Notice of 2022
Annual Meeting
& Proxy Statement
2021 Annual
Report
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To our stockholders:
You are cordially invited to attend the 2022 annual meeting of stockholders (‘‘annual meeting’’) of
Pinterest, Inc., a Delaware corporation (‘‘Pinterest’’ or the ‘‘company’’). The annual meeting will be held
exclusively online at www.virtualshareholdermeeting.com/PINS2022 on Thursday, May 26, 2022, at
8:00 a.m. Pacific Time, for the following purposes:
1. To elect the three Class III nominees for director named in the accompanying proxy statement to hold
office until the 2025 annual meeting and until their successors have been duly elected and qualified,
or until their office is otherwise vacated.
2. To ratify the audit committee’s selection of Ernst & Young LLP as the company’s independent
registered public accounting firm for the fiscal year 2022.
3. To approve, on an advisory non-binding basis, the compensation of our named executive officers
(‘‘say-on-pay’’).
4. To conduct any other business properly brought before the annual meeting.
These proposals, as well as instructions for accessing the virtual annual meeting, are more fully described
in the accompanying proxy statement and a list of registered stockholders as of the record date will be
accessible during the meeting at www.virtualshareholdermeeting.com/PINS2022. The record date for the
annual meeting is March 30, 2022. Only stockholders of record at the close of business on that date may
vote at the annual meeting or any adjournment thereof.
By Order of the Board of Directors
/s/ Christine Flores
Christine Flores
General Counsel & Corporate Secretary
San Francisco, California
April 13, 2022
Important notice regarding the availability of proxy materials for Pinterest’s 2022 annual meeting
of stockholders: The notice, proxy statement and annual report are available at www.proxyvote.com.
TABLE OF CONTENTS
PROPOSAL 1: ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Board Structure and Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Director Selection and Recruitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Board Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Governance Practices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Director Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR . . . . . . . . . . . . . . . . . .
Principal Accountant Fees and Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pre-Approval Policies and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROPOSAL 3: ADVISORY NON-BINDING VOTE ON OUR NAMED EXECUTIVE OFFICERS'
COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation Tables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CEO PAY RATIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EQUITY COMPENSATION PLAN INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . . . . . . . . . . . . . .
Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Delinquent Section 16(a) Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholder Proposals for the 2023 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VOTING AND ANNUAL MEETING INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Meeting Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Voting Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proxy Materials Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Note about our websites and reports and forward-looking statements: Website references are provided in this proxy statement
for convenience only. The content of any referenced websites or reports, including any other websites or reports referenced or
discussed in this proxy statement, are not deemed to be part of, nor incorporated by reference into, this proxy statement. We
assume no liability for the content contained on the referenced websites.
This proxy statement may contain ‘‘forward-looking statements’’ within the meaning of the ‘‘safe harbor’’ provisions of the Private
Securities Litigation Reform Act of 1995, which statements are subject to substantial risks and uncertainties and are based on
estimates and assumptions. All statements other than statements of historical facts included in the proxy statement, including
statements about the company’s goals, progress or expectations with respect to corporate responsibility, sustainability, corporate
governance, executive compensation and other matters, are forward-looking statements. In some cases, you can identify
forward-looking statements by terms such as ‘‘may,’’ ‘‘might,’’ ‘‘will,’’ ‘‘objective,’’ ‘‘intend,’’ ‘‘should,’’ ‘‘could,’’ ‘‘can,’’ ‘‘would,’’ ‘‘expect,’’
‘‘believe,’’ ‘‘design,’’ ‘‘estimate,’’ ‘‘predict,’’ ‘‘potential,’’ ‘‘plan’’ or the negative of these terms, and similar expressions intended to
identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that could
cause our actual results to differ materially from the forward-looking statements expressed or implied in this proxy statement. Such
risks, uncertainties and other factors include those risks described in ‘‘Risk Factors’’ and ‘‘Management’s Discussion and Analysis of
Financial Condition and Results of Operations’’ in the company’s most recent Annual Report on Form 10-K filed with the U.S.
Securities and Exchange Commission (‘‘SEC’’) and other subsequent documents we file with the SEC.
Headquarters | 505 Brannan Street, San Francisco, California 94107 | (415) 762-7100
Investor Relations Website | investor.pinterestinc.com
PROXY STATEMENT FOR THE 2022
ANNUAL MEETING OF STOCKHOLDERS
To Be Held Online at 8:00 a.m. Pacific Time on Thursday, May 26, 2022
This proxy statement is furnished in connection with the solicitation of your proxy by our board of directors
(‘‘board’’) to vote at the 2022 annual meeting of stockholders (‘‘annual meeting’’), including at any
adjournments or postponements of the annual meeting. This proxy statement contains information to be
voted on at the annual meeting and certain other information required by Securities and Exchange
Commission (‘‘SEC’’) rules. In accordance with SEC rules, we are making our proxy materials available at
www.proxyvote.com with an option to request a printed set be mailed to you. We expect to begin mailing
a notice of internet availability of proxy materials on April 13, 2022, to all stockholders of record entitled to
vote at the annual meeting. This notice contains instructions for viewing the proxy materials and voting
online and requesting a printed set of proxy materials.
You are cordially invited to attend the annual meeting on Thursday, May 26, 2022, at 8:00 a.m. Pacific Time,
which we are holding exclusively online via live webcast at www.virtualshareholdermeeting.com/PINS2022.
Whether or not you expect to attend the annual meeting, please vote online, as instructed in these materials,
as promptly as possible in order to ensure your representation at the annual meeting. Even if you have voted
by proxy, you may still vote at the virtual annual meeting by following the instructions under ‘‘Voting and Annual
Meeting Information’’.
1
PROPOSAL 1: ELECTION OF DIRECTORS
Our board is currently comprised of nine members. In accordance with our amended and restated
certificate of incorporation, our board is divided into three staggered classes of directors. At the annual
meeting, three Class III directors will be elected for a three-year term. Each director’s term continues until
the election and qualification of his or her successor, or until their office is otherwise vacated. Each of the
nominees standing for election at the annual meeting currently serves as a director. Two of the
three director nominees, namely, Leslie Kilgore and Ben Silbermann, were elected by our stockholders
prior to our initial public offering in April 2019 (‘‘IPO’’) pursuant to the provisions of a voting agreement
entered into by certain stockholders that terminated upon the completion of our IPO. In October 2020, our
board appointed Salaam Coleman Smith as a Class III director until the annual stockholders’ meeting in
2022. Ms. Smith was recommended to our nominating and corporate governance committee (which we
refer to throughout this proxy statement as the ‘‘governance committee’’) by an individual consultant of the
company.
