CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Allowances | $ 5,670 | $ 2,851 |
| Class A Common Stock | ||
| Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
| Common stock, shares authorized (in shares) | 6,666,667,000 | 6,666,667,000 |
| Common stock, shares issued (in shares) | 507,248,000 | 360,850,000 |
| Common stock, shares outstanding (in shares) | 507,248,000 | 360,850,000 |
| Class B Common Stock | ||
| Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
| Common stock, shares authorized (in shares) | 1,333,333,000 | 1,333,333,000 |
| Common stock, shares issued (in shares) | 107,995,000 | 209,054,000 |
| Common stock, shares outstanding (in shares) | 107,995,000 | 209,054,000 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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| Income Statement [Abstract] | ||||
| Revenue | $ 442,616 | $ 279,703 | $ 987,041 | $ 742,863 |
| Costs and expenses: | ||||
| Cost of revenue | 112,844 | 83,520 | 320,335 | 262,629 |
| Research and development | 160,187 | 167,703 | 442,484 | 1,042,026 |
| Sales and marketing | 118,531 | 110,740 | 322,041 | 484,053 |
| General and administrative | 148,087 | 51,450 | 249,834 | 299,834 |
| Total costs and expenses | 539,649 | 413,413 | 1,334,694 | 2,088,542 |
| Loss from operations | (97,033) | (133,710) | (347,653) | (1,345,679) |
| Interest income | 2,896 | 9,837 | 14,265 | 22,023 |
| Interest expense and other income (expense), net | (51) | (1,056) | (2,144) | (2,004) |
| Loss before provision for income taxes | (94,188) | (124,929) | (335,532) | (1,325,660) |
| Provision for (benefit from) income taxes | 32 | (197) | 632 | (7) |
| Net loss | $ (94,220) | $ (124,732) | $ (336,164) | $ (1,325,653) |
| Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) | $ (0.16) | $ (0.23) | $ (0.57) | $ (4.15) |
| Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (in shares) | 603,490 | 546,126 | 588,895 | 319,490 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
| Statement of Comprehensive Income [Abstract] | ||||
| Net income (loss) | $ (94,220) | $ (124,732) | $ (336,164) | $ (1,325,653) |
| Other comprehensive income (loss), net of taxes: | ||||
| Change in unrealized gain (loss) on available-for-sale marketable securities | (1,772) | 0 | 1,634 | 1,934 |
| Change in foreign currency translation adjustment | 98 | (147) | (218) | (137) |
| Comprehensive loss | $ (95,894) | $ (124,879) | $ (334,748) | $ (1,323,856) |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Sep. 30, 2019 |
|---|---|---|
| Reconciliation of cash, cash equivalents and restricted cash to condensed consolidated balance sheets | ||
| Cash and cash equivalents | $ 652,723 | $ 1,033,871 |
| Restricted cash included in prepaid expenses and other current assets | 1,470 | 2,409 |
| Restricted cash | 9,221 | 24,822 |
| Total cash, cash equivalents, and restricted cash | $ 663,414 | $ 1,061,102 |
Description of Business and Summary of Significant Accounting Policies |
9 Months Ended |
|---|---|
Sep. 30, 2020 | |
| Accounting Policies [Abstract] | |
| Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business Pinterest was incorporated in Delaware in 2008 and is headquartered in San Francisco, California. Pinterest is a visual discovery engine that people around the globe use to find the inspiration to create a life they love. We generate revenue by delivering ads on our website and mobile application. Basis of Presentation and Consolidation We prepared the accompanying condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). The condensed consolidated financial statements include the accounts of Pinterest, Inc. and its wholly owned subsidiaries. We have eliminated all intercompany balances and transactions. The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited financial statements as of that date. We have condensed or omitted certain information and notes normally included in complete financial statements prepared in accordance with GAAP. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2019, which are included in our Annual Report on Form 10-K. In our opinion, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the results for the interim periods presented, but they are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2020. Reclassifications We have reclassified certain amounts in prior periods to conform with current presentation. Use of Estimates Preparing our condensed consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect amounts reported in the condensed consolidated financial statements and accompanying notes. We base these estimates and judgments on historical experience and various other assumptions that we consider reasonable. GAAP requires us to make estimates and assumptions in several areas, including the fair values of financial instruments, assets acquired and liabilities assumed through business combinations, common stock prior to our initial public offering ("IPO"), share-based awards, and contingencies as well as the collectability of our accounts receivable, the useful lives of our intangible assets and property and equipment, the incremental borrowing rate we use to determine our operating lease liabilities, and revenue recognition, among others. Actual results could differ materially from these estimates and judgments. Many of our estimates require increased judgment due to the significant