Pinterest Revenue Breakdown, Profitability And Margin

Social media space. Pixabay Image.

Pinterest (PINS), a leading social media platform, has an estimated 450 million monthly active users globally, according to the company’s latest filings.

That said, this article presents the revenue and revenue breakdown of the social media company Pinterest (PINS).

Apart from revenue, we also look at Pinterest’s profitability and margins.

Pinterest’s revenue by geographical regions includes the U.S. & Canada, Europe, and the Rest Of World. Europe includes Russia and Turkey.

Let’s get started!

Please use the table of contents to navigate this page.

Definitions

To help readers understand the content better, the following terms and glossaries have been provided.

Adjusted EBITDA: Pinterest defines the Adjusted EBITDA as net income (loss) adjusted to exclude depreciation and amortization expense, share-based compensation expense, interest income, interest expense and other income (expense), net, provision for income taxes, non-cash charitable contributions, and other non-recurring or one-off expenses.

The purpose of the Adjusted EBITDA is to evaluate the company’s operating results and for financial and operational decision-making purposes.

Pinterest believes the Adjusted EBITDA helps identify underlying trends in its businesses that could otherwise be masked by the effect of the income and expenses it excludes.

This measure provides an additional tool for investors to compare Pinterest’s core business operating results over multiple periods with other companies operating in the same industry.

Revenue By Region: According to Pinterest, Inc., revenue by region is geographically apportioned based on its estimate of the geographic location of its users when they perform a revenue-generating activity.

This allocation is consistent with how the company’s Average Revenue Per User is determined.

Back To Table Of Contents

How Does Pinterest Earn Revenue

Pinterest generates its revenue primarily through advertising, made possible through a suite of advertising options available on the platform.

These options include promoted pins, promoted videos, sponsored content, and more.

To help businesses reach their target audience, Pinterest offers a range of advertising targeting options.

Additionally, Pinterest earns revenue through e-commerce features such as Shop the Look and Lens, allowing users to discover and purchase products directly from the platform.

Back To Table Of Contents

Strategy And Business Model

Pinterest’s business model primarily relies on advertising. Companies and businesses can create advertising campaigns on the platform to promote their products or services to Pinterest users.

These campaigns can be in the form of promoted pins, promoted videos, sponsored content, and more. Pinterest offers various advertising targeting options to help businesses reach their desired audience.

Additionally, the platform has e-commerce features such as Shop the Look and Lens, enabling users to browse and purchase products directly from the marketplace.

Back To Table Of Contents

Revenue By Year

Pinterest-revenue-by-year

(click image to expand)

Pinterest has been experiencing a consistent rise in its revenue over the years.

The company’s revenue grew from US$473 million in 2017 to US$756 million in 2018 and further to US$1.14 billion in 2019.

Despite the challenges posed by the pandemic in 2020, Pinterest’s revenue continued to grow and reached US$1.69 billion.

As of 2022, Pinterest’s annual revenue reached a record figure of US$2.8 billion, up 8% over 2021.

Back To Table Of Contents

Revenue By Quarter

Pinterest-revenue-by-quarter

(click image to expand)

Pinterest’s quarterly revenue has shown consistent growth over the years.

In Q1 2023, the company generated US$603 million in revenue, up 5% YoY. In Q2 2023, Pinterest’s revenue was US$708 million, up 6% YoY. The revenue for Q3 2023 was US$763 million, up 11% YoY.

Despite the challenges posed by the pandemic, Pinterest’s revenue has continued to grow, primarily driven by advertising and e-commerce features on the platform.

The company’s persistent revenue growth is a testament to its ability to provide value to its users and advertisers alike.

Back To Table Of Contents

Revenue By TTM

Pinterest-revenue-by-ttm

(click image to expand)

The TTM plot above is much smoother than the quarterly plot, clearly depicting the consistent rise of Pinterest’s advertising sales.

That said, Pinterest’s TTM revenue reached a record high of US$2.9 billion as of 3Q 2023, up 6% over the same quarter last year.

Despite the consistent revenue growth in most periods, Pinterest’s revenue growth has probably slowed in the post-pandemic era.

The chart shows that the TTM revenue plot in the post-pandemic era does not look as steep as in the pre-pandemic period.

Back To Table Of Contents

Growth Rates Of Revenue By TTM

Pinterest-revenue-by-ttm-growth-rates

(click image to expand)

The growth rate plot above shows that Pinterest’s revenue growth has indeed slowed in the post-pandemic era.

As shown in the plot above, Pinterest’s YoY revenue growth amounted to only 6.5% as of 3Q 2023, one of the lowest ratios ever recorded.

For the past five quarters, Pinterest’s YoY revenue growth had primarily been in single digits, highlighting the significant slowdown of the company’s advertising sales.

