Pinterest to report Q1 earnings on Tuesday after the market close
Pinterest (PINS) is scheduled to report results of its first fiscal quarter after the market close on Tuesday, May 5, with a conference call scheduled for 5:00 pm EDT. What to watch for:
1. GUIDANCE: On April 7, Pinterest withdrew its revenue and adjusted EBITDA margin guidance for full year 2020 that it initially issued on February 6, citing the "rapidly evolving and unpredictable effects of COVID-19," saying it is not in a position to forecast the expected impact of COVID-19 on its financial and operating results for the remainder of 2020. In a statement, Pinterest CFO Todd Morgenfeld said "The near-term financial impact of this pandemic is rapidly evolving and difficult to measure and quantify. First quarter revenue performance was consistent with our expectations through the middle of March, when we began to see a sharp deceleration. Fortunately, despite weakness across nearly the entire advertising market, our exposure to some of the most affected segments like travel, automotive, and restaurants has not been significant." At the time, the company reported preliminary Q1 revenue of $269M-$272M, against analysts' consensus estimates at the time of $266.75M.
Baird analyst Colin Sebastian said that the withdrawn guidance is not surprising given the steep deceleration in advertising spending last month and the uncertainty regarding the duration of COVID-19 driven slowdown. However, the better than expected active users and record levels of engagement over the past two weeks bode well for Pinterest growth once the "storm clouds clear," he said. 2. MAUs: Pinterest said on April 7 that for Q1, it expects global monthly active users in the range of 365M-367M, with 89M-90M in the U.S. and 276M-277M internationally. The company previously reproted Q4 global MAUs up 26% year-over-year to 335M. 3. COMPETITION: In February, an experimental group within Facebook (FB) quietly released a Pinterest-like app for saving and sharing photos of activities like cooking and home improvement projects, The Information's Alex Heath wrote. The app is called Hobbi and is meant to "help you document and remember the things you love to do," according to its App Store description.
4. 'CHALLENGING' OPERATING ENVIRONMENT: DA Davidson analyst Tom Forte lowered the firm's price target on Pinterest to $21 from $33, citing the company's withdrawn FY20 guidance, Q1 update, and COO departure, noting that its operating environment during COVID-19 is made more challenging by its economic sensitivity to advertising revenue. Given the pullback in its stock price however, Forte also contends that Pinterest in on a "short list of high-quality growth names" that warrants a closer look, with improvements forecasted to come in 2021.
Keywords: earnings, earnings watch, Q1, first quarter, quarterly results, guidance, MAU