volatility, uncertainty and economic disruption of the recent global COVID-19 pandemic. We continue to monitor the effects of the COVID-19 pandemic, and our estimates and judgments may change materially as new events occur or additional information becomes available to us. Segments We operate as a single operating segment. Our chief operating decision maker is our Chief Executive Officer, who reviews financial information presented on a consolidated basis, accompanied by disaggregated information about our revenue, for purposes of making operating decisions, assessing financial performance and allocating resources. Revenue Recognition We generate revenue by delivering ads on our website and mobile application. We recognize revenue only after transferring control of promised goods or services to customers, which occurs when a user clicks on an ad contracted on a cost per click (“CPC”) basis, views an ad contracted on a cost per thousand impressions (“CPM”) basis or views a video ad contracted on a cost per view ("CPV") basis. We typically bill customers on a CPC, CPM or CPV basis, and our payment terms vary by customer type and location. The term between billing and payment due dates is not significant. We occasionally offer customers free ad inventory, and revenue is recognized only after satisfying our contractual performance obligations. When contracts with our customers contain multiple performance obligations, we allocate the overall transaction price, which is the amount of consideration to which we expect to be entitled in exchange for promised goods or services, to each of the distinct performance obligations based on their relative standalone selling prices. We generally determine standalone selling prices based on the effective price charged per contracted click, impression or view and we do not disclose the value of unsatisfied performance obligations because the original expected duration of our contracts is generally less than one year. We record sales commissions in sales and marketing expense as incurred because we would amortize these over a period of less than one year. Deferred revenue was not material as of September 30, 2020 and December 31, 2019. Share-Based Compensation Restricted stock units ("RSUs") granted under our 2009 Stock Plan (the "2009 Plan") are subject to both a service condition, which is typically satisfied over four years, and a performance condition, which was deemed satisfied upon the pricing of our IPO. We did not record any share-based compensation expense for our RSUs prior to our IPO because the performance condition had not yet been satisfied. Upon pricing our IPO, we recorded cumulative share-based compensation expense using the accelerated attribution method for those RSUs granted under our 2009 Plan for which the service condition had been satisfied at that date. We will record the remaining unrecognized share-based compensation expense over the remainder of the requisite service period. RSUs and Restricted Stock Awards ("RSAs") granted under our 2019 Omnibus Incentive Plan (the "2019 Plan") are subject only to a service condition, which is typically satisfied over four years. We record share-based compensation expense for these RSUs and RSAs on a straight-line basis over the requisite service period. We measure RSUs and RSAs based on the fair market value of our common stock on the grant date, and we account for forfeitures as they occur. Leases and Operating Lease Incremental Borrowing Rate We lease office space under operating leases with expiration dates through 2033. We determine whether an arrangement constitutes a lease and record lease liabilities and right-of-use assets on our condensed consolidated balance sheets at lease commencement. We measure lease liabilities based on the present value of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or our incremental borrowing rate, which is the estimated rate we would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. We estimate our incremental borrowing rate based on an analysis of publicly traded debt securities of companies with credit and financial profiles similar to our own. We measure right-of-use assets based on the corresponding lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs we incur and (iii) tenant incentives under the lease. We begin recognizing rent expense when the lessor makes the underlying asset available to us, we do not assume renewals or early terminations unless we are reasonably certain to exercise these options at commencement, and we do not allocate consideration between lease and non-lease components. For short-term leases, we record rent expense in our condensed consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets not held at fair value. ASU 2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model which will result in earlier recognition of credit losses. We adopted ASU 2016-13 as of January 1, 2020, using the modified retrospective method, and while the effects of adoption on our condensed consolidated financial statements were not material, we continue to monitor the effects of the COVID-19 pandemic on expected credit losses. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles for income taxes. We elected to early adopt ASU 2019-12 effective as of January 1, 2020, and the effects of adoption on our condensed consolidated financial statements were not material.