Upon recommendation by our governance committee, the board has nominated Leslie Kilgore, Ben
Silbermann and Salaam Coleman Smith for election for a term of three years (through the 2025 annual
stockholders' meeting) and until their successors have been duly elected and qualified, or until their office
is otherwise vacated.
THE BOARD RECOMMENDS A VOTE FOR EACH DIRECTOR NOMINEE
2
Corporate Governance
Our Board of Directors
The following table provides summary information about each of our current directors, including the three
nominees for election at the annual meeting.
Name
Class Age
Director
Since
Term
Expires
In
Jeffrey Jordan
Leslie Kilgore
Jeremy Levine
Gokul Rajaram
Fredric Reynolds
Evan Sharp
Benjamin
Silbermann
Salaam Coleman
Smith
Andrea Wishom***
I
III
I
I
II
II
III
III
II
63
2011
2023
56
48
2019
2022
2011
2023
47
2020
2023
71
39
39
52
52
2017
2024
2019
2024
2008
2022
2020
2022
2020
2024
Other
Public
Company
Boards
Airbnb;
Accolade
Our Committee
Membership
Governance Committee
Netflix;
Nextdoor
Compensation Committee*
(chair); Audit Committee
Shopify
The Trade
Desk;
Coinbase
Governance Committee
(chair)
Compensation Committee
Mondelez
International**;
Raytheon
Technologies
Audit Committee (chair)
None
None
None
None
Gap; Enjoy
Technology
Audit Committee;
Governance Committee
Nextdoor
Compensation Committee
Principal
Occupation
Managing
Partner,
Andreessen
Horowitz
Former Chief
Marketing Officer,
Netflix
Partner,
Bessemer
Venture Partners
Corporate
Development and
Strategy Lead,
DoorDash
Former EVP &
CFO, CBS
Corporation
Co-Founder &
Advisor, Pinterest
Co-Founder,
Chairman,
President & CEO,
Pinterest
Former EVP, ABC
Family
President,
Skywalker
Holdings
(*)
Our talent development and compensation committee is referred to as ‘‘compensation committee’’ throughout this proxy
statement.
(**) Mondelez International announced on April 6, 2022 that Mr. Reynolds will not be standing for re-election on their board at their
annual meeting on May 18, 2022.
(***)
Lead Independent Director.
3
Board Diversity
Our board is composed of a diverse group of individuals, with diverse backgrounds, experience and skills
relevant to our company. Many of the directors have senior leadership experience at major U.S. and
international companies. In these positions, they have also gained experience in areas such as
management, financial planning, public company governance, sales and marketing, media and content,
e-commerce and international business. Many of our directors have experience serving on boards and
board committees of other public companies, and have an understanding of corporate governance
practices and trends and different business processes, challenges and strategies. Further, our directors
also have other experience that makes them valuable members of the board, including experience in
established or growing technology companies.
The diversity, skills and experience of our directors as described below, provide us with a diverse range of
perspectives and judgment necessary to guide our strategies and monitor their execution.
The following charts reflect the age, gender and independence of the members of our board continuing in
office following the annual meeting, assuming the election of all nominees:
Age
Gender
Independence
2
61+
3
51-60
4
<51
3
Female
2
Non-independent
6
Male
7
Independent
4
The following reflects the experience and expertise of the members of our board continuing in office
following the annual meeting, assuming the election of all nominees:
7
7
7
6
5
9
7
5
Class III Director Nominees for Election at the 2022 Annual Meeting
Leslie Kilgore
Former Chief Marketing Officer, Netflix, Inc.
Director since 2019
Leslie Kilgore served as Chief Marketing Officer of
Netflix, Inc., an online entertainment service, from
2000 to 2012. From 1999 to 2000, she served as
Director of Marketing of Amazon.com, Inc., an
online retail company. Ms. Kilgore held various
positions, including Brand Manager, at The Procter
& Gamble Company, a manufacturer and marketer
of consumer products, from 1992 to 1999.
Ms. Kilgore served on the board of LinkedIn
Corporation from 2010 to 2016 and Medallia, Inc.
from July 2015 to October 2021. In addition to her
public company boards, she currently serves on
the board of Discord Inc.
Our committees Compensation Committee
(chair); Audit Committee (member)
Other current public boards Netflix, Inc.
(member of audit committee); Nextdoor Holdings,
Inc. (chair of compensation committee)
Education Master of Business Administration,
Stanford University Graduate School of Business;
Bachelor of Science, Wharton School of Business
at the University of Pennsylvania
Relevant experience Extensive experience as a
marketing executive with internet retailers and
consumer product companies and experience as a
board member of public and private companies
5
Benjamin Silbermann
Co-Founder, Chairman, President and CEO, Pinterest
Director since 2008
Benjamin Silbermann is a Co-Founder of Pinterest
and has served as our Chief Executive Officer
since 2008 and also our President since 2012.
Prior to co-founding Pinterest, Mr. Silbermann
worked at Google, a technology company, from
2006 to 2008.
Our committees None
Other current public boards None
Education Bachelor of Arts, Yale University
Relevant experience Deep knowledge and
understanding of our company, strategy and
business as our President and CEO and
experience with product development
Salaam Coleman Smith
Former EVP, The Walt Disney’s ABC Television Group
Director since 2020
Salaam Coleman Smith served as Executive Vice
President at The Walt Disney’s ABC Television
Group, a multinational broadcast television group
from 2014 to 2016, overseeing Strategy and
Programming for ABC Family’s Freeform channel.
Prior to joining The Walt Disney Company,
Ms. Smith worked at Comcast NBCUniversal, a
multinational media company since 2003, where
she served as President of Style Network from
2008 to 2013. Prior to joining Comcast
NBCUniversal, Ms. Smith worked at Viacom Inc., a
multinational mass media conglomerate for nearly
ten years where she served as a senior executive
within MTV Networks International Division and
helped oversee Nickelodeon’s global expansion in
Europe, Asia, and Latin America. Ms. Smith has
served as a board member for several non-profit
organizations, including Women in Cable
Telecommunications and Dress For Success. In
addition to her public boards, she also serves of
the board of Scopely, an online gaming company
since December 2021.
Our committees Audit Committee (member);
Governance Committee (member)
Other current public boards Gap, Inc. (member
of compensation and management development
committee); Enjoy Technology Inc. (chair of
nominating and corporate governance committee)
Education Bachelor of Science in Industrial
Engineering, Stanford University
Relevant experience Strong expertise in global
media, multi-platform content, brand development,
strategic planning, financial management,
consumer-centric insights and C-level
management experience
6
Class II Directors Continuing in Office Until the 2024 Annual Meeting
Fredric Reynolds
Former Executive Vice President and Chief Financial Officer, CBS Corporation
Director since 2017
Fredric Reynolds served as Executive Vice
President and Chief Financial Officer of CBS
Corporation, a mass media company, from 2006 to
2009. From 2001 to 2005, he served as President
and Chief Executive Officer of Viacom Television
Stations Group and as Executive Vice President
and Chief Financial Officer of Viacom Inc., a mass
media company, from 2000 to 2001. He also
served as Executive Vice President and Chief
Financial Officer of Westinghouse Electric
Corporation, a predecessor of CBS Corporation.
