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$PINS earnings are coming up and I felt it would be helpful to dig through the 2020 report and provide a primer for the current state of Pinterest.
Side Note: I’ve been focusing heavily on $PINS so feel free to see my other thread that goes into Pins in more detail https://twitter.com/Invest4Velocity/status/1381340815067385862
Side Note: I’ve been focusing heavily on $PINS so feel free to see my other thread that goes into Pins in more detail https://twitter.com/Invest4Velocity/status/1381340815067385862
$PINS Users:
Pinterest continues to demonstrate impressive user growth especially in the international segment where the CAGR is 37%
The US remains the most valuable segment of users so any beats in US user growth will be a big time win for Pinterest’s financials.
Pinterest continues to demonstrate impressive user growth especially in the international segment where the CAGR is 37%
The US remains the most valuable segment of users so any beats in US user growth will be a big time win for Pinterest’s financials.
$PINS ARPU
Pinterest’s Q4 overall ARPU has grown at 24% CAGR.
But a breakdown of US vs International provides real insight into the ARPU story.
US:
-Pinterest strategically focused on monetizing the US first
-Growth in ARPU shows they are executing effectively
Pinterest’s Q4 overall ARPU has grown at 24% CAGR.
But a breakdown of US vs International provides real insight into the ARPU story.
US:
-Pinterest strategically focused on monetizing the US first
-Growth in ARPU shows they are executing effectively
$PINS ARPU Continued
Int.:
-Pinterest has started to begin monetization of markets outside US
-Initial focus on western Europe
-1Q21 began to expand to parts of South America (Brazil)
Slower/deliberate approach is partially driven by need to set up sales teams in each region
Int.:
-Pinterest has started to begin monetization of markets outside US
-Initial focus on western Europe
-1Q21 began to expand to parts of South America (Brazil)
Slower/deliberate approach is partially driven by need to set up sales teams in each region
$PINS Revenue
The same themes found in the ARPU story are visible in the Revenue story for Pinterest
-Overall revenue growing at an attractive CLIP (60% CAGR for 4Q17 to 4Q20)
-US growing like a weed
-Int. has plenty of potential as Pins begins to monetize other markets
The same themes found in the ARPU story are visible in the Revenue story for Pinterest
-Overall revenue growing at an attractive CLIP (60% CAGR for 4Q17 to 4Q20)
-US growing like a weed
-Int. has plenty of potential as Pins begins to monetize other markets
$PINS Margins
Pinterest could achieve margins that almost every business would envy.
Proxy with $FB, which has some of the best unit economics of any business ever. Not exaggerating. Look at the financials
It cost almost nothing for FB to show another ad as a user scrolls
Pinterest could achieve margins that almost every business would envy.
Proxy with $FB, which has some of the best unit economics of any business ever. Not exaggerating. Look at the financials
It cost almost nothing for FB to show another ad as a user scrolls
$PINS shares this similar style of business and if they even becomes a poor mans $FB then investors should be very pleased as long as revenues grow.
Already, the gross margins of Pinterest are attractive and going in the right direction.
4Q Gross/Operating Margin = 82% / 29%
Already, the gross margins of Pinterest are attractive and going in the right direction.
4Q Gross/Operating Margin = 82% / 29%
$PINS Cash Flows
Pinterest self-funded business operations in 2020. However, it relied heavily on share-based comp which can cost shareholders through dilution.
The attractiveness of Pinterest’s business model should drive impressive ops cash flow growth as rev grows
Pinterest self-funded business operations in 2020. However, it relied heavily on share-based comp which can cost shareholders through dilution.
The attractiveness of Pinterest’s business model should drive impressive ops cash flow growth as rev grows
$PINS Share Dilution
Pinterest has executed very well and it is evident in the financials. An investor couldn’t ask for much more.
1 Risk to Watch:
Pinterest uses SBC aggressively and the business growth/operating leverage will need to outweigh future dilution. If not, look out
Pinterest has executed very well and it is evident in the financials. An investor couldn’t ask for much more.
1 Risk to Watch:
Pinterest uses SBC aggressively and the business growth/operating leverage will need to outweigh future dilution. If not, look out
$PINS What I’m looking for in 1Q21
Does US user growth surprise?
-Especially, with the male demographic which has been under-penetrated
-Any beat in US user growth should translate directly to revenue and operating income
Does US user growth surprise?
-Especially, with the male demographic which has been under-penetrated
-Any beat in US user growth should translate directly to revenue and operating income
$PINS
Maintain Int. user growth
-Pinterest is growing at a rapid clip internationally and it will be important for this to continue
-This also fuels the “back log” as Pinterest monetizes additional markets in the future
Maintain Int. user growth
-Pinterest is growing at a rapid clip internationally and it will be important for this to continue
-This also fuels the “back log” as Pinterest monetizes additional markets in the future
$PINS ARPU
-To reach expectations of Pinterest becoming a $100B+/$200B+ company, US ARPU will need to continue to grow to much higher levels
-Grow/Maintain Int. ARPU, more important that the markets Pins is seeking to monetize are trending well rather than overall #’s for Int.
-To reach expectations of Pinterest becoming a $100B+/$200B+ company, US ARPU will need to continue to grow to much higher levels
-Grow/Maintain Int. ARPU, more important that the markets Pins is seeking to monetize are trending well rather than overall #’s for Int.
$PINS Operating Leverage
-Historically, gross margins have been much lower in 1Q than 4Q so any meaningful increase in YoY could be a great sign for the business scaling
-Signals business is getting closer to 1Q profitability which could lead to profitability for every quarter
-Historically, gross margins have been much lower in 1Q than 4Q so any meaningful increase in YoY could be a great sign for the business scaling
-Signals business is getting closer to 1Q profitability which could lead to profitability for every quarter
$PINS Advertisers - from earnings call
-Companies allocating more $ for Pinterest or is it an alternative if extra ad $ available?
-Investment in ad tools paying off?
—More businesses advertising on Pins
—Increasing ad budgets on Pins
-Pins Shopping/Catalogue uploads going up?
-Companies allocating more $ for Pinterest or is it an alternative if extra ad $ available?
-Investment in ad tools paying off?
—More businesses advertising on Pins
—Increasing ad budgets on Pins
-Pins Shopping/Catalogue uploads going up?
I hope you enjoyed the thread and that it helps you identify what to look for as $PINS releases earnings on 4/27