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Fair Value of Financial Instruments |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair values of the financial instruments we measure at fair value on a recurring basis are as follows (in thousands):
We classify our marketable securities within Level 1 or Level 2 because we determine their fair values using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Gross unrealized gains and losses on our marketable securities were immaterial in the aggregate as of September 30, 2020 and December 31, 2019. We evaluated all available evidence and did not recognize any allowance for credit losses for our marketable securities as of September 30, 2020 and December 31, 2019. We continue to monitor the effects of the COVID-19 pandemic on expected credit losses. The fair value of our marketable securities by contractual maturity is as follows (in thousands):
Net realized gains and losses from sales of available-for-sale securities were not material for any period presented.
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Commitments and Contingencies |
9 Months Ended |
|---|---|
Sep. 30, 2020 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | Commitments and Contingencies Commitments In March 2019, we entered into a lease for approximately 490,000 square feet of office space to be constructed near our current headquarters campus in San Francisco, California. In August 2020, we entered into an agreement to terminate the lease which involved a one-time payment of $89.5 million. As a result of the termination, we will not be subject to future total minimum lease payments of approximately $440.0 million. Legal Matters We are involved in various lawsuits, claims and proceedings that arise in the ordinary course of business. While the results of legal matters are inherently uncertain, we do not believe the ultimate resolution of these matters, either individually or in aggregate, will have a material adverse effect on our business, financial position, results of operations or cash flows. Letters of Credit We had $8.1 million and $25.5 million of secured letters of credit outstanding as of September 30, 2020 and December 31, 2019. These primarily relate to our office space leases and are fully collateralized by certificates of deposit which we record in prepaid expenses and other current assets or restricted cash in our condensed consolidated balance sheets based on the term of the remaining restriction.
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Share-Based Compensation |
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| Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Compensation | Share-Based Compensation Equity Incentive Plan In June 2009, our board of directors adopted and approved our 2009 Plan, which provides for the issuance of stock options, RSAs and RSUs to qualified employees, directors and consultants. Stock options granted under our 2009 Stock Plan have a maximum life of 10 years and an exercise price not less than 100% of the fair market value of our common stock on the date of grant. RSUs granted under our 2009 Plan have a maximum life of seven years. No shares of our common stock were reserved for future issuance under our 2009 Plan as of September 30, 2020. Our 2019 Plan became effective upon closing of our IPO and succeeds our 2009 Plan. Our 2019 Plan provides for the issuance of stock options, RSAs, RSUs and other equity- or cash-based awards to qualified employees, directors and consultants. Stock options granted under our 2019 Plan have a maximum life of 10 years and an exercise price not less than 100% of the fair market value of our common stock on the date of grant. 100,443,058 shares of our Class A common stock were reserved for future issuance under our 2019 Plan as of September 30, 2020. The number of shares of our Class A common stock available for issuance under the 2019 Plan will be increased by the number of shares of our Class B common stock subject to awards outstanding under our 2009 Plan as of the closing of our IPO that would, but for the terms of the 2019 Plan, have returned to the share reserves of the 2009 Plan pursuant to the terms of such awards, including as the result of forfeiture, repurchase, expiration or retention by us in order to satisfy an award’s exercise price or tax withholding obligations. In addition, the number of shares of our Class A common stock reserved for issuance under our 2019 Plan will automatically increase on the first day of each fiscal year, commencing on January 1, 2020 and ending on (and including) January 1, 2029, in an amount equal to 5% of the total number of shares of our Class A common stock and our Class B common stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by our board of directors. Stock Option Activity Stock option activity during the nine months ended September 30, 2020, was as follows (in thousands, except per share amounts):