Prior to that, Mr. Reynolds held several positions
at PepsiCo, a food and beverage corporation, for
twelve years, including Chief Financial Officer or
Financial Officer at Pizza Hut, Pepsi Cola
International, Kentucky Fried Chicken Worldwide
and Frito Lay. Mr. Reynolds served on the board of
AOL, Inc. from 2009 to 2015, Hess Corporation
from 2013 to 2019 and MGM Corporation from
January 2010 to March 2022.
Our committees Audit Committee (chair)
Other current public boards Mondelez
International, Inc. (chair of audit committee and
member of finance committee)*; Raytheon
Technologies (chair of audit committee, member of
governance and public policy committee and
member of compensation committee)
Education Bachelor in Business Administration,
University of Miami; Certified Public Accountant
Relevant experience Extensive financial,
leadership and media expertise, management
experience in a broad range of companies and
service on the board of public companies
*Mondelez International announced on April 6, 2022 that Mr. Reynolds will not be standing for re-election on their board at their
annual meeting on May 18, 2022.
Evan Sharp
Co-Founder and Advisor, Pinterest
Director since 2019
Evan Sharp is a Co-Founder of Pinterest and
currently serves as a consultant to Pinterest.
Previously, he served as our Chief Design &
Creative Officer until October, 2021. While
employed at Pinterest, he oversaw the creative,
product and design teams since 2011. He was
previously a product designer at Facebook, a
social media company, from 2010 to 2011. Since
October 2021, he has served as a consultant at
LoveFrom, a design firm.
Andrea Wishom
President, Skywalker Holdings LLC
Director since 2020; Lead Independent Director
Andrea Wishom has served as President of
Skywalker Holdings, LLC, a private holding
company and family office since November 2017.
She oversees over a billion dollars in assets for
various business units, human resources, finance,
and all philanthropic and creative aspects for the
Our committees None
Other current public boards None
Education Bachelor of Arts in History, University
of Chicago
Relevant experience Deep knowledge and
understanding of our business as a co-founder
and experience with product development and
design
Our committees Compensation Committee
(member)
Other current public boards Nextdoor Holdings,
Inc. (member of compensation committee)
7
company. Before joining Skywalker, Ms. Wishom
spent over 20 years at Harpo Productions, an
American multimedia production company. At
Harpo Productions she held various production,
programming, development and executive roles for
The Oprah Winfrey Show, Harpo Studios and
OWN: The Oprah Winfrey Network and most
recently as the Executive Vice President. In
addition to her public company board, Ms. Wishom
currently serves on the board of Tory Burch LLC.
Education Bachelor of Arts in English, University
of California, Berkeley
Relevant experience Extensive experience in
media industry and C-suite-level management
experience
8
Class I Directors Continuing in Office Until the 2023 Annual Meeting
Jeffrey Jordan
Managing Partner, Andreessen Horowitz
Director since 2011
Jeffrey Jordan has served at Andreessen
Horowitz, a venture capital firm, since 2011 and
most recently as a Managing Partner. Previously,
Mr. Jordan served as President and Chief
Executive Officer of OpenTable, Inc., an online
restaurant reservation service company, from 2007
to 2011. He served as President of PayPal, Inc.,
an internet-based payment system company then
owned by internet retail company eBay Inc., from
2004 to 2006, and as Senior Vice President and
General Manager of eBay North America from
1999 to 2004. He also served as Chief Financial
Officer of Hollywood Entertainment, a video rental
company and as President of its subsidiary,
Reel.com. Previously, Mr. Jordan served in various
capacities at The Walt Disney Company, an
entertainment company, for eight years, most
recently as Senior Vice President and Chief
Financial Officer of The Disney Store Worldwide.
Prior to that, he worked for the Boston Consulting
Group, Inc., a management consulting firm.
Mr. Jordan currently serves on the board of
several private companies, including Instacart and
previously served on the board of OpenTable, Inc.
from 2007 to 2013.
Jeremy Levine
Partner, Bessemer Venture Partners
Director since 2011
Jeremy Levine has served as a partner at
Bessemer Venture Partners, a venture capital firm,
since 2001, where his investment experience
includes entrepreneurial startups and high growth
companies including consumer internet, consumer
software and business software and services.
Prior to joining Bessemer, Mr. Levine was Vice
President of Operations at Dash.com Inc., an
internet software publisher, from 1999 to 2001.
Prior to Dash, Mr. Levine was an Associate at AEA
Investors, a management buyout firm, where he
specialized in consumer products and light
industries, from 1997 to 1999. Previously,
Mr. Levine was with McKinsey & Company, a
management consultant firm, as a management
consultant from 1995 to 1997. Mr. Levine
previously served on the board of directors of
MINDBODY Inc. from 2010 to 2017 and Yelp from
2005 to 2019. Mr. Levine currently serves on the
board of many private companies.
Our committees Governance Committee
(member)
Other current public boards Airbnb, Inc. (chair of
nominating and corporate governance committee
and member of the audit, risk and compliance
committee); Accolade, Inc. (member of
compensation committee)
Education Master of Business Administration,
Stanford University Graduate School of Business;
Bachelor of Arts, Amherst College
Relevant experience Extensive experience as a
venture capitalist and as a C-suite-level officer and
director of technology companies
Our committees Governance Committee (chair)
Other current public boards Shopify, Inc.
(member of nominating and governance
committee)
Education Bachelor of Science, Duke University
Relevant experience Extensive experience with
technology companies, serving on the boards of
directors of public and private companies, and
experience as a venture capitalist
9
Gokul Rajaram
Corporate Development and Strategy Lead, DoorDash, Inc.
Director since 2020
Gokul Rajaram has served in various roles at
DoorDash, a food ordering service, since
November 2019, most recently as their Corporate
Development and Strategy Lead. Previously, from
2013 to 2019, Mr. Rajaram led several product
development teams at Block, Inc. (previously
named Square, Inc.), a financial technology
company, most recently as the Caviar Lead. Prior
to Block, Inc., Mr. Rajaram served as Product
Director of Ads at Facebook, Inc., a social media
company, from 2010 to 2013. Previously,
Mr. Rajaram was Product Management Director
for Google AdSense, an online advertising
company. He previously served on the board of
RetailmeNot, Inc. and Course Hero, Inc.
Our committees Compensation Committee
(member)
Other current public boards The Trade Desk Inc.