Moreover, the curve shown in the chart above has been on a slide since 2021, underscoring the company’s challenges to grow its advertising revenue in the post-pandemic periods.

Back To Table Of Contents

Gross Profit, Operating Profit, And Adjusted EBITDA

Pinterest-profitability

(click image to expand)

Pinterest’s gross profit has consistently grown over the years, reaching as much as US$2.1 billion in fiscal 2022, up 4% over 2021.

While gross profit has risen, other profitability metrics such as operating income and adjusted EBITDA have declined.

For example, Pinterest’s non-GAAP adjusted EBITDA was down significantly in 2022, topping only US$442 million compared to US$814 million in the prior year.

In terms of operating profit, Pinterest consistently incurs operating losses, illustrating the unprofitable nature of the company’s operations.

In fiscal 2022, Pinterest’s operating loss came in at -US$102 million compared to an operating income of US$326 million in 2021.

In short, Pinterest generates inconsistent profit and is not a profitable company.

Back To Table Of Contents

Gross Margin, Operating Margin, And Adjusted EBITDA Margin

Pinterest’s margins

(click image to expand)

Pinterest generates impressive gross margins in most fiscal years, topping as much as 76% in fiscal 2022.

Pinterest’s gross margin in fiscal 2021 was even more impressive at nearly 80%.

Since 2018, Pinterest’s gross margin has steadily risen, illustrating the massive profit the company rakes in at the gross profit level.

While Pinterest produces impressive gross margins, its other profit margins are unattractive.

For example, Pinterest produced an adjusted EBITDA margin of only 15.8% in fiscal 2022, down significantly from the 31.6% recorded in 2021.

Since Pinterest incurs operating losses, its operating margin is mainly in the red, illustrating the company’s substantial operational expenses.

While Pinterest produced an operating margin of 12.6% in 2021, this figure reversed to -3.6% in 2022, primarily driven by a massive increase in operating expenses, especially in sales and marketing as well as research and development.

Back To Table Of Contents

U.S. And Canada, Europe, And Rest Of World Revenue

Pinterest’s revenue by region

(click image to expand)

For revenue by region, Pinterest earned US$2.3 billion in revenue in the U.S. and Canada in 2022, and the sales from the North American region are by far the biggest source of revenue for the social media giant.

Pinterest’s US$2.3 billion in sales from the U.S. and Canada represents an increase of 8% over 2021.

For the European region, Pinterest’s revenue in this segment totaled nearly US$400 million in fiscal 2022, while revenue from the Rest Of World came in at US$95 million in the same period.

In short, the largest revenue stream for Pinterest is from the U.S. and Canada (North America), while the Rest Of World contributes the least revenue to the social media giant.

Back To Table Of Contents

U.S. And Canada, Europe, And Rest Of World Revenue In Percentage

Pinterest’s revenue share by region

(click image to expand)

Pinterest’s sales from the U.S. and Canada account for the biggest portion, totaling 82.7% and 82.4% in 2021 and 2022, respectively.

On the contrary, Pinterest’s Europe revenue represents only 14.2% of the total revenue in 2022, down slightly from the 14.8% reported in 2021.

Pinterest’s revenue from Rest Of World formed only 3.4% of the total revenue in 2022, up slightly from the 2.4% reported in 2021.

Back To Table Of Contents

Growth Rates Of U.S. And Canada, Europe, And Rest Of World Revenue

Pinterest’s revenue by region growth rates

(click image to expand)

Pinterest’s global revenue grew by 8.7% in 2022 over 2021.

Pinterest’s Rest Of World grew the fastest of all the regions, at 53.2% in 2022.

On the other hand, Pinterest’s U.S. and Canada revenue grew 8.3% in 2022, while revenue from Europe rose only 4.2% year-over-year.

Pinterest’s U.S. and Canada revenue growth is expected to be similar to the global revenue growth as this region contributes the most sales, notably at over 80% in 2022.

Back To Table Of Contents

Summary

To recap, Pinterest’s revenue has consistently grown despite the challenges posed by the pandemic.

Despite experiencing significant revenue growth, the company remains unprofitable due to its substantial and escalating operating expenses.

Nevertheless, Pinterest has been able to provide value to its users and advertisers, which has contributed to its success in the competitive social media landscape.

Back To Table Of Contents

References and Credits

1. All financial figures presented in this article were obtained and referenced from PINS’ quarterly and annual reports, investor presentations, press releases, earnings releases, SEC filings, etc., which are available in Pinterest Investor Relation.

2. Image by Gerd Altmann from Pixabay

Back To Table Of Contents

Disclosure

References and examples such as tables, charts, and diagrams are constantly reviewed to avoid errors, but we cannot warrant the total correctness of all content.

The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.

If you find the information in this article helpful, please consider sharing it on social media and provide a link to this article from any website so that more articles like this can be created.

Thank you!

Back To Table Of Contents