pins-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_________________

FORM 10-Q

_________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from to

Commission file number 001-38872

Pinterest, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware			26-3607129
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

651 Brannan Street
San Francisco, California			94107
(Address of Principal Executive Offices, including zip code)			(Zip Code)

(415) 762-7100

Registrant’s Telephone Number, Including Area Code

_______________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, $0.00001 par value	PINS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 24, 2024, there were 599,347,750 shares of the Registrant’s Class A common stock, $.00001 par value per share, outstanding, and 83,822,143 shares of the Registrant’s Class B common stock outstanding.

PINTEREST, INC.

TABLE OF CONTENTS


		Page
Note About Forward-Looking Statements and Summary Risk Factors		3
Limitations of Key Metrics and Other Data		7
Part I - Financial Information
Item 1.	Financial Statements (Unaudited)	8
	Condensed Consolidated Balance Sheets	8
	Condensed Consolidated Statements of Operations	9
	Condensed Consolidated Statements of Comprehensive Loss	10
	Condensed Consolidated Statements of Stockholders' Equity	11
	Condensed Consolidated Statements of Cash Flows	12
	Notes to Condensed Consolidated Financial Statements	13
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	32
Item 4.	Controls and Procedures	33
Part II - Other Information
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	64
Item 5.	Other Information	65
Item 6.	Exhibits	66
	Signatures	67

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which statements involve substantial risk 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 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 statements are based on our historical performance and on our current plans, estimates and projections in light of information currently available to us, and therefore you should not place undue reliance on them. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Forward-looking statements made in this Quarterly Report on Form 10-Q speak only as of the date on which such statements are made, and we undertake no obligation to update them in light of new information or future events, except as required by law.

You should carefully consider the above factors, as well as the factors discussed elsewhere in this Quarterly Report on Form 10-Q. The factors identified above should not be construed as an exhaustive list of factors that could affect our future results and should be read in conjunction with the other cautionary statements that are included in this Quarterly Report. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us. If any of these trends, risks or uncertainties actually occurs or continues, our business, revenue and financial results could be harmed, the trading price of our Class A common stock could decline and you could lose all or part of your investment.

Unless expressly indicated or the context requires otherwise, the terms "Pinterest," "company," "we," "us," and "our" in this document refer to Pinterest, Inc., a Delaware corporation, and, where appropriate, its wholly owned subsidiaries. The term "Pinterest" may also refer to our products, regardless of the manner in which they are accessed. For references to accessing Pinterest on the "web" or via a "website," such terms refer to accessing Pinterest on personal computers. For references to accessing Pinterest on "mobile," such term refers to accessing Pinterest via a mobile application or via a mobile-optimized version of our website such as m.pinterest.com, whether on a mobile phone or tablet.

Summary of Risk Factors

The following summarizes the principal factors that make an investment in our company speculative or risky, all of which are more fully described in the Risk Factors section below. This summary should be read in conjunction with the Risk Factors section and should not be relied upon as an exhaustive summary of the material risks facing our business. The following factors could result in harm to our business, reputation, revenue, financial results, and prospects, among other impacts:

Business Strategy and Growth. Our strategic decisions and efforts to expand the business, including:

•our ability to scale our business for future growth;

•our ability to attract, grow, retain, recover and engage our user base;

•our dependence on advertising for substantially all of our revenue;

•providing content that is useful and relevant to users’ personal taste and interests;

•decisions consistent with our mission and values that may reduce our short- or medium-term operating results;

•removing objectionable content or blocking objectionable practices by advertisers or third parties;

•our ability to compete effectively for users, creators, publishers or advertisers;

•our ability to develop effective products and tools for advertisers;

•our further expansion and monetization of our platform internationally;

•effective management of our business growth;

•our acquisition of other businesses;

•our development of or investment in successful new products or improvements to existing one;

•our dependence on and ability to maintain and enhance a strong brand and reputation; and

•the attraction, retention, and loss of our key personnel and other highly qualified personnel.

Data, Security and Privacy.

•actual or perceived compromises in our security;

•the data, including personal information, we receive, process, store, use, and share, which subjects us to complex and evolving governmental regulation and other legal obligations related to data privacy, data protection and other matters; and

•the development of tools to accurately measure the effectiveness of advertisements on our platform and thereby attract and maintain advertisers.

Operation of Our Business. The manner in which we operate our business, including:

•the inherent challenges of measurements related to user metrics and other estimates; and

•our ability to maintain and scale our technology infrastructure, including the speed and availability of our service.

Third-Party Reliance. Our use and dependence on third-party businesses and products, or the impacts of third-party business and products, including:

•our dependence on online application stores and internet search engines, including their methodologies, policies, and results, to direct traffic and refer new users to our service;

•users’ ability to authenticate with our service through third-party login providers;

•our dependence on Amazon Web Services for the vast majority of our compute, storage, data transfer, and other services;

•effectively operating with mobile operating systems, web browsers, networks, regulations, and standards, which we do not control, and changes in our products or to those mobile operating systems, web browsers, networks, regulations or standards;

•our reliance on software, technologies, and related services from other parties; and

•technologies that can block the display of our ads.

Legal and Regulatory Matters. The legal and regulatory frameworks, actions, and requirements to which our business, products, services, and operations are subject, including:

•any liability as a result of content or information that is published or made available on our service;

•government action to restrict access to our service or certain of our products in their countries;

•our involvement in any legal disputes or other disputes that are expensive to support and may be resolved adversely;

•an ability to protect our intellectual property and our use of “open source” software; and

•the interpretation and application of U.S. and non-U.S. tax legislation or other changes in U.S. or non-U.S. taxation of our operations.