(member of compensation committee and audit
committee); Coinbase Global Inc. (member of the
compensation committee)
Education Master of Computer Science, University
of Texas; Master of Business Administration, The
Massachusetts Institute of Technology; Bachelor of
Computer Science, Indian Institute of Technology,
Kanpur
Relevant experience Extensive experience with
product development and as an officer and director
of technology companies, including public
companies
Board Structure and Role
Our board is currently comprised of nine directors and is divided into three classes with each class
consisting of one-third of the total number of directors and each class having a three-year term.
Board Leadership Structure
Our Co-Founder, President and CEO, Benjamin Silbermann, currently serves as chairman of the board and
Andrea Wishom serves as lead independent director. Although our bylaws do not require that the positions of
chairman and CEO be combined, we believe that this structure is in the best interest of our company given
Mr. Silbermann's deep understanding of our business and culture, as well as his leadership in shaping and
driving the company’s strategic priorities and business plans. This structure also facilitates a regular flow of
information between management and the board and provides a clear chain of command. Our chairman,
amongst other things:
•
•
•
•
presides over meetings of the board;
consults with the lead independent director on the agenda for board meetings;
consults, as needed, on evaluating and recommending candidates for election to the board; and
oversees the activities of the board.
In addition, our corporate governance guidelines provide that one of our independent directors should
serve as our lead independent director at any time when our CEO serves as the chairman or if the
chairman is not otherwise independent. We have structured the lead independent director role in a
manner that we believe reinforces the independence of the board and serves as an effective balance to a
combined chair and CEO. Among other things, the lead independent director:
•
•
presides over meetings of the board at which the chairman is not present, including executive
sessions of our independent directors;
coordinates the activities of the other independent directors, including establishing the agenda
for executive sessions and meetings with other non-management directors;
10
•
•
•
consults with the chairman on the agenda for board meetings, board materials, meeting
calendars and schedules;
serves as a liaison between the chairman and independent directors; and
performs any additional duties as the board may otherwise determine.
The board believes that its selection of the current leadership structure is not impacted by the board's risk
oversight function and the board would be effective in overseeing risk, as described in the ‘‘Board’s Role
in Risk Oversight’’ section below, under a variety of leadership frameworks.
Board’s Role
The board is elected to oversee management and stockholders’ long-term interests. A key function of the
board is reviewing, approving (where appropriate) and actively monitoring management’s execution of the
company’s long-term strategic goals. The board actively engages on Pinterest matters throughout the
year, including at quarterly board meetings and meetings of each committee, where they receive updates
from key management personnel. The board and committees also have meetings as needed in between
their quarterly meetings. Directors also regularly engage with, and provide counsel to, management
through informal calls and meetings.
Our board oversees management’s performance on behalf of our stockholders. The primary
responsibilities of the board include: reviewing and overseeing the company's strategic direction and
objectives; succession planning for the CEO and key executives; overseeing the company's risk
exposure; overseeing the company's legal and regulatory compliance; monitoring the company's
accounting and financial reporting practices and controls; evaluating the board's composition,
performance and effectiveness, and overseeing the company's talent development and management.
Board’s Role in Risk Oversight
Our board is responsible for overseeing how we manage risk at Pinterest. This is carried out both at the
full board level and through each of the standing committees. The board and each committee meet
periodically with senior management to review risk oversight matters and periodically receive reports from
management on these matters. The full board is responsible for monitoring and assessing strategic risk
exposure, including determining the nature and level of risk appropriate for the company, and the
committees are responsible for monitoring and assessing risks inherent in their respective oversight
functions as follows:
• Our audit committee oversees our enterprise risk management program and significant
financial risk exposures and certain legal, regulatory and operational risk exposures, including
with respect to information security, data protection and privacy.
• Our talent development and compensation committee (which we refer to as ‘‘compensation
committee’’ throughout this proxy statement) oversees significant compensation and other
employee-related risk exposures, including risks and exposures associated with leadership
assessment, management succession planning, executive compensation programs and
arrangements and talent and leadership development and management, including matters
relating to the attraction, development and retention of a diverse and talented workforce.
• Our governance committee oversees significant governance risk exposures, including, with respect
to corporate governance, board effectiveness and board and leadership succession planning.
Director Independence
At least a majority of our board members, including all members of our audit, compensation and
governance committees, are required to be independent under New York Stock Exchange (‘‘NYSE’’)
listing rules. The board, with the assistance of the governance committee, considers all relevant facts and
circumstances when making its independence determinations. A substantial majority of our
board – seven out of nine directors – is independent.
11
The board has affirmatively determined that Mr. Jordan, Ms. Kilgore, Mr. Levine, Mr. Rajaram,
Mr. Reynolds, Ms. Smith and Ms. Wishom do not have relationships that would interfere with the exercise
of their independent judgment in carrying out the responsibilities as a director and each of these directors
is ‘‘independent’’ as that term is defined under the listing standards of the NYSE. Also, former director
Michelle Wilson was independent during the period she served on the board. In making these
determinations, the board considered the current and prior relationships that each of these directors has
with our company and all other facts and circumstances our board deemed relevant in determining their
independence, including the beneficial ownership of our capital stock by each non-employee director and
the transactions involving them. The board also took into account that Pinterest from time to time engages
in business in the ordinary course with entities where our directors are employed, serve on the board or
otherwise provide services to such entities.
Attendance at Board and Committee Meetings
We encourage all our directors to attend and actively participate in all meetings of the board and any
committees on which they serve. In 2021, the board held 15 meetings, and each director attended 75% or
more of the aggregate number of meetings of the board and of the committees on which he or she served
during the year. Directors are also encouraged to attend the annual stockholders' meetings. All the
directors then serving on the board attended the 2021 annual stockholders' meeting.
Director Selection and Recruitment
The governance committee is responsible for, among other things, overseeing succession planning for
directors and ensuring that we have a qualified board to oversee management’s execution of the
company’s strategy and safeguard the long-term interests of stockholders. In this regard, the governance
committee is charged with identifying, evaluating and recommending potential director candidates.
In identifying potential candidates for board membership, the governance committee considers
recommendations from directors, stockholders, management and others, including, from time to time,
executive search firms to assist it in locating qualified candidates. The governance committee does not
distinguish between nominees recommended by stockholders and other nominee recommendations.
Once potential director candidates are identified, the governance committee, with the assistance of
management, undertakes an extensive vetting process that considers each candidate’s diverse
background, experience, qualifications, independence and fit with the board’s priorities. As part of this
vetting process, the governance committee, as well as other members of the board and the CEO,
conducts a series of interviews with the candidates. If the governance committee determines that a
potential candidate meets the needs of the board and has the desired qualifications and experiences, it
recommends the candidate’s nomination or appointment to the full board for consideration.