(1)We calculate intrinsic value based on the difference between the exercise price of in-the-money-stock options and the fair value of our common stock as of the respective balance sheet date. The total grant-date fair value of stock options vested during the nine months ended September 30, 2020 and 2019, was $2.5 million and $2.1 million, respectively. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2020 and 2019, was $719 million and $5.8 million, respectively. The total grant-date fair value of stock options granted during the nine months ended September 30, 2020 was not material. No stock options were granted during the nine months ended September 30, 2019. Restricted Stock Unit and Restricted Stock Award Activity RSU and RSA activity during the nine months ended September 30, 2020, was as follows (in thousands, except per share amounts):
Share-Based Compensation Share-based compensation expense during the three and nine months ended September 30, 2020 and 2019, was as follows (in thousands):
As of September 30, 2020, we had $764.3 million of unrecognized share-based compensation expense, which we expect to recognize over a weighted-average period of 3.1 years. |
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Net Loss Per Share Attributable to Common Stockholders |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders We present net loss per share attributable to common stockholders using the two-class method required for multiple classes of common stock and participating securities. Holders of our Class A and Class B common stock have identical rights except with respect to voting, conversion and transfer rights and therefore share equally in our net losses. Prior to our IPO, we considered all series of our redeemable convertible preferred stock participating securities. We have not allocated net loss attributable to common stockholders to our redeemable convertible preferred stock because the holders of our redeemable convertible preferred stock are not contractually obligated to share in our losses. We calculate basic net loss per share attributable to common stockholders by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share attributable to common stockholders gives effect to all potential shares of common stock, including common stock issuable upon conversion of our redeemable convertible preferred stock and redeemable convertible preferred stock warrants, stock options, RSAs, RSUs and common stock warrants to the extent these are dilutive. We calculated basic and diluted net loss per share attributable to common stockholders as follows (in thousands, except per share amounts):
Basic net loss per share is the same as diluted net loss per share because we reported net losses for all periods presented. We excluded the following weighted-average potential shares of common stock from our calculation of diluted net loss per share attributable to common stockholders because these would be anti-dilutive (in thousands):
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Income Taxes |
9 Months Ended |
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Sep. 30, 2020 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes We determine our income tax provision for interim periods using an estimate of our annual effective tax rate adjusted for discrete items occurring during the periods presented. The primary difference between our effective tax rate and the federal statutory rate is the full valuation allowance we have established on our federal, state and foreign net operating losses and credits. Income taxes from international operations are not material for the three and nine months ended September 30, 2020 and 2019. On June 7, 2019, a three-judge panel from the U.S. Court of Appeals for the Ninth Circuit overturned the U.S. Tax Court's decision in Altera Corp. v. Commissioner and upheld the portion of the Treasury regulations under Section 482 of the Internal Revenue Code that requires related parties in a cost-sharing arrangement to share expenses related to share-based compensation. As a result of this decision, our gross unrecognized tax benefits increased to reflect the impact of including share-based compensation in cost-sharing arrangements. Recognizing our gross unrecognized tax benefits would not affect our effective tax rate as their recognition would be offset by the reversal of the related deferred tax assets, which are subject to a full valuation allowance. On July 22, 2019, the taxpayer filed a petition for a rehearing before the full Ninth Circuit and the request was denied on November 12, 2019. On February 10, 2020, the taxpayer filed a petition to appeal the decision to the Supreme Court and on June 22, 2020, the Supreme Court denied the petition. As a result of the Supreme Court’s action, our U.S. deferred tax asset related to net operating losses was reduced by $24.4 million and we no longer consider this to be an uncertain tax position. There is no impact on our effective tax rate for the three and nine months ended September 30, 2020, due to our full valuation allowance against our deferred tax assets.
