Pinterest filed a new IPO paperwork on Friday, in preparation for an initial public offering, expected in April. Pinterest will go public on NYSE with the ticker symbol $PINS. S-1 IPO framework offers a comprehensive look at Pinterest’s business including the revenue generated, salary’s given to CXOs and other details.
Pinterest has consistently reported revenue growth and falling losses. The company, says it earned more than $750 million in revenue last year, and it’s cut its losses from nearly $200 million in 2016 down to just under $75 million annually. Pinterest says it was, in fact, profitable in the fourth quarter of 2018. Pinterest grew 58.2 percent from 2016 to 2017, and 60.0 percent from 2017 to 2018. In total, Pinterest has posted $1.525 billion in revenue since 2016.
Source: Page 69 of S-1
Pinterest counted 265 million monthly active users, bringing in some $700 million in ad revenue in 2018, per reports, a 50 percent increase year-over-year.
Source: Page 67 of S-1
The company’s global average revenue per user (ARPU) in the year ended December 31, 2018, was $3.14, up 25 percent YoY. Its U.S. ARPU, meanwhile, sat at $9.04, a 47 percent increase from the previous estimation.
Source: Page 70 of S-1
Pinterest closed calendar 2018 with nearly $628 million in cash and equivalents. The company’s operating cash flow improved from -$102.9 million in 2017 to -$60.4 million in 2018, and the firm went from negative investing cash flow to positive last year. In the S-1 filing, “the company says that it will be well-set for future growth after the offering, presuming that it doesn’t manage to reach positive operating cash flow in short order.”
The S1-filing also showed the salaries earned by CXOs. Co-founder and CEO Ben Silbermann earned a salary of $197,100. However, CFO Todd Morgenfeld earned a base salary of $360,500 with stock awards worth $22,028,696. The company did not break down its stock ownership so it’s not clear what would be the salaries of the execs, once Pinterest goes public. The company will offer two classes of stock. Class A shares will receive one vote per share, while Class B shares will receive 20 votes per share.
Pinterest raised a total of almost $1.5 billion from its investors. The company’s biggest funding round was a $186 million Series G in May 2015, led by Goldman Sachs Investment Partners, SV Angel, and Wellington Management. The company went on to raised $150 million in June 2017 from Sinai Ventures.
Associated Risk factors
Pinterest said “eight out of 10 moms” are on its platform, adding that “are often the primary decision-makers when it comes to buying products and services for their household.” In its S-1 filing, Pinterest acknowledges this as a risk and notes that they would now have to penetrate new demographics.
The company noted that its reliance on other third-party platforms and services could be a risk factor for the business. In 2018, Facebook changed its login authentication systems, which negatively impacted Pinterest’s user growth in the second quarter of 2018. “If Facebook or Google discontinue single sign-on or experience an outage, then we may lose and be unable to recover users previously using this function, and our user growth or engagement could decline” noted the company in the filing.
Pinterest also acknowledged ad-blocking tools as one of its risk factors which may, in the future, harm its profitability. “Existing ad blocking technologies that have not been effective on our service may become effective as we make certain product changes, and new ad blocking technologies may be developed,” the company writes in the filing.
US and EU regulations based on privacy and sensitive content policies may also hold Pinterest accountable for failure to comply with possible content removal requirements in the future. This was also identified as one of the risks in the S-1 filing. Pinterest took steps to reduce the spread of misinformation about vaccines on its platform last month when it suspended search results including pins and boards, for the terms related to vaccinations, whether in favor or against them.
The company notes, “We are in the early stages of our monetization efforts and are still growing and scaling our revenue model. Our growth strategy depends on, among other things, attracting more advertisers (including serving more mid-market and unmanaged advertisers and expanding our sales efforts to reach advertisers in additional international markets), scaling our business with existing advertisers and expanding our advertising product offerings, such as self-serve tools. There is no assurance that this revenue model will continue to be successful or that we will generate increased revenue.”
Pinterest’s public offering joins the list of highly-valued technology firms going public this year including Lyft, Zoom and soon Uber and Slack.
Here’s what the Twitterati had to say.
– 250+ million monthly users
– $750m in revenue last year on a $63 million loss
– $473m in revenue in 2017
— Alex Heath (@alexeheath) March 22, 2019
1) Going through the Pinterest $PINS S-1 (as one does on Sunday mornings). Failure to disclose DAUs is both surprising and a mistake. They are focusing on weekly actives (WAUs) at 57% of MAUs. Suspect this is because ARPU on a DAU basis is already better than $TWTR, $SNAP.
— Gavin Baker (@GavinSBaker) March 24, 2019
Never really thought of it this way, but reading Pinterest's S-1 filing, its challenges sound a lot like a media brand's: https://t.co/Qw0zlvIPbu
— Dana Wollman (@DanaWollman) March 22, 2019
Recent tech IPOs show benefits of growth flowing to infra providers
• $lyft spending $300m over next 3 years on AWS
• $pins spending $750m over next 6 years on AWS
• $snap spending $1bn on AWS and $2bn on Google Cloud over next 5 yearshttps://t.co/z301hh4wJT $amzn $googl
— Joel-Oskar Raisanen (@joeloskarr) March 23, 2019