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Pinterest (PINS) Tops Q4 Earnings Estimates on Revenue Growth
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Pinterest Inc. (PINS - Free Report) reported healthy fourth-quarter 2021 results with a year-over-year increase in revenues driven by strong demand from retail advertisers. Both the bottom line and the top line surpassed the respective Zacks Consensus Estimate, backed by the strength of the business model and the ability to respond proactively to the evolving market scenario with engaging customer content.
Quarter Details
The company reported GAAP net income of $174.7 million or 25 cents per share compared with $207.8 million or 30 cents per share in the year-earlier quarter. The decline despite top-line growth was primarily led by high operating expenses.
Non-GAAP net income in the reported quarter was $339.4 million or 49 cents per share compared with $294.3 million or 43 cents per share in the year-ago quarter and exceeded the Zacks Consensus Estimate by 4 cents.
In 2021, GAAP net income was $316.4 million or 46 cents per share against a net loss of $128.3 million or a loss of 22 cents per share in 2020. The year-over-year improvement was largely led by higher revenues driven by ad product improvements and expansion in international markets. Non-GAAP net income for 2021 was $778.5 million or $1.13 per share compared with $283.2 million or 42 cents per share in 2020.
Revenues in fourth-quarter 2021 soared 20% year over year to $846.7 million and beat the consensus estimate of $831 million. The top-line growth was driven by solid demand from retail advertisers, partially offset by muted demand from Consumer Packaged Goods advertisers owing to supply chain headwinds. While revenues from the United States increased 11.3% year over year to $648 million, International revenues soared 61.8% to $199 million. In 2021, revenues improved to $2,578 million from $1,692.7 million in 2020, driven by higher ads and expansion in international markets.
User Base
Monthly active users (MAUs) declined 6% from the prior-year quarter to 431 million globally as the unwinding of pandemic restrictions led to lower customer engagements as users spent more time outside. In addition, lower search traffic triggered by an algorithm change by Google in November and higher competition from other video-centric consumer apps led to lower customer engagements. While United States MAUs decreased 12.2% to 86 million, International MAUs were down 4.2% from the year-ago quarter to 346 million.
Global average revenue per user (ARPU) increased 22.9% from a year ago to $1.93. While ARPU in the United States increased 25.1% to $7.43, International ARPU surged 62.9% to 57 cents.
Operating Details
Pinterest’s fourth-quarter 2021 operating costs increased 33.3% year over year to $667.2 million due to higher brand marketing campaigns and headcount increase. In the reported quarter, research and development expenses increased 47% from the prior-year period to $241 million. Sales and marketing expenses surged 58% to $91 million.
Adjusted EBITDA (41% of total revenues) was $350.9 million in fourth-quarter 2021, up from $299.2 million (42% of total revenues). The company launched more than 50 new features during the quarter that helped grow native content, including Idea Pin publishing tools, new surfaces for creator discovery, engagement features and safety improvements. It created a unique space for users to engage with video on the Watch Tab platform. Pinterest TV has also evolved as a unique space by blending creator recommendations and online shopping experiences.
Balance Sheet
The company ended Dec 31, 2021, with cash, cash equivalents of $1,419.6 million compared with $669.2 million in the prior-year period. Cash flow at year-end 2021 was $752.9 million compared with $28.8 million in the year-ago period.
Guidance
Pinterest expects first-quarter revenues grow in the high teens percentage range year over year. Non-GAAP operating expenses are expected to grow about 10% sequentially. In 2022, non-GAAP operating expenses are likely to grow around 40% year over year, driven by increased investments in the native content ecosystem and higher headcount.
TWOU delivered an earnings surprise of 36.6%, on average, in the trailing four quarters. It has long-term earnings growth expectation of 25%.
Bill.com Holdings, Inc. (BILL - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 17.3%.
BILL delivered an earnings surprise of 40.9%, on average, in the trailing four quarters. Over the past year, it has gained 21.8%.
Datto Holding Corp. carries a Zacks Rank #2. It has a long-term earnings growth expectation of 6.1%.
Earnings estimates for the current year for the stock have moved up 20.8% since February 2021, while that for the next year is up 13.2%. MSP delivered an earnings surprise of 34.6%, on average, in the trailing four quarters.