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Geographical Information |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Geographical Information | Geographical Information Revenue disaggregated by geography based on our customers’ billing addresses is as follows (in thousands):
(1)No individual country other than the United States exceeded 10% of our total revenue for any period presented. Property and equipment, net and operating lease right-of-use assets by geography is as follows (in thousands):
(1)No individual country other than the United States exceeded 10% of our total property and equipment, net and operating lease right-of-use assets for any period presented.
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Description of Business and Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation | We prepared the accompanying condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). The condensed consolidated financial statements include the accounts of Pinterest, Inc. and its wholly owned subsidiaries. We have eliminated all intercompany balances and transactions. The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited financial statements as of that date. We have condensed or omitted certain information and notes normally included in complete financial statements prepared in accordance with GAAP. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2019, which are included in our Annual Report on Form 10-K. In our opinion, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the results for the interim periods presented, but they are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2020.
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| Consolidation | We prepared the accompanying condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). The condensed consolidated financial statements include the accounts of Pinterest, Inc. and its wholly owned subsidiaries. We have eliminated all intercompany balances and transactions. The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited financial statements as of that date. We have condensed or omitted certain information and notes normally included in complete financial statements prepared in accordance with GAAP. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2019, which are included in our Annual Report on Form 10-K. In our opinion, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the results for the interim periods presented, but they are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2020.
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| Reclassifications | We have reclassified certain amounts in prior periods to conform with current presentation. |
| Use of Estimates | Preparing our condensed consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect amounts reported in the condensed consolidated financial statements and accompanying notes. We base these estimates and judgments on historical experience and various other assumptions that we consider reasonable. GAAP requires us to make estimates and assumptions in several areas, including the fair values of financial instruments, assets acquired and liabilities assumed through business combinations, common stock prior to our initial public offering ("IPO"), share-based awards, and contingencies as well as the collectability of our accounts receivable, the useful lives of our intangible assets and property and equipment, the incremental borrowing rate we use to determine our operating lease liabilities, and revenue recognition, among others. Actual results could differ materially from these estimates and judgments. Many of our estimates require increased judgment due to the significant volatility, uncertainty and economic disruption of the recent global COVID-19 pandemic. We continue to monitor the effects of the COVID-19 pandemic, and our estimates and judgments may change materially as new events occur or additional information becomes available to us.
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| Segments | We operate as a single operating segment. Our chief operating decision maker is our Chief Executive Officer, who reviews financial information presented on a consolidated basis, accompanied by disaggregated information about our revenue, for purposes of making operating decisions, assessing financial performance and allocating resources. |
| Revenue Recognition | We generate revenue by delivering ads on our website and mobile application. We recognize revenue only after transferring control of promised goods or services to customers, which occurs when a user clicks on an ad contracted on a cost per click (“CPC”) basis, views an ad contracted on a cost per thousand impressions (“CPM”) basis or views a video ad contracted on a cost per view ("CPV") basis. We typically bill customers on a CPC, CPM or CPV basis, and our payment terms vary by customer type and location. The term between billing and payment due dates is not significant. We occasionally offer customers free ad inventory, and revenue is recognized only after satisfying our contractual performance obligations. When contracts with our customers contain multiple performance obligations, we allocate the overall transaction price, which is the amount of consideration to which we expect to be entitled in exchange for promised goods or services, to each of the distinct performance obligations based on their relative standalone selling prices. We generally determine standalone selling prices based on the effective price charged per contracted click, impression or view and we do not disclose the value of unsatisfied performance obligations because the original expected duration of our contracts is generally less than one year. We record sales commissions in sales and marketing expense as incurred because we would amortize these over a period of less than one year.
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| Share-Based Compensation | Restricted stock units ("RSUs") granted under our 2009 Stock Plan (the "2009 Plan") are subject to both a service condition, which is typically satisfied over four years, and a performance condition, which was deemed satisfied upon the pricing of our IPO. We did not record any share-based compensation expense for our RSUs prior to our IPO because the performance condition had not yet been satisfied. Upon pricing our IPO, we recorded cumulative share-based compensation expense using the accelerated attribution method for those RSUs granted under our 2009 Plan for which the service condition had been satisfied at that date. We will record the remaining unrecognized share-based compensation expense over the remainder of the requisite service period. RSUs and Restricted Stock Awards ("RSAs") granted under our 2019 Omnibus Incentive Plan (the "2019 Plan") are subject only to a service condition, which is typically satisfied over four years. We record share-based compensation expense for these RSUs and RSAs on a straight-line basis over the requisite service period. We measure RSUs and RSAs based on the fair market value of our common stock on the grant date, and we account for forfeitures as they occur.
