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After Zoom's S-1 filing, San Francisco's social society giant and the San Francisco unicorn have publicly filed their status. The long march of society towards public markets has been the subject of much speculation. The company joins a number of other highly regarded technology companies for its IPO this year.
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The company's case with the SEC was widely expected to land today, after news was announced this morning that the company was accelerating its IPO. Recent market conditions looked good, and Lyft, an extremely unprofitable business, managed to find more buyers than it needed to sell shares. The shipping company will likely increase its price, sell more shares, or both.
But Pinterest's IPO has a cleaner ramp to profits, as we'll see. Let's see the numbers.
Financial facts
Before you begin, Pinterest uses the calendar year instead of a modified tax calendar. We will examine it using periods of a full year that correspond to years as we know them.
Pinterest has consistently announced revenue growth and declining losses. The top and bottom lines of its financial statements are therefore each in the right direction.
In 2016, Pinterest achieved a turnover of $ 298.9 million, resulting in a net loss of $ 182.1 million. In 2017, both figures improved. Pinterest reported net income of $ 472.9 million and a net loss of $ 130.0 million. And in 2018, the last full year, Pinterest lost $ 63.0 million, although less important, for a business turnover of $ 755.9 million.
Pinterest grew by 58.2% between 2016 and 2017 and by 60.0% between 2017 and 2018. This acceleration in revenue growth, coupled with lower net losses, could shock investors at the same time. looking for a trajectory of growth and profitability. Pinterest may be able to afford both during its upcoming roadshow.
Licorne's revenue is lower than that of some software companies. In 2018, the company's revenues were more than $ 755 million, resulting in a charge of more than $ 241 million. That left Pinterest with a gross margin of about 68% a year. Its gross margin in 2017 was about 62%. This improvement is a boon to Pinterest, a defense company difficult to value for 12.35 billion dollars.
As for its cash position, the company is almost comically rich. Pinterest closed the 2018 calendar with nearly $ 628 million in cash and cash equivalents. It is a mountain of ducks, exacerbated by its modest consumption of funds. Pinterest's cash flow from operating activities increased from – $ 102.9 million in 2017 to – $ 60.4 million in 2018, and the company went from negative cash flow related to investments. to a positive number last year. The company had years of cash on hand before depositing. After this offer, the company will be well prepared for future growth, assuming that it will not be able to quickly generate positive operating cash flow.
A big fourth quarter
Why is Pinterest pushing its IPO now? The company released a fourth-quarter monster. In the last three months of 2018, Pinterest achieved a record $ 273.2 million in revenue, generating a disproportionate $ 47 million profit.
Not surprisingly, Pinterest is taking advantage of the holiday shopping season in the fourth quarter of each year. In the fourth quarter of 2017, for example, Pinterest generated a profit, although its net profit was less than $ 3.4 million. The company traditionally loses a lot of money in the first quarter.
So, go out now while you calculate, as the children say.
Tip your cloud provider
Before we turned away from the company's financial performance, something caught our attention. Have you ever had a big bill in front of you? How about three quarters of a billion dollars spent in cloud? Read it:
In May 2017, we changed the company agreement governing our use of AWS services with an addendum. Under the Agreement, as amended by the Endorsement, we agree that a large majority of our monthly usage of certain computing, storage, data transfer and other services must be provided under the Endorsement. , and that we are required to buy at least $ 750.0 million of cloud. services, which we primarily use for computing, storage, and data transfer services, from AWS to July 2023
Dropbox is not the case, in other words.
Backers And Winners
Pinterest has raised a known total of about $ 1.5 billion from its investors. The company's largest financing was a $ 186 million Series G in May 2015 led by Goldman Sachs Investment Partners, Angel SV and Wellington Management. The company then raised $ 150 million in June 2017 from Sinai Ventures.
Pinterest has not yet broken down the percentage that every investor has in the company, in his S-1 filing. Listed investors include Bessemer Venture Partners, FirstMark, Andreessen Horowitz, Fidelity, Valiant, and co-founder and CEO Paul Sciarra (who left the company in 2012). The leaders listed are: Benjamin Silbermann, founder and CEO of Pinterest; Jeff Jordan, General Partner at Andreessen Horowitz and CEO of OpenTable; and Leslie J. Kilgore, director at Netflix.
In terms of acquisitions, Pinterest has purchased 15 companies since its inception in 2009. Lately, it has been transferred to the Jelly HQ search engine in March 2017. Other Pinterest-owned businesses include Instapaper, Hike Labs and Math Camp.
Understand all that
As we pointed out, Pinterest had higher expectations for its own growth than it had anticipated. But the company's big quarter, its history of growth, and especially the slowing down of its losses, could help it position itself firmly.
In fact, after seeing the benefits of Zoom and the falling losses of Pinterest (measured in dollars, not just in revenue points), the Lyft S-1 seems worse and worse.
As always, more when it costs.
Illustration credit: Li Anne Dias
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