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Pinterest (PINS) Tops Q4 Earnings Estimates on Revenue Growth
Pinterest Inc. (PINS - Free Report) reported healthy fourth-quarter 2021 results with a year-over-year increase in revenues driven by strong demand from retail advertisers. Both the bottom line and the top line surpassed the respective Zacks Consensus Estimate, backed by the strength of the business model and the ability to respond proactively to the evolving market scenario with engaging customer content.
Quarter Details
The company reported GAAP net income of $174.7 million or 25 cents per share compared with $207.8 million or 30 cents per share in the year-earlier quarter. The decline despite top-line growth was primarily led by high operating expenses.
Non-GAAP net income in the reported quarter was $339.4 million or 49 cents per share compared with $294.3 million or 43 cents per share in the year-ago quarter and exceeded the Zacks Consensus Estimate by 4 cents.
Pinterest, Inc. Price, Consensus and EPS Surprise
Pinterest, Inc. price-consensus-eps-surprise-chart | Pinterest, Inc. Quote
In 2021, GAAP net income was $316.4 million or 46 cents per share against a net loss of $128.3 million or a loss of 22 cents per share in 2020. The year-over-year improvement was largely led by higher revenues driven by ad product improvements and expansion in international markets. Non-GAAP net income for 2021 was $778.5 million or $1.13 per share compared with $283.2 million or 42 cents per share in 2020.
Revenues in fourth-quarter 2021 soared 20% year over year to $846.7 million and beat the consensus estimate of $831 million. The top-line growth was driven by solid demand from retail advertisers, partially offset by muted demand from Consumer Packaged Goods advertisers owing to supply chain headwinds. While revenues from the United States increased 11.3% year over year to $648 million, International revenues soared 61.8% to $199 million. In 2021, revenues improved to $2,578 million from $1,692.7 million in 2020, driven by higher ads and expansion in international markets.
User Base
Monthly active users (MAUs) declined 6% from the prior-year quarter to 431 million globally as the unwinding of pandemic restrictions led to lower customer engagements as users spent more time outside. In addition, lower search traffic triggered by an algorithm change by Google in November and higher competition from other video-centric consumer apps led to lower customer engagements. While United States MAUs decreased 12.2% to 86 million, International MAUs were down 4.2% from the year-ago quarter to 346 million.
Global average revenue per user (ARPU) increased 22.9% from a year ago to $1.93. While ARPU in the United States increased 25.1% to $7.43, International ARPU surged 62.9% to 57 cents.
Operating Details
Pinterest’s fourth-quarter 2021 operating costs increased 33.3% year over year to $667.2 million due to higher brand marketing campaigns and headcount increase. In the reported quarter, research and development expenses increased 47% from the prior-year period to $241 million. Sales and marketing expenses surged 58% to $91 million.
Adjusted EBITDA (41% of total revenues) was $350.9 million in fourth-quarter 2021, up from $299.2 million (42% of total revenues). The company launched more than 50 new features during the quarter that helped grow native content, including Idea Pin publishing tools, new surfaces for creator discovery, engagement features and safety improvements. It created a unique space for users to engage with video on the Watch Tab platform. Pinterest TV has also evolved as a unique space by blending creator recommendations and online shopping experiences.
Balance Sheet
The company ended Dec 31, 2021, with cash, cash equivalents of $1,419.6 million compared with $669.2 million in the prior-year period. Cash flow at year-end 2021 was $752.9 million compared with $28.8 million in the year-ago period.
Guidance
Pinterest expects first-quarter revenues grow in the high teens percentage range year over year. Non-GAAP operating expenses are expected to grow about 10% sequentially. In 2022, non-GAAP operating expenses are likely to grow around 40% year over year, driven by increased investments in the native content ecosystem and higher headcount.
Zacks Rank & Stocks to Consider
Pinterest currently has a Zacks Rank #3 (Hold).
2U, Inc. (TWOU - Free Report) , carrying a Zacks Rank #2 (Buy) is a solid pick for investors. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TWOU delivered an earnings surprise of 36.6%, on average, in the trailing four quarters. It has long-term earnings growth expectation of 25%.
Bill.com Holdings, Inc. (BILL - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 17.3%.
BILL delivered an earnings surprise of 40.9%, on average, in the trailing four quarters. Over the past year, it has gained 21.8%.
Datto Holding Corp. carries a Zacks Rank #2. It has a long-term earnings growth expectation of 6.1%.
Earnings estimates for the current year for the stock have moved up 20.8% since February 2021, while that for the next year is up 13.2%. MSP delivered an earnings surprise of 34.6%, on average, in the trailing four quarters.