The governance committee strives to maintain an engaged, independent board with broad and diverse
experience and judgment that is committed to representing the long-term interests of our stockholders.
The governance committee considers a wide range of factors when selecting and recruiting director
candidates, including achieving:
•
•
•
an experienced and qualified board. The governance committee seeks directors with a record
of accomplishment in their chosen fields that are relevant to our company and its industry.
diversity. The governance committee seeks candidates representing a diversity of occupational
and personal backgrounds, knowledge, skills, qualifications and viewpoints so that the board
provides effective oversight of the management of the company. The governance committee
reviews the board’s effectiveness in balancing these considerations when assessing the
composition of the board.
board refreshment. We believe that Pinterest benefits from fostering a mix of experienced
directors with a deep understanding of the company and its industry and those who bring fresh
perspectives. We have added three new directors to our board since our IPO in April 2019.
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•
•
ideal board size. The board has nine directors which includes three Class I directors, three
Class II directors and three Class III directors. The board believes this size works well as it
provides a sufficient number of directors on the board to achieve an appropriate mix of
experience and meet its oversight responsibilities, while promoting accountability and efficiency.
a board with strong personal attributes. We believe that all of our directors should possess
the following personal attributes: high integrity and good judgment, absence of legal or
regulatory impediments, independence of mind and strength of character to effectively represent
the best interests of all stockholders and provide practical insights and diverse perspectives,
ability to act in an oversight capacity, appreciation for the issues confronting a public company,
adequate time to devote to the board and its committees, and willingness to assume broad,
fiduciary responsibilities on behalf of all stockholders.
Stockholder Recommendations of Director Candidates
The governance committee considers director candidates recommended by stockholders. Stockholders
may recommend a candidate by writing to the Corporate Secretary at the company’s address listed on the
first page of this proxy statement, and including all information that our bylaws require for director
nominations.
Board Evaluation
The lead independent director and the governance committee oversee the performance and annual
self-evaluation process for the board and each standing committee, including conducting surveys of
director observations and suggestions on the effectiveness of the board. The governance committee chair
and lead independent director discuss with the board and may make recommendations to the chairman of
the board on any changes as they deem necessary.
Board Committees
Our board has established three standing committees - an audit committee, a compensation committee
and a governance committee, and the composition and responsibilities of each are described below.
The board has determined that each member of each committee is independent and meets the NYSE
and SEC independence standards for serving on such committee, as applicable. The board also has
determined that, in accordance with the SEC and NYSE rules, each member of the audit committee is
financially literate and Mr. Reynolds is an audit committee financial expert. Members serve on these
committees until their resignation or until otherwise determined by the board. The board has adopted
written charters for each of the audit committee, compensation committee and governance committee
which are available at https://investor.pinterestinc.com/governance/governance-documents. Each of the
committees has authority to engage legal counsel or other experts or consultants as it deems appropriate
to carry out its responsibilities. The board may establish other committees as it deems necessary or
appropriate from time to time.
13
Current members
Fredric Reynolds (chair)
Leslie Kilgore (member)
Salaam Coleman Smith (member)
Number of meetings held in 2021 12
Current members
Leslie Kilgore (chair)
Gokul Rajaram (member)
Andrea Wishom (member)
Number of meetings held in 2021 8
Audit Committee
The audit committee is primarily responsible for:
• overseeing the company's financial and
accounting reporting processes, including
disclosure controls, internal audit function,
internal controls and audits of the company's
consolidated financial statements;
• appointing or changing the company's
auditors and reviewing their independence,
qualification and performance;
• overseeing significant financial matters,
including tax planning, financial risk
exposure, dividends and share issuances
and repurchases; and
• overseeing the company's enterprise risk
management program, compliance with
applicable legal and regulatory requirements
and information security, data protection and
privacy program.
Talent Development and Compensation Committee
The compensation committee is primarily responsible
for:
• overseeing the compensation of the
company's directors and employees;
• establishing, reviewing and reporting the
compensation of our executive officers;
• administering the company's equity-based
and certain other compensation plans;
•
• evaluating the post service arrangement and
benefits of our executive officers, including
the CEO;
reviewing the operation and structure of the
company's compensation program; and
• evaluating the company's programs and
practices relating to talent and leadership
development and management, including
matters relating to the attraction,
development and retention of a diverse and
talented workforce.
14
Nominating and Corporate Governance Committee
The governance committee is responsible for:
• evaluating the size, composition,
organization and governance of the board
and its committees;
Current members
Jeremy Levine (chair)
Jeffrey Jordan (member)
Salaam Coleman Smith (member)
Number of meetings held in 2021 4
•
•
• assisting the board in identifying and
evaluating candidates qualified to be
appointed as a board member;
recommending potential candidates to the
board for its approval to propose such
candidates to the stockholders for election to
the board;
reviewing and recommending to the board
the independence determinations of the
directors as well as recommending to the
board the composition of each committee;
and
reviewing the performance and annual
self-evaluation of the board and each of its
committees.
•
Other Governance Practices
Corporate Governance Guidelines
The board has adopted corporate governance guidelines, which you can find on our website
(https://investor.pinterestinc.com/governance/governance-documents), that we believe reflect the board’s
commitment to governance practices that enhance corporate responsibility and accountability. The board
annually reviews these guidelines, along with the charters for the board’s standing committees (the audit
committee, compensation committee and governance committee), so that our policies and programs
continue to reflect good corporate governance practices.
Code of Ethics
We have adopted a code of business conduct and ethics applicable to our directors and employees,
including our CEO, CFO and other executive officers and all persons performing similar functions. A copy
of that code is available on our website
(https://investor.pinterestinc.com/governance/governance-documents). We intend to disclose on our
website any future amendments to, or material waivers from, the code to the extent applicable to our
executive officers or directors and required to be disclosed within four business days following the
amendment or waiver.
No Compensation Committee Interlocks or Insider Participation
None of the members of the compensation committee is currently, or has been at any time, one of our
officers or employees. None of our executive officers currently serve, or have served during the last year,
as a member of a board of directors or compensation committee of any entity that has one or more
executive officers serving as a member of our board or compensation committee.
Communications with the Board and Stockholder Engagement
We have a process by which stockholders and any other interested parties may directly communicate
with the board or any of its directors, including the lead independent director. Those who wish to
communicate with the board or any of its directors may do so by sending written communications
addressed to the Corporate Secretary at the company’s address which can be found on the first page of
this proxy statement. These communications are reviewed by the Corporate Secretary or Assistant
15
Secretary to determine whether they are appropriate for presentation to the board or such director. The
purpose of this screening is to avoid having the board consider irrelevant or inappropriate
communications (such as advertisements, solicitations, and product inquiries).
