,858	)
Financing activities
Proceeds from exercise of stock options, net		12,882			23,912
Shares repurchased for tax withholdings on release of restricted stock units and restricted stock awards		(161,809	)		—
Payment of deferred offering costs and other financing activities		—			(1,750	)
Net cash (used in) provided by financing activities		(148,927	)		22,162
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(1,434	)		(1,058	)
Net increase in cash, cash equivalents and restricted cash		190,596			748,153
Cash, cash equivalents and restricted cash, beginning of period		1,427,064			678,911
Cash, cash equivalents and restricted cash, end of period	$	1,617,660		$	1,427,064
Supplemental cash flow information
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	31,515		$	118,977


Reconciliation of cash, cash equivalents and restricted cash to condensed consolidated balance sheets
Cash and cash equivalents	$	1,611,063		$	1,419,630
Restricted cash included in prepaid expenses and other current assets		1,067			1,137
Restricted cash included in other assets		5,530			6,297
Total cash, cash equivalents and restricted cash	$	1,617,660		$	1,427,064

PINTEREST, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS
(in thousands)
(unaudited)

	Three Months Ended December 31,						Year Ended December 31,
	2022			2021			2022			2021
Share-based compensation by function:
Cost of revenue	$	2,829		$	1,931		$	7,629		$	7,438
Research and development		100,166			115,048			324,161			309,715
Sales and marketing		45,903			13,400			99,467			52,691
General and administrative		21,414			9,021			65,866			45,538
Total share-based compensation	$	170,312		$	139,400		$	497,123		$	415,382

Amortization of acquired intangible assets by function:
Cost of revenue	$	4,974		$	296		$	8,583		$	579
Sales and marketing		10,135			45			15,540			45
General and administrative		197			197			789			711
Total amortization of acquired intangible assets	$	15,306		$	538		$	24,912		$	1,335

Reconciliation of total costs and expenses to non-GAAP costs and expenses:
Total costs and expenses	$	871,341		$	667,207		$	2,904,251		$	2,251,840
Share-based compensation		(170,312	)		(139,400	)		(497,123	)		(415,382	)
Amortization of acquired intangible assets		(15,306	)		(538	)		(24,912	)		(1,335	)
Non-cash charitable contributions		—			(24,810	)		—			(45,300	)
Total non-GAAP costs and expenses	$	685,723		$	502,459		$	2,382,216		$	1,789,823

Reconciliation of net income (loss) to Adjusted EBITDA:
Net income (loss)	$	17,491		$	174,699		$	(96,047	)	$	316,438
Depreciation and amortization		19,605			7,201			46,489			27,500
Share-based compensation		170,312			139,400			497,123			415,382
Interest income		(17,172	)		(822	)		(30,943	)		(4,204	)
Interest expense and other (income) expense, net		(5,734	)		3,429			15,210			9,420
Provision for income taxes		11,283			2,142			10,103			4,533
Non-cash charitable contributions		—			24,810			—			45,300
Adjusted EBITDA	$	195,785		$	350,859		$	441,935		$	814,369

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,
	2022		2021		2022			2021
Reconciliation of net income (loss) to non-GAAP net income:
Net income (loss)	$	17,491	$	174,699	$	(96,047	)	$	316,438
Share-based compensation		170,312		139,400		497,123			415,382
Amortization of acquired intangible assets		15,306		538		24,912			1,335
Non-cash charitable contributions		—		24,810		—			45,300
Non-GAAP net income	$	203,109	$	339,447	$	425,988		$	778,455

Basic weighted-average shares used in computing net income per share attributable to common stockholders		674,385		651,077		665,732			640,030
Weighted-average dilutive securities⁽¹⁾		22,547		39,090		25,200			51,621
Diluted weighted-average shares used in computing non-GAAP net income per share attributable to common stockholders		696,932		690,167		690,932			691,651
Non-GAAP net income per share attributable to common stockholders	$	0.29	$	0.49	$	0.62		$	1.13
____________________
⁽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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