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Pinterest (PINS) Beats Q3 Earnings and Revenue Estimates
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Pinterest Inc. (PINS - Free Report) reported healthy third-quarter 2022 results with a year-over-year increase in revenues driven by strong demand from joint businesses. Both the bottom line and top line beat the respective Zacks Consensus Estimate.
Quarter Details
The company reported a GAAP net loss of $65.2 million or a loss of 10 cents per share against a net income of $94 million or 14 cents per share in the year-ago quarter. Despite top-line growth, the significant decline in GAAP earnings was largely attributable to higher operating expenses.
Non-GAAP net income in the reported quarter was $76.5 million or 11 cents per share compared with $190.5 million or 28 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 6 cents.
Revenues in third-quarter 2022 rose 8.2% year over year to $684.6 million and beat the consensus estimate of $665 million. The top-line growth was driven by a solid performance from the United States and Canada, with revenues increasing 9% year over year to $575 million, and the Rest of the World (up 36% to $24 million), partially offset by lower revenues from Europe (down 4% to $86 million).
Monthly active users (MAUs) remained relatively flat at 445 million globally as the unwinding of pandemic restrictions led to lower customer engagements on desktop and web 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 engagement. However, the mobile app MAU offset the decline for an overall flat trajectory. While the United States and Canada's MAUs decreased 2% to 95 million, Europe and the Rest of the World's MAUs were up 1% each from the year-ago quarter to 120 million and 230 million.
The global average revenue per user (ARPU) increased 11% from a year ago to $1.56, buoyed by solid advertising demand. While ARPU in the United States and Canada increased 15% to $6.13, the Rest of the World’s ARPU surged 38% to 11 cents.
Operating Details
Pinterest’s third-quarter operating costs increased 41% year over year to $753.9 million due to higher brand marketing campaigns and a headcount increase. In the reported quarter, research and development expenses soared 37% to $254.7 million. Sales and marketing expenses surged 47.3% to $229.9 million.
Adjusted EBITDA was $77.3 million in third-quarter 2022, down from $201.5 million. 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 Sep 30, 2022, Pinterest had cash and cash equivalents of $1,671.3 million, with $183.2 million of operating lease liabilities. The company generated $410.9 million of cash from operations in the first nine months of 2022 compared with $541.1 million in the prior-year period.
Guidance
Pinterest expects fourth-quarter revenues to grow in mid-single digits on a year-over-year basis. Non-GAAP operating expenses are expected to rise in low double digits percent sequentially. For 2022, non-GAAP operating expenses are likely to increase 35% year over year due to inflation and supply chain issues faced by many advertising partners.
TESSCO Technologies Incorporated , carrying a Zacks Rank #2, delivered an earnings surprise of 81.7%, on average, in the trailing four quarters. Earnings estimates for TESSCO for the current year have moved up 34.4% since October 2021.
TESSCO offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With more than three decades of experience, it delivers complete end-to-end solutions to the wireless industry.
Ooma Inc. (OOMA - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 28.6%, on average, in the trailing four quarters. Earnings estimates for TESSCO for the current year have moved up 27% since April 2021.
Ooma offers communications services and related technologies for businesses and consumers in the United States and Canada. It helps to create powerful connected experiences for businesses and consumers through its smart cloud-based SaaS platform.
Harmonic Inc. (HLIT - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 79.3%, on average, in the trailing four quarters. Earnings estimates for Harmonic for the current year have moved up 37.1% since March 2021.
Harmonic provides video delivery software, products, system solutions, and services worldwide. With more than three decades of experience, it has revolutionized cable access networking via the industry's first virtualized cable access solution, enabling cable operators to more flexibly deploy gigabit internet service to consumers' homes and mobile devices.
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Pinterest (PINS) Beats Q3 Earnings and Revenue Estimates
Pinterest Inc. (PINS - Free Report) reported healthy third-quarter 2022 results with a year-over-year increase in revenues driven by strong demand from joint businesses. Both the bottom line and top line beat the respective Zacks Consensus Estimate.
Quarter Details
The company reported a GAAP net loss of $65.2 million or a loss of 10 cents per share against a net income of $94 million or 14 cents per share in the year-ago quarter. Despite top-line growth, the significant decline in GAAP earnings was largely attributable to higher operating expenses.
Non-GAAP net income in the reported quarter was $76.5 million or 11 cents per share compared with $190.5 million or 28 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 6 cents.
Revenues in third-quarter 2022 rose 8.2% year over year to $684.6 million and beat the consensus estimate of $665 million. The top-line growth was driven by a solid performance from the United States and Canada, with revenues increasing 9% year over year to $575 million, and the Rest of the World (up 36% to $24 million), partially offset by lower revenues from Europe (down 4% to $86 million).
Pinterest, Inc. Price, Consensus and EPS Surprise
Pinterest, Inc. price-consensus-eps-surprise-chart | Pinterest, Inc. Quote
User Base
Monthly active users (MAUs) remained relatively flat at 445 million globally as the unwinding of pandemic restrictions led to lower customer engagements on desktop and web 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 engagement. However, the mobile app MAU offset the decline for an overall flat trajectory. While the United States and Canada's MAUs decreased 2% to 95 million, Europe and the Rest of the World's MAUs were up 1% each from the year-ago quarter to 120 million and 230 million.
The global average revenue per user (ARPU) increased 11% from a year ago to $1.56, buoyed by solid advertising demand. While ARPU in the United States and Canada increased 15% to $6.13, the Rest of the World’s ARPU surged 38% to 11 cents.
Operating Details
Pinterest’s third-quarter operating costs increased 41% year over year to $753.9 million due to higher brand marketing campaigns and a headcount increase. In the reported quarter, research and development expenses soared 37% to $254.7 million. Sales and marketing expenses surged 47.3% to $229.9 million.
Adjusted EBITDA was $77.3 million in third-quarter 2022, down from $201.5 million. 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 Sep 30, 2022, Pinterest had cash and cash equivalents of $1,671.3 million, with $183.2 million of operating lease liabilities. The company generated $410.9 million of cash from operations in the first nine months of 2022 compared with $541.1 million in the prior-year period.
Guidance
Pinterest expects fourth-quarter revenues to grow in mid-single digits on a year-over-year basis. Non-GAAP operating expenses are expected to rise in low double digits percent sequentially. For 2022, non-GAAP operating expenses are likely to increase 35% year over year due to inflation and supply chain issues faced by many advertising partners.
Zacks Rank & Other Stocks to Consider
Pinterest currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TESSCO Technologies Incorporated , carrying a Zacks Rank #2, delivered an earnings surprise of 81.7%, on average, in the trailing four quarters. Earnings estimates for TESSCO for the current year have moved up 34.4% since October 2021.
TESSCO offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With more than three decades of experience, it delivers complete end-to-end solutions to the wireless industry.
Ooma Inc. (OOMA - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 28.6%, on average, in the trailing four quarters. Earnings estimates for TESSCO for the current year have moved up 27% since April 2021.
Ooma offers communications services and related technologies for businesses and consumers in the United States and Canada. It helps to create powerful connected experiences for businesses and consumers through its smart cloud-based SaaS platform.
Harmonic Inc. (HLIT - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 79.3%, on average, in the trailing four quarters. Earnings estimates for Harmonic for the current year have moved up 37.1% since March 2021.
Harmonic provides video delivery software, products, system solutions, and services worldwide. With more than three decades of experience, it has revolutionized cable access networking via the industry's first virtualized cable access solution, enabling cable operators to more flexibly deploy gigabit internet service to consumers' homes and mobile devices.