Pinterest (PINS -0.27%) stock is up 4.9% on Thursday as of 11:21 a.m. ET following the social media company's release of better-than-expected first-quarter 2022 results after the market close on Wednesday.
The quarter's earnings crushed the Wall Street consensus estimate, while revenue slightly exceeded analysts' expectations. Moreover, the global monthly active user count edged up sequentially, reversing the downward trend of the prior three quarters. While revenue guidance for the second quarter came in a little lighter than the Street had expected, this was a relatively minor hiccup.
Here's how the quarter worked out for Pinterest and its investors.
Image source: Pinterest.
Pinterest's key numbers
| Metric | Q1 2022 | Q1 2021 | Change |
|---|---|---|---|
| Revenue | $574.9 million | $485.2 million | 18% |
| GAAP net income | ($5.3 million) | ($21.7 million) | Loss narrowed 76% |
| Adjusted net income | $69.0 million | $78.5 million | (12%) |
| GAAP earnings per share (EPS) | ($0.01) | ($0.03) | Loss narrowed 67% |
| Adjusted EPS | $0.10 | $0.11 | (10%) |
Data source: Pinterest. GAAP = generally accepted accounting principles.
Wall Street was looking for adjusted EPS of $0.04 on revenue of $573.6 million. So, Pinterest sailed by the profit expectation, and edged by the top-line estimate. Revenue was in line with the company's guidance of year-over-year growth in the high-teens percentage range. (The company didn't provide earnings guidance.)
In the first quarter, Pinterest generated cash of $213.4 million running its operations. This result is down 21% from the year-ago period, but still strong. The company ended the quarter with $1.7 billion in cash and cash equivalents.
For context, in the fourth quarter of 2021 -- the holiday quarter -- revenue grew 20% year over year to $846.7 million. Adjusted earnings rose 14% to $0.49 per share. Both results beat the Street's expectations.
Key user and operational stats
Starting this quarter, Pinterest expanded the geographic categories for which it provides data. Previous categories were global, U.S., and international.
| Metric | Q1 2022 | Change (YOY) |
|---|---|---|
| Monthly active users (MAUs)-Global | 433 million | (9%) |
| MAUs-U.S. and Canada | 94 million | (13%) |
| MAUs-Europe | 120 million | (12%) |
| MAUs-Rest of World | 220 million | (6%) |
| Average revenue per user (ARPU)-Global | $1.33 | 28% |
| ARPU-U.S. and Canada | $4.98 | 31% |
| ARPU-Europe | $0.72 | 40% |
| ARPU-Rest of World | $0.08 | 164% |
Data source: Pinterest. YOY = year over year.
The number of monthly active users across all regions continued to decline year over year. This is a reflection of "tough year-over-year comparables from the earlier stages of the pandemic, when people were spending much more time in their homes and online," as I wrote in my earnings preview.
But at least the global MAU count of 433 million came in higher, albeit just slightly, than last quarter's 431 million. This result broke the three-quarter streak of declining sequential global MAUs.
Average revenue per user -- which fell during the earlier stages of the pandemic -- continues to grow robustly year over year. The revenue generated from the strong rebounding of this metric more than offset the revenue lost from the year-over-year decline in monthly active users.
Second-quarter sales expected to grow about 11%
For the second quarter, management guided for revenue growth of about 11% year over year. Going into the report, Wall Street had been modeling for 13% revenue growth in the quarter.
In the earnings release, the company provided the following user numbers as of April 25, which is 25 days into the second quarter: U.S. and Canada MAUs of 94 million and global MAUs of 432.9 million. Both these numbers are about flat with the MAUs at the end of the first quarter.
In short, Pinterest turned in a solid first quarter.