Financial Statements and Performance. The preparation of our financial statements and our financial and operating performance, including:

•our limited operating history and previously incurred operating losses, anticipated increases to operating costs, and expenses and our ability to obtain or maintain profitability;

•fluctuations in our operating results from quarter to quarter;

•our ability to obtain additional financing, if needed and any default on our credit obligations;

•greater than anticipated tax liabilities;

•limitations in our ability to use or benefit from our net operating loss carryforwards and certain other tax attributes;

•the requirements of being a public company;

•adverse global economic and financial conditions; and

•changes in accounting principles generally accepted in the United States.

Our Common Stock. The rights, restrictions, and structure of, and actions that we may take that impact our common stock, including:

•the dual class structure of our common stock;

•trading price volatility of our Class A common stock;

•future offerings of debt or equity securities by us or existing stockholders that could adversely impact the market price of our Class A common stock;

•additional stock issuances, including in connection with settlement of equity awards, and any resulting dilution;

•provisions under Delaware law and our governing documents that could make a merger, tender offer, or proxy contest difficult;

•our certificate of incorporation’s designation of a state or federal court located within Delaware as the exclusive forum for substantially all disputes between us and our stockholders; and

•our intention not to pay dividends for the foreseeable future.

LIMITATIONS OF KEY METRICS AND OTHER DATA

The numbers for our key metrics, which include our monthly active users ("MAUs") and average revenue per user ("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.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

PINTEREST, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

(Unaudited)


	March 31,		December 31,
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,632,149	$	1,361,936
Marketable securities	1,144,260		1,149,148
Accounts receivable, net of allowances of $9,001 and $10,635 as of March 31, 2024 and December 31, 2023, respectively	563,865		763,159
Prepaid expenses and other current assets	73,497		64,316
Total current assets	3,413,771		3,338,559
Property and equipment, net	38,160		32,225
Operating lease right-of-use assets	85,069		92,119
Goodwill and intangible assets, net	115,622		117,462
Other assets	14,097		14,040

Total assets	$	3,666,719	$	3,594,405
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	83,654	$	79,058
Accrued expenses and other current liabilities	256,229		238,032
Total current liabilities	339,883		317,090
Operating lease liabilities	154,340		160,616
Other liabilities	28,654		26,019
Total liabilities	522,877		503,725

Commitments and contingencies



Stockholders’ equity:

Class A common stock, $0.00001 par value, 6,666,667 shares authorized, 598,867 and 591,663 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively; Class B common stock, $0.00001 par value, 1,333,333 shares authorized, 83,714 and 86,355 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	7		7
Additional paid-in capital	5,321,530		5,241,954

Accumulated other comprehensive loss	(2,615)		(1,013)
Accumulated deficit	(2,175,080)		(2,150,268)
Total stockholders’ equity	3,143,842		3,090,680
Total liabilities and stockholders’ equity	$	3,666,719	$	3,594,405

The accompanying notes are an integral part of these condensed consolidated financial statements.

PINTEREST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)



	Three Months Ended March 31,
	2024		2023
Revenue	$	739,983	$	602,581
Costs and expenses:
Cost of revenue	181,091		170,926
Research and development	280,275		266,346
Sales and marketing	226,289		201,131
General and administrative	106,744		207,864
Total costs and expenses	794,399		846,267
Loss from operations	(54,416)		(243,686)
Interest income (expense), net	31,266		24,901
Other income (expense), net	(4,526)		322
Loss before benefit from income taxes	(27,676)		(218,463)
Benefit from income taxes	(2,864)		(9,884)
Net loss	$	(24,812)	$	(208,579)

Net loss per share, basic and diluted	$	(0.04)	$	(0.31)


Weighted-average shares used in computing net loss per share, basic and diluted	678,819		681,140

The accompanying notes are an integral part of these condensed consolidated financial statements.

PINTEREST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)



	Three Months Ended March 31,
	2024		2023
Net loss	$	(24,812)	$	(208,579)
Other comprehensive income (loss), net of taxes:
Change in unrealized gain (loss) on available-for-sale marketable securities	(1,421)		3,956
Change in foreign currency translation adjustment	(181)		331
Comprehensive loss	$	(26,414)	$	(204,292)

The accompanying notes are an integral part of these condensed consolidated financial statements.

PINTEREST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

(Unaudited)


		Three Months Ended March 31, 2024

	Class A and Class B Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Stockholders’ Equity
		Shares									Amount
Balance as of December 31, 2023		678,018	$	7	$	5,241,954	$	(1,013)	$	(2,150,268)		$	3,090,680
Release of restricted stock units and issuance of restricted stock awards, net		3,179	—		—		—		—			—
Shares repurchased for tax withholdings on release of restricted stock units and restricted stock awards		—	—		(99,708)		—		—			(99,708)





Issuance of common stock for cash upon exercise of stock options, net		1,384	—		16,811		—		—			16,811




Share-based compensation		—	—		162,473		—		—			162,473
Other comprehensive loss		—	—		—		(1,602)		—			(1,602)
Net loss		—	—		—		—		(24,812)			(24,812)
Balance as of March 31, 2024		682,581	$	7	$	5,321,530	$	(2,615)	$	(2,175,080)		$	3,143,842


		Three Months Ended March 31, 2023

	Class A and Class B Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Stockholders’ Equity
		Shares									Amount
Balance as of December 31, 2022		683,202	$	7	$	5,407,724	$	(11,419)	$	(2,114,658)		$	3,281,654
Release of restricted stock units and issuance of restricted stock awards, net		2,775	—		—		—		—			—






Shares repurchased for tax withholdings on release of restricted stock units and restricted stock awards		—	—		(91,508)		—		—			(91,508)
Issuance of common stock for cash upon exercise of stock options, net		950	—		2,400		—		—			2,400

SEC Form 10-Q filed by Pinterest Inc.