In addition, members of our investor relations team and our management meet with our stockholders from
time to time to address their questions and concerns about our business and the company. We also
update our board on investor feedback, when appropriate.
Corporate Responsibility
Our mission is to give people the inspiration to create a life they love. We have ongoing efforts to address
environmental, social, and governance (ESG) priorities to further our mission and help deliver sustainable
long-term value to our stakeholders.
Below we describe highlights of our on-going ESG efforts. We also regularly post company initiatives and
information in our newsroom at https://newsroom.pinterest.com and
https://investor.pinterestinc.com/investor-overview.
Governance
Our board and board committees oversee ESG matters associated with their respective areas of
responsibility. In particular:
• Our audit committee is responsible for oversight of the company’s enterprise risk management
program, including risks arising from information security, data protection and privacy.
• Our compensation committee reviews and oversees the development, implementation and
effectiveness of policies, objectives and strategies relating to the attraction, retention and
development of our talent and our diversity, equity and inclusion efforts, as well as other aspects
of our human capital management, including executive leadership development and succession
planning.
• Our nominating committee considers and addresses matters relating to governance, director
succession, board refreshment and diversity as well as stockholder engagement.
For more information on the responsibilities of board committees please see ‘‘Board Committees’’ above.
People
To attract and retain great talent, we strive to create opportunities for our employees to grow and develop
in their careers, supported by competitive compensation, benefits and health and wellness programs, and
by programs that are intended to foster diversity, equity and inclusion and build connections between our
employees and their communities.
Diversity, equity and inclusion: We value and seek inclusion and diversity across all levels in our
organization, including within our leadership. Our board includes directors from various backgrounds,
industries, skills and experience. Our board of nine directors is comprised of seven independent directors,
three women and is racially diverse. Our leadership team includes leaders with diverse skills, experience,
racial backgrounds and genders.
We strive to create an inclusive and diverse workplace where all of our employees are empowered to
bring their whole, authentic selves to work every day. We seek and respect diverse perspectives which
also helps us create a more inclusive and diverse product and foster a culture of well-being and
engagement that helps us to continue attracting, developing and retaining the best talent.
We have published an annual inclusion and diversity report since 2015 which we make publicly available
on our website. Our latest diversity report can be found at https://newsroom.pinterest.com. We believe it
is important to hold ourselves accountable to creating an inclusive and diverse workforce. Our inclusion
and diversity report includes our commitment to inclusion and diversity, representation and workforce
demographics data, and our inclusion and diversity initiatives and programs across the company to
advance our mission.
16
We have employee communities that are aligned around dimensions of inclusion and diversity, such as
gender, ethnicity, sexual orientation or other shared attributes, which we believe help build community and
enable opportunities for development. We also offer our employees training courses to educate them on
inclusion and diversity issues and practices.
Earlier this year, we also welcomed Nichole Barnes Marshall as our Global Head of Inclusion and
Diversity.
Compensation and benefits: We are committed to the health, safety and wellness of our employees. We
provide our employees and their families with access to a variety of flexible and convenient health and
wellness programs that are intended to support their physical and mental health by providing tools and
resources to help them improve or maintain their health. In response to the COVID-19 pandemic, we
implemented significant changes that we determined were in the best interest of our employees, as well
as the communities in which we operate, and which are designed to comply with government regulations.
Currently, the majority of our employees work from home and we have implemented additional safety
measures for employees continuing critical on-site work.
We provide robust compensation and benefits programs to help meet the needs of our employees. In
addition to highly competitive salaries, our programs (which vary by role/country/region) also include
equity awards, a 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending
accounts, flexible paid time off, family leave, family care resources, flexible work schedules, employee
assistance programs and charitable donation matching, among many others. We continue to review and
update our compensation and benefits. For example, we recently enhanced our family leave benefits for
birthing and adoptive parents effective January 1, 2022 and increased our 401(k) matching limits.
Amongst other initiatives, we launched an ombuds program intended to give every employee the
opportunity to engage confidentially with neutral, trained professionals for impartial and independent
support in navigating challenging situations in the workplace.
Pay Equity: Pinterest remains committed to maintaining pay equity across gender and race. This means
equal pay for comparable work. In a dynamic workplace, maintaining pay equity requires vigilance and
ongoing monitoring. Twice a year we analyze compensation and make adjustments when necessary to
continue to stand by this very important commitment.
Learning and development: We are committed to helping our employees create a career that is inspiring,
impactful and ultimately time well spent. We have programs to help foster open and ongoing conversation
around career growth goals both in the long term and short term. We also have workshops dedicated to
help employees learn new skills and develop their careers. We set aside a dedicated personal learning
and development budget for our employees.
Community
Philanthropy: We believe our social impact and philanthropy initiatives are core to our brand and our
identity and our philanthropic strategy is focused on expanding emotional well-being and place-based
giving across Pinterest’s global footprint. Our philanthropy efforts focus on making an impact in three
areas:
•
•
•
Expanded Employee Volunteerism: The company launched an expanded volunteer service
program that grants employees five volunteer days off to support civic and community
engagement activities every calendar year.
Donation Match: Pinterest recently increased its donation matching program and matches funds
to eligible nonprofits, dollar for dollar, up to $1,000 per employee each year.
Charitable Giving: Back in 2019, we set aside approximately 2.5 million shares of our class A
common stock for charitable donations. We have also set up a donor advised fund to which we
have contributed 750,000 shares of our class A common stock. Currently, the primary focus of
the grantmaking is in the area of emotional well-being, particularly increasing awareness,
reducing stigma, supporting innovations in the field, and tackling inequities in access and
17
disparities in outcomes. In addition, the program includes a place-based community giving
portfolio, and a reserve for responsive grantmaking to tackle urgent or emerging challenges, like
the COVID-19 pandemic and support for organizations tackling racial and other inequities.
Product: People come to Pinterest to discover ideas, get inspired and focus on themselves and their
futures. To help us cultivate an inspired community, we have robust guidelines and standards for content
created and/or published on our platform. Among the industry-leading policy decisions we have made
over the years include: establishing guidelines that clarify that Pinterest is not a place to spread harmful
misinformation, banning political campaign ads on our platform and efforts to prevent the monetization of
search terms related to the COVID-19 pandemic. Most recently we expanded our misinformation
guidelines to prohibit conspiracy theories, misinformation and disinformation relating to climate change.
Further, we have released inclusive product features such as try on for various skin tones. We also
updated our advertising guidelines to prohibit advertisements relating to weight loss.
We also publish a bi-annual Transparency Report which is available on our website and highlights
information on our efforts to moderate content on our platform, including the number of Pins we
deactivated for violating our policies and the information and deactivation requests we received from law
enforcement and government agencies. We work hard to identify and deactivate harmful content from our
site, and our content policies and moderation practices continue to evolve with industry best practices.
