Investors are likely pinning their hopes on Pinterest (PINS 0.43%) delivering them a treat this Halloween in the form of good third-quarter 2019 results. The San Francisco-based social media company is slated to report its results after the market closes on Thursday, Oct. 31.
Pinterest, which operates a platform for sharing visual images, is going into its report on a mixed note. On the positive side, last quarter, it beat Wall Street's revenue and earnings expectations. On the other hand, its stock has been hit hard over the last few months, which we can attribute largely to investors selling shares ahead of the company's lockup period expiration, which occurred earlier this month. When these periods expire -- typically six months after a company's initial public offering (IPO) -- insiders are permitted to sell shares.
Pinterest stock is down 30% from its high set in mid-August, though up nearly 35% (though Oct. 28) from its April IPO price of $19.
Here's what to look for when Pinterest reports.
Image source: Getty Images.
Key quarterly numbers
Since Pinterest just went public in April, it didn't publicly release earnings a year ago. So, the following chart shows its results for last quarter, Q2, rather than the more typical year-ago period. These numbers and analysts' expectations can be used as benchmarks.
| Metric | Q2 2019 Result | Wall Street's Q3 2019 Consensus Estimate | Wall Street's Projected Sequential Change |
|---|---|---|---|
|
Revenue |
$261.2 million |
$280.6 million |
7.4% |
|
Adjusted earnings per share (EPS) |
($0.06) |
($0.04) |
Loss narrowing by 33% |
Data sources: Pinterest and Yahoo! Finance.
Wall Street is expecting Pinterest's revenue to grow more than 7% quarter over quarter and its adjusted loss per share to narrow by 33%. Given how new the company is to the public markets, revenue growth is probably the better metric to use to gauge its performance.
For some context, in the second quarter, Pinterest's revenue soared 62% year over year to $261.2 million, breezing by the $235.5 million Wall Street was expecting. That growth was an acceleration from the first quarter's growth of 54% year over year. The company's adjusted, or non-GAAP (generally accepted accounting principles), net loss narrowed 28% from the year-ago period to $24.5 million, or $0.06 per share. Analysts had been projecting a $0.08 loss per share. GAAP net loss came in at $1.16 billion, although much of that loss was related to one-time charges associated with the IPO.
Key user stats
User growth is the engine powering Pinterest, since more eyeballs equates to greater advertising dollars. So, investors will want to take in metrics in this category. Last quarter, monthly active users (MAUs) worldwide jumped 30% year over year to 300 million, with average revenue per user (ARPU) rising 29% to $0.88.
Full-year guidance
The market is a forward-looking machine, so its reaction to the release will likely hinge more on changes in guidance than on third-quarter results.
Last quarter, Pinterest raised its full-year outlook. It now expects revenue in the range of $1.095 billion to $1.115 billion, up from its prior forecast of $1.055 billion to $1.080 billion. It projects adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of negative $50 million to negative $25 million, up from its prior guidance of negative $70 million to negative $45 million.
Once again, Pinterest is scheduled to report its Q3 results after the market closes on Thursday, Oct. 31, followed by a conference call with analysts at 5 p.m. EDT.
