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Pinterest (PINS) Q2 Earnings Miss Estimates, Revenues Beat
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Pinterest Inc. (PINS - Free Report) reported mixed second-quarter 2022 results with a year-over-year increase in revenues driven by strong demand from joint businesses. The bottom line missed the Zacks Consensus Estimate but the top line beat the same.
Quarter Details
The company reported a GAAP net loss of $43.1 million or a loss of 7 cents per share against a net income of $69.4 million or 10 cents per share in the year-ago quarter.
Non-GAAP net income in the reported quarter was $77.4 million or 11 cents per share compared with $169.9 million or 25 cents per share in the year-ago quarter. The figure missed the Zacks Consensus Estimate by 6 cents.
Revenues in second-quarter 2022 rose 8.6% year over year to $665.9 million and beat the consensus estimate of $660 million. The top-line growth was driven by 25% rise in spend commitments from joint businesses. While revenues from the United States and Canada increased 7% year over year to $542 million, that from Europe and the Rest of the World soared 10% and 71%, respectively, to $102 million and $22 million.
Monthly active users (MAUs) declined 5% from the prior-year quarter to 433 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 the United States and Canada's MAUs decreased 8% to 92 million, Europe and the Rest of the World's MAUs were down 4% and 3%, respectively, from the year-ago quarter to 117 million and 223 million.
Global average revenue per user (ARPU) increased 17% from a year ago to $1.54 buoyed by solid advertising demand. While ARPU in the United States and Canada increased 20% to $5.82, Europe and the Rest of the World’s ARPU surged 20% and 80%, respectively, to 86 cents and 10 cents.
Operating Details
Pinterest’s second-quarter 2022 operating costs increased 29.2% year over year to $700.4 million due to higher brand marketing campaigns and headcount increase. In the reported quarter, research and development expenses increased 28.5% to $233.5 million. Sales and marketing expenses surged 29% to $212 million.
Adjusted EBITDA (14% of total revenues) was $92 million in second-quarter 2022, down from $178.2 million (29% of total revenues). The company has made key hires to augment the organization that it believes will drive growth in the long term. It also caught up with some original plans for creator-led marketing.
Balance Sheet
As of Jun 30, 2022, Pinterest had cash and cash equivalents of $1,641.5 million, with $192.5 million of operating lease liabilities. The company generated $333.5 million of cash from operations in the first six months of 2022 compared with $375.4 million in the prior-year period.
Guidance
Pinterest expects third-quarter revenues to grow mid-single digits on a year-over-year basis. Non-GAAP operating expenses are expected to grow low double digits percent sequentially. For 2022, non-GAAP operating expenses are likely to increase 35-40% year over year because of inflation and supply chain issues faced by many advertising partners.
United States Cellular Corporation (USM - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 23.1%, on average, in the trailing four quarters. Over the past year, the stock has fallen 10%.
Earnings estimates for the current year have moved down 44.4% since August 2021. United States Cellular’s primary strategy is to provide a range of wireless products and services, and a high-quality network to increase competitiveness.
New Fortress Energy Inc. (NFE - Free Report) , sporting a Zacks Rank #1, is another key pick for investors. It delivered an earnings surprise of 73.9% in the previous quarter and a stellar earnings surprise of 57.6%, on average, in the trailing four quarters. The company operates as an integrated gas-to-power infrastructure company that provides energy and development services to end-users worldwide.
Earnings estimates for the current year have moved up 95.6% since August 2021.
Lumen Technologies, Inc. (LUMN - Free Report) sports a Zacks Rank #1. The Zacks Consensus Estimate for Lumen Technologies current-year earnings has been revised 39.8% upward since August 2021.
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Pinterest (PINS) Q2 Earnings Miss Estimates, Revenues Beat
Pinterest Inc. (PINS - Free Report) reported mixed second-quarter 2022 results with a year-over-year increase in revenues driven by strong demand from joint businesses. The bottom line missed the Zacks Consensus Estimate but the top line beat the same.
Quarter Details
The company reported a GAAP net loss of $43.1 million or a loss of 7 cents per share against a net income of $69.4 million or 10 cents per share in the year-ago quarter.
Non-GAAP net income in the reported quarter was $77.4 million or 11 cents per share compared with $169.9 million or 25 cents per share in the year-ago quarter. The figure missed the Zacks Consensus Estimate by 6 cents.
Revenues in second-quarter 2022 rose 8.6% year over year to $665.9 million and beat the consensus estimate of $660 million. The top-line growth was driven by 25% rise in spend commitments from joint businesses. While revenues from the United States and Canada increased 7% year over year to $542 million, that from Europe and the Rest of the World soared 10% and 71%, respectively, to $102 million and $22 million.
Pinterest, Inc. Price, Consensus and EPS Surprise
Pinterest, Inc. price-consensus-eps-surprise-chart | Pinterest, Inc. Quote
User Base
Monthly active users (MAUs) declined 5% from the prior-year quarter to 433 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 the United States and Canada's MAUs decreased 8% to 92 million, Europe and the Rest of the World's MAUs were down 4% and 3%, respectively, from the year-ago quarter to 117 million and 223 million.
Global average revenue per user (ARPU) increased 17% from a year ago to $1.54 buoyed by solid advertising demand. While ARPU in the United States and Canada increased 20% to $5.82, Europe and the Rest of the World’s ARPU surged 20% and 80%, respectively, to 86 cents and 10 cents.
Operating Details
Pinterest’s second-quarter 2022 operating costs increased 29.2% year over year to $700.4 million due to higher brand marketing campaigns and headcount increase. In the reported quarter, research and development expenses increased 28.5% to $233.5 million. Sales and marketing expenses surged 29% to $212 million.
Adjusted EBITDA (14% of total revenues) was $92 million in second-quarter 2022, down from $178.2 million (29% of total revenues). The company has made key hires to augment the organization that it believes will drive growth in the long term. It also caught up with some original plans for creator-led marketing.
Balance Sheet
As of Jun 30, 2022, Pinterest had cash and cash equivalents of $1,641.5 million, with $192.5 million of operating lease liabilities. The company generated $333.5 million of cash from operations in the first six months of 2022 compared with $375.4 million in the prior-year period.
Guidance
Pinterest expects third-quarter revenues to grow mid-single digits on a year-over-year basis. Non-GAAP operating expenses are expected to grow low double digits percent sequentially. For 2022, non-GAAP operating expenses are likely to increase 35-40% year over year because of inflation and supply chain issues faced by many advertising partners.
Zacks Rank & Stocks to Consider
Pinterest currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
United States Cellular Corporation (USM - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 23.1%, on average, in the trailing four quarters. Over the past year, the stock has fallen 10%.
Earnings estimates for the current year have moved down 44.4% since August 2021. United States Cellular’s primary strategy is to provide a range of wireless products and services, and a high-quality network to increase competitiveness.
New Fortress Energy Inc. (NFE - Free Report) , sporting a Zacks Rank #1, is another key pick for investors. It delivered an earnings surprise of 73.9% in the previous quarter and a stellar earnings surprise of 57.6%, on average, in the trailing four quarters. The company operates as an integrated gas-to-power infrastructure company that provides energy and development services to end-users worldwide.
Earnings estimates for the current year have moved up 95.6% since August 2021.
Lumen Technologies, Inc. (LUMN - Free Report) sports a Zacks Rank #1. The Zacks Consensus Estimate for Lumen Technologies current-year earnings has been revised 39.8% upward since August 2021.