Suppliers: We also have a robust supplier code of conduct that lays out our expectations of our suppliers
on matters relating to, amongst others, workplace safety, security and privacy, protecting the environment,
human rights and diversity and inclusion. Our supplier code of conduct is publicly available on our
investor relations website.
Planet
Across the company, we are working to understand and minimize our environmental footprint. We have
completed various energy and water saving projects, including installing a wastewater re-pipe to save
fresh water and a lighting retrofit project to save electricity in our offices. We have various partnerships to
reduce waste, including our partnership with Revivin to donate used laptops and other equipment to
communities and organizations in need and our partnership with Copia to redistribute food to local
communities. Finally, we have an employee group - PinPlanet - focused on mobilizing employees,
Pinners and business partners on issues relating to sustainability.
Director Compensation
The compensation committee regularly reviews and assesses the form and amount of compensation
payable to our independent directors and, with the assistance of an external compensation consultant,
recommends any appropriate adjustments to the full board for approval. In February 2021, the board
approved a revised Non-Employee Director Compensation Policy, pursuant to which our independent
directors received the following compensation in 2021 on a pro-rata basis. Under the updated
Non-Employee Director Compensation Policy, we reimbursed our independent directors for reasonable
out of pocket travel expenses in 2021 since the approval of the updated policy.
Annual retainer
Additional annual retainer for lead director
Additional annual retainers for committee service
Cash Compensation (1)
Audit Committee
Compensation Committee
Governance Committee
Initial grant of RSUs (4)
Annual grant of RSUs (5)
Equity Compensation (3)
Chair
$25,000
$20,000
$10,000
$ 50,000
$ 37,500(2)
Member
$ 12,500
$ 10,000
$ 5,000
$400,000
$260,000(6)
(1)
Paid in quarterly installments on a prospective basis, pro-rated for directors whose service commences during the year.
18
(2)
(3)
(4)
(5)
(6)
Increased from $20,000 pursuant to the updated Non-Employee Director Compensation Policy approved by the board in
February 2021.
Amounts represent the approximate grant date fair value of RSUs that will be settled in shares of Class A common stock. All
awards granted pursuant to the updated Non-Employee Director Compensation Policy vest, in addition to the schedules below,
upon a change in control of the company.
Award vests, subject to the director’s continued service, in equal annual installments on the first three anniversaries of the
director’s commencement of service. Applies only to directors appointed after the IPO which was in April 2019.
Award vests, subject to the director’s continued service, in full on the earlier of the first anniversary of the grant date or the day
prior to the company’s next annual meeting.
Increased from $250,000 pursuant to the updated Non-Employee Director Compensation Policy approved by the board in
February 2021.
Benjamin Silbermann and Evan Sharp, do not receive any additional compensation for their services as a
director.
The following table sets forth information regarding compensation earned by or paid to our non-employee
directors during 2021.
2021 Director Compensation Table
Name
Jeffrey Jordan
Leslie Kilgore
Jeremy Levine
Gokul Rajaram
Fredric Reynolds
Salaam Coleman Smith
Michelle Wilson(3)
Andrea Wishom
Fees Earned or Paid in
Cash ($)
55,000
78,333
60,000
57,916
75,000
65,416
55,625
81,875
Stock
Awards
($) (1)(2)
259,959
259,959
259,959
259,959
259,959
259,959
—
259,959
All Other
Compensation ($)
—
—
—
—
—
—
—
—
Total
($)
314,959
338,292
319,959
317,875
334,959
325,375
55,625
341,834
(1)
(2)
(3)
Reported amounts represent the aggregate grant date fair value of RSUs granted during 2021, as computed in accordance
with Financial Accounting Standards Board (‘‘FASB’’) Accounting Standards Codification (‘‘ASC’’) Topic 718. See Notes to
Consolidated Financial Statements included in our 2021 annual report on Form 10-K for the assumptions used in calculating
the grant date fair value. These amounts do not reflect the actual economic value that may be realized from such awards.
As of December 31, 2021, Mr. Jordan has 3,981 RSUs outstanding, Ms. Kilgore has 10,819 RSUs outstanding, Mr. Levine has
3,981 RSUs outstanding, Mr. Rajaram has 17,176 RSUs outstanding, Mr. Reynolds has 10,231 RSUs outstanding,
Ms. Coleman Smith has 8,505 RSUs outstanding and Ms. Wishom has 11,631 RSUs outstanding. Ms. Wilson has no
outstanding RSUs.
Represents compensation received until Ms. Wilson’s retirement from the board at the 2021 annual meeting.
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PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT
AUDITOR
The audit committee has sole responsibility for the appointment, compensation and oversight of our
independent registered public accounting firm. At the annual meeting, you are being asked to ratify the
audit committee’s selection of Ernst & Young LLP (‘‘EY’’) to serve as our independent auditor for the year
ending December 31, 2022. EY has served as our independent auditor since 2013. The audit committee
believes that the continued retention of EY as our independent auditor is in the best interests of Pinterest
and its stockholders. Representatives of EY are expected to be present at the annual meeting. They will
have an opportunity to make a statement if they desire to do so and are expected to be available to
respond to appropriate stockholder questions.
The board, upon recommendation of the audit committee, is submitting the selection of EY to
stockholders for ratification as a matter of good corporate governance. If stockholders do not ratify the
selection of EY, the audit committee will review its future selection of our independent auditor in light of
that result. Even if the selection is ratified, the audit committee may, in its discretion, appoint a new
independent auditor at any time during the year if it determines that such a change would be in the best
interests of the company and its stockholders.
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION
OF ERNST & YOUNG LLP
Principal Accountant Fees and Services
The following table represents aggregate fees for EY services for the years ended December 31, 2021
and 2020 (in thousands):
Audit fees(1)
Audit-related fees(2)
Tax fees(3)
All other fees(4)
Total fees
2021
2020
3,736
—
1,000
128
4,864
3,087
—
772
115
3,974
(1)
(2)
(3)
(4)
Consist of fees for services rendered in connection with the annual audit of our consolidated financial statements and audit of
internal control over financial reporting, reviews of our quarterly condensed consolidated financial statements, services
provided in connection with statutory and regulatory filings, and consultations on accounting matters directly related to the
audit.
There were no audit-related fees for the years ended December 31, 2021 and 2020.
Consist of fees for services rendered for tax compliance, tax advice and tax planning.
Consist of fees for all other services not included in the categories set forth above.
