Pinterest (PINS -1.57%) is slated to report its first-quarter 2022 results after the market closes on Wednesday, April 27. A conference call with analysts is scheduled for the same day at 4:30 p.m. ET.
The visual-based social media company is heading toward its release on a mixed note. Last quarter, shares rose 11.2% after revenue and earnings beat the Wall Street consensus estimates. Indeed, earnings exceeded analysts' expectations in all four quarters last year.
However, user growth -- particularly in the United States -- continues to be pressured by tough year-over-year comparables from the earlier stages of the pandemic, when people were spending much more time in their homes and online.
Pinterest stock has been on a largely steady downslide since the second half of 2021, following it seesawing up-and-down in the first half of that year and soaring 254% in 2020. The stock is down nearly 75% since hitting its all-time high in mid-February 2021.
The stock's struggles are attributable to a combination of investor concern over user growth and market dynamics, which began to weigh on the stock late last year. That's when concerns about looming Federal Reserve interest rate increases began to hurt stocks in general, and particularly tech growth stocks and other interest rate-sensitive stocks.
Here's what to watch in Pinterest's upcoming Q1 report.
Image source: Getty Images.
Pinterest's key numbers
Following are the company's results from Q1 2021, its Q1 2022 guidance, and Wall Street's consensus estimates to use as benchmarks.
| Metric | Q1 2021 Result | Pinterest's Q1 2022 Guidance | Wall Street's Q1 2022 Consensus Estimate | Wall Street's Projected Change |
|---|---|---|---|---|
| Revenue | $485.2 million | Growth in the high-teens percentage range | $573.6 million | 18% |
| Adjusted* earnings per share (EPS) | $0.11 | N/A | $0.02 | (82%) |
Data sources: Pinterest and Yahoo! Finance. *"Adjusted" is synonymous with "non-GAAP"(generally accepted accounting principles). Note: Pinterest didn't issue earnings guidance.
For context, last quarter -- the big holiday quarter -- Pinterest's revenue grew 20% year over year to $846.7 million. That result comfortably surpassed the Street's consensus estimate of $828.4 million, and was also higher than the company's guidance of growth in the high-teens percentage range. Adjusted net income was $339.4 million, or $0.49 per share, up 14% from the year-ago period. That result beat the $0.45 per share analysts had been expecting.
Key user stats: U.S. numbers will be in focus
Pinterest's revenue is determined by two metrics: the number of global monthly active users (MAUs) and global average revenue per user (ARPU), which reflects the advertising rates it achieved. U.S. users are more valuable to the company than international ones since they bring in considerably more advertising revenue.
Last quarter, global MAUs fell 6% year over year to approximately 431 million. U.S. MAUs declined 12% to 86 million, while international MAUs edged down 4% to 346 million. Global ARPU rose 23% year over year to $1.93. Growth was driven by a 25% jump in U.S. ARPU to $7.43 and an 62% surge in international ARPU to $0.57.
In last quarter's earnings release, the company provided the following numbers as of Feb. 1, one month into the first quarter: U.S. MAUs of about 86.6 million, nearly 1% higher than at the end of the fourth quarter of 2021, and global MAUs of about 436.8 million. From these numbers, we can conclude that international MAUs were about 350.2 million, just over 1% higher than at the end of last quarter.
Second-quarter 2022 guidance
The market looks ahead, so its reaction to Pinterest's report will probably hinge heavily on guidance, relative to Wall Street's expectations, along with the user data.
For Q2, analysts are currently modeling for revenue to increase 13% year over year to $693.6 million and adjusted EPS to decline 36% to $0.16.
