Pinterest Inc.
PINS
reported healthy first-quarter 2022 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 loss of $5.3 million or a loss of 1 cent per share compared with a loss of $21.7 million or a loss of 3 cents per share in the year-ago quarter. The year-over-year improvement, despite higher operating expenses, was primarily attributable to top-line growth.
Non-GAAP net income in the reported quarter was $69 million or 10 cents per share compared with $78.5 million or 11 cents per share in the year-ago quarter. The figure exceeded the Zacks Consensus Estimate by 6 cents.
Pinterest, Inc. Price, Consensus and EPS Surprise
Pinterest, Inc. price-consensus-eps-surprise-chart
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Pinterest, Inc. Quote
Revenues in first-quarter 2022 soared 18% year over year to $574.9 million and beat the consensus estimate of $568 million. The top-line growth was driven by solid demand from retail advertisers, healthy international businesses and SMB advertisers, partially offset by muted demand from Consumer Packaged Goods advertisers owing to supply chain headwinds. While revenues from the United States and Canada increased 15% year over year to $470 million, that from Europe and Rest of the World soared 27% and 152%, respectively, to $87 million and $17 million.
User Base
Monthly active users (MAUs) declined 9% 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 13% to 94 million, Europe and the Rest of the World’s MAUs were down 12% and 6%, respectively, from the year-ago quarter to 120 million and 220 million, led by the Russia-Ukraine war.
Global average revenue per user (ARPU) increased 28% from a year ago to $1.33 buoyed by solid advertising demand. While ARPU in the United States and Canada increased 31% to $4.98, Europe and the Rest of the World’s ARPU surged 40% and 164%, respectively, to 72 cents and 8 cents.
Operating Details
Pinterest’s first-quarter 2022 operating costs increased 14% year over year to $578.6 million due to higher brand marketing campaigns and headcount increase. In the reported quarter, research and development expenses increased 24% to $195.5 million. Sales and marketing expenses surged 37% to $173.9 million.
Adjusted EBITDA (13% of total revenues) was $76.8 million in first-quarter 2022, down from $83.8 million (17% of total revenues). The company launched Pinterest API for Shopping, which will upgrade the product detail pages by incorporating real-time pricing and product availability.
Balance Sheet
The company ended Mar 31, 2022, with cash and cash equivalents of $1,683.8 million. Cash flow at quarter-end was $213.4 million.
Guidance
Pinterest expects second-quarter revenues to grow in the vicinity of 11% year over year. Non-GAAP operating expenses are expected to grow about 10% sequentially. For 2022, non-GAAP operating expenses are likely to grow 35-40% year over year due to increased investments in the native content ecosystem and higher headcount.
Zacks Rank & Stocks to Consider
Pinterest currently has a Zacks Rank #3 (Hold).
Avalara, Inc.
AVLR
, 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
.
Headquartered in Seattle, Avalara has offices across the United States, Brazil, Europe and India. It delivers cloud-based compliance solutions for various transaction taxes, including sales tax, VAT, GST, excise and other indirect tax types. Avalara delivered an earnings surprise of 57.4%, on average, in the trailing four quarters.
Benefitfocus, Inc.
BNFT
carries a Zacks Rank #2. It has a long-term earnings growth expectation of 30%.
BNFT delivered an earnings surprise of 84.4%, on average, in the trailing four quarters. It helps manage the complexity of benefits administration while delivering an experience that engages people and unlocks the potential for better health and improved outcomes.
Splunk Inc.
SPLK
carries a Zacks Rank #2. It has a long-term earnings growth expectation of 30%.
San Francisco, CA-based Splunk provides software solutions that enable enterprises to gain real-time operational intelligence by harnessing the value of their data. The company’s offerings enable users to investigate, monitor, analyze and act on machine data and big data, irrespective of format or source, and help in operational decision making.
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