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Pre-Approval Policies and Procedures
It is the policy of the audit committee to pre-approve, near the beginning of each fiscal year, all audit and
permissible non-audit services to be provided by the independent auditor during that fiscal year. The audit
committee also may pre-approve particular services during the fiscal year on a case-by-case basis. The
audit committee has delegated to the chair of the audit committee the authority to pre-approve such
specific services on a case-by-case basis for which the aggregated estimated fees do not exceed
$200,000. The audit committee or chair, as applicable, considers whether the provision of any non-audit
services is compatible with maintaining the independence of our independent auditor, and solicits the
input of management and the independent auditor on this issue. In 2021, the audit committee
pre-approved all services provided to the company by EY pursuant to the policies and procedures
described above, and the audit committee determined that all non-audit services provided to the company
by EY were compatible with the maintenance of EY’s independence in the conduct of its auditing
functions.
Audit Committee Report
The audit committee has reviewed and discussed with management the audited financial statements for
the fiscal year ended December 31, 2021. The audit committee has discussed with Ernst & Young LLP
(‘‘EY’’), our independent registered public accounting firm, the matters required to be discussed by the
applicable requirements of the Public Company Accounting Oversight Board (‘‘PCAOB’’) and the SEC.
The audit committee has also received the written disclosures and the letter from EY required by
applicable requirements of the PCAOB regarding the firm’s communications with the audit committee
concerning independence and has discussed with EY the firm’s independence. Based on the foregoing,
the audit committee has recommended to the board that the audited financial statements be included in
our 2021 annual report on Form 10-K.
Members of the Audit Committee
Fredric Reynolds (Chair)
Leslie Kilgore
Salaam Coleman Smith
21
PROPOSAL 3: ADVISORY NON-BINDING VOTE ON OUR NAMED
EXECUTIVE OFFICERS' COMPENSATION
In accordance with Section 14A of the Securities Exchange Act of 1934, we are providing our
stockholders with the opportunity to express their view, on an advisory non-binding basis, on the
compensation of our named executive officers (commonly known as a say-on-pay vote).
This say-on-pay proposal gives our stockholders the opportunity to express their views on our named
executive officers’ compensation as a whole. This vote is not intended to address any specific element of
compensation but rather the overall compensation of our named executive officers and our compensation
philosophy, policies and practices described in this proxy statement. Please read the ‘‘Compensation
Discussion and Analysis’’ and the compensation tables and narrative disclosure that follow for information
about our executive compensation program, including details of the fiscal 2021 compensation of our
named executive officers. Our compensation committee believes that these policies and practices are
effective in implementing our compensation philosophy and achieving our compensation program goals.
As an advisory vote, the outcome of the vote on this proposal is not binding. However, our management
team, our board and our compensation committee, which is responsible for designing and administering
our executive compensation program, value the opinions expressed by our stockholders, and will
consider the outcome of this vote when making future executive compensation decisions. Unless our
board modifies its policy on the frequency of holding say-on-pay votes, the next say-on-pay vote will occur
at the 2023 annual meeting.
THE BOARD RECOMMENDS A VOTE FOR THE APPROVAL, ON AN ADVISORY NON-BINDING BASIS,
OF OUR NAMED EXECUTIVE OFFICERS' COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis describes the compensation program for our chief executive
officer, our chief financial officer, and our three other highest paid executive officers (commonly referred to
as ‘‘named executive officers’’ or ‘‘NEOs’’). For 2021, our NEOs were:
•
•
•
•
•
Benjamin Silbermann, our Co-Founder, President and Chief Executive Officer (our ‘‘CEO’’)
Evan Sharp, our Co-Founder and former Chief Design and Creative Officer
Christine Flores, our General Counsel and Corporate Secretary
Todd Morgenfeld, our Chief Financial Officer and Head of Business Operations (our ‘‘CFO’’)
Naveen Gavini, our Senior Vice President of Products
Effective as of October 15, 2021, Evan Sharp resigned from his role as Chief Design and Creative Officer
and became an advisor to Pinterest. He also remains a member of our board.
On February 11, 2022, Christine Flores informed the company of her intention to leave the company
effective October 1, 2022.
22
Compensation Philosophy and Program
Objectives. Our executive compensation program is guided by these objectives:
drive achievement of Pinterest’s long-term mission;
•
• motivate team collaboration (company first, individual function second);
•
attract and retain top talent by compensating competitively based on the executive’s value and
performance; and
•
align the interests of our executives with those of our stockholders.
Framework. To achieve these objectives, our executive compensation program has two compensation
elements: base salary and long-term equity incentive compensation. In addition, our NEOs are eligible to
participate in the standard benefit plans offered to our other employees and are eligible for
post-employment compensation in certain situations as described below. We generally do not provide our
NEOs with perquisites or other personal benefits and do not have any defined benefit pension,
supplemental executive retirement or non-qualified deferred compensation plans.
Pay mix. The majority of our executive compensation is delivered in the form of equity awards. For
details, see the 2021 Summary Compensation Table below. We believe that this pay mix, including equity
compensation in the form of time-based full-value awards (restricted stock units (‘‘RSU’’) and restricted
stock awards (‘‘RSA’’)) vesting over at least four years, effectively supports all of our compensation
objectives, including achievement of our long-term mission, motivating and paying for team and company
performance, and aligning our executives’ interests with those of our stockholders.
Linking pay with performance. As described above, the majority of our NEOs’ target total direct
compensation is linked to the value of our stock, which reflects how we create value over the long term. In
addition, executives are eligible to receive periodic grants following the annual review cycle. When
determining the amount of such awards, the compensation committee considers the company’s
performance against financial, operational and strategic objectives as well as each named executive
officer’s individual contribution to that performance. In assessing executive performance, the
compensation committee considers both, the objectives the executive helped the company achieve as
well as how they helped achieve those objectives, including whether they demonstrated leadership
behaviors consistent with our values.
Governance. We endeavor to maintain sound governance standards through the administration of our
executive compensation program. The following table summarizes our compensation governance policies
and practices.
What We Do
What We Don't Do
✓ fully independent compensation committee
✓ independent compensation consultant to the
compensation committee
✓ annual review of the compensation program, best
practices and market trends
✓ majority of executive compensation tied to stock
value
✓ annual review of succession plans for key officers
✓ ‘‘double trigger’’ termination required for vesting in
equity in connection with change in control
✓ annual stockholder advisory non-binding vote on
our compensation program (say on pay)
x
x
x
x
x
x
pension and executive retirement plans
significant perquisites to executive officers
supplemental executive benefits
employee and director hedging and pledging of our
equity securities
tax gross-ups on change in control payments
dividends or equivalents on unvested equity awards
The compensation committee, in consultation with its external compensation consultant, will continue to
assess and update our executive compensation program so that it best supports Pinterest’s long-term
mission and growth.
23
Compensation-Setting Process
The compensation committee reviews our executive compensation program annually to assess whether it
continues to be aligned with our compensation philosophy and program objectives as described above.
The compensation committee updates the program as needed and also evaluates and establishes target