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| Leases and Operating Lease Incremental Borrowing Rate | We lease office space under operating leases with expiration dates through 2033. We determine whether an arrangement constitutes a lease and record lease liabilities and right-of-use assets on our condensed consolidated balance sheets at lease commencement. We measure lease liabilities based on the present value of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or our incremental borrowing rate, which is the estimated rate we would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. We estimate our incremental borrowing rate based on an analysis of publicly traded debt securities of companies with credit and financial profiles similar to our own. We measure right-of-use assets based on the corresponding lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs we incur and (iii) tenant incentives under the lease. We begin recognizing rent expense when the lessor makes the underlying asset available to us, we do not assume renewals or early terminations unless we are reasonably certain to exercise these options at commencement, and we do not allocate consideration between lease and non-lease components. For short-term leases, we record rent expense in our condensed consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred.
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| Recently Adopted Accounting Pronouncement | In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets not held at fair value. ASU 2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model which will result in earlier recognition of credit losses. We adopted ASU 2016-13 as of January 1, 2020, using the modified retrospective method, and while the effects of adoption on our condensed consolidated financial statements were not material, we continue to monitor the effects of the COVID-19 pandemic on expected credit losses. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles for income taxes. We elected to early adopt ASU 2019-12 effective as of January 1, 2020, and the effects of adoption on our condensed consolidated financial statements were not material.
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Fair Value of Financial Instruments (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Values of Financial Instruments Measured on a Recurring Basis | The fair values of the financial instruments we measure at fair value on a recurring basis are as follows (in thousands):
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| Fair Value of Marketable Securities by Contractual Maturity | The fair value of our marketable securities by contractual maturity is as follows (in thousands):
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Share-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Option Activity | Stock option activity during the nine months ended September 30, 2020, was as follows (in thousands, except per share amounts):
(1)We calculate intrinsic value based on the difference between the exercise price of in-the-money-stock options and the fair value of our common stock as of the respective balance sheet date.
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| Restricted Stock Unit Activity | RSU and RSA activity during the nine months ended September 30, 2020, was as follows (in thousands, except per share amounts):
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| Share-Based Compensation Expense | Share-based compensation expense during the three and nine months ended September 30, 2020 and 2019, was as follows (in thousands):
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Net Loss Per Share Attributable to Common Stockholders (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Calculation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | We calculated basic and diluted net loss per share attributable to common stockholders as follows (in thousands, except per share amounts):
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| Weighted-Average Anti-Dilutive Shares of Common Stock Excluded from the Calculation of Diluted Net Loss Per Share | Basic net loss per share is the same as diluted net loss per share because we reported net losses for all periods presented. We excluded the following weighted-average potential shares of common stock from our calculation of diluted net loss per share attributable to common stockholders because these would be anti-dilutive (in thousands):
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Geographical Information (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue Disaggregated by Geography | Revenue disaggregated by geography based on our customers’ billing addresses is as follows (in thousands):
(1)No individual country other than the United States exceeded 10% of our total revenue for any period presented.
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| Property and Equipment, Net and Operating Lease Right-of-Use Assets by Geography | Property and equipment, net and operating lease right-of-use assets by geography is as follows (in thousands):
(1)No individual country other than the United States exceeded 10% of our total property and equipment, net and operating lease right-of-use assets for any period presented.
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Description of Business and Summary of Significant Accounting Policies (Details) |
9 Months Ended |
|---|---|
|
Sep. 30, 2020
segment
| |
| Summary of Significant Accounting Policies [Line Items] | |
| Number of operating segments | 1 |
| RSUs | 2009 Plan | |
| Summary of Significant Accounting Policies [Line Items] | |
| Service period | 4 years |
| Unvested restricted stock units and restricted stock awards | 2019 Plan | |
| Summary of Significant Accounting Policies [Line Items] | |
| Service period | 4 years |
Fair Value of Financial Instruments - Fair Value of Marketable Securities by Contractual Maturity (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
|
|---|---|
| Cash and Cash Equivalents [Abstract] | |
| Due in one year or less | $ 731,474 |
| Due after one to five years | 264,918 |
| Total | $ 996,392 |
Commitments and Contingencies (Details) ft² in Thousands, $ in Millions |
1 Months Ended | |||
|---|---|---|---|---|
|
Aug. 31, 2020
USD ($)
|
Sep. 30, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
ft²
|
|
| Commitments and Contingencies Disclosure [Abstract] | ||||
| Area of office space (in sqft) | ft² | 490 | |||
| One-time payment for lease termination | $ 89.5 | |||
| Noncancelable minimum lease payments not yet commenced | $ 440.0 | |||
| Secured letters of credit outstanding | $ 8.1 | $ 25.5 |
Share-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
| Shares | |||
| Beginning balance (in shares) | 56,966,000 | ||
| Granted (in shares) | 1,130,000 | 0 | |
| Exercised (in shares) | (28,855,000) | ||
| Ending balance (in shares) | 29,241,000 | ||
| Exercisable (in shares) | 28,322,000 | ||
| Weighted-Average Exercise Price | |||
| Beginning balance (in dollars per share) | $ 2.25 | ||
| Granted (in dollars per share) | 22.35 | ||
| Exercised (in dollars per share) | 2.25 | ||
| Ending balance (in dollars per share) | 3.03 | ||
| Exercisable (in dollars per share) | $ 2.41 | ||
| Weighted-Average Remaining Contractual Term, Outstanding | 3 years 1 month 6 days | 3 years 6 months | |
| Weighted-Average Remaining Contractual Term, Exercisable | 2 years 10 months 24 days | ||
| Aggregate Intrinsic Value, Outstanding | $ 1,124,964 | $ 933,299 | |
| Aggregate Intrinsic Value, Exercisable | $ 1,107,358 | ||
Share-Based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units and Restricted Stock Awards Outstanding shares in Thousands |
9 Months Ended |
|---|---|
|
Sep. 30, 2020
$ / shares
shares
| |
| Shares | |
| Beginning balance (in shares) | shares | 56,791 |
| Granted (in shares) | shares | 29,060 |
| Released (in shares) | shares | (17,105) |
| Forfeited (in shares) | shares | (9,111) |
| Ending balance (in shares) | shares | 59,635 |
| Weighted Average Grant Date Fair Value | |
| Beginning balance (in dollars per share) | $ / shares | $ 20.19 |
| Granted (in dollars per share) | $ / shares | 17.99 |
| Released (in dollars per share) | $ / shares | 19.39 |
| Forfeited (in dollars per share) | $ / shares | 18.82 |
| Ending balance (in dollars per share) | $ / shares | $ 19.55 |
Income Taxes (Details) $ in Millions |
Jun. 22, 2020
USD ($)
|
|---|---|
| Income Tax Disclosure [Abstract] | |
| Reduction in deferred tax assets related to net operating losses | $ 24.4 |
Geographical Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
| Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
| Total revenue | $ 442,616 | $ 279,703 | $ 987,041 | $ 742,863 | |
| Total property and equipment, net and operating lease right-of-use assets | 241,097 | 241,097 | $ 280,243 | ||
| United States | |||||
| Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
| Total revenue | 367,998 | 247,222 | 827,220 | 660,754 | |
| Total property and equipment, net and operating lease right-of-use assets | 227,517 | 227,517 | 266,763 | ||
| International | |||||
| Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
| Total revenue | 74,618 | $ 32,481 | 159,821 | $ 82,109 | |
| Total property and equipment, net and operating lease right-of-use assets | $ 13,580 | $ 13,580 | $ 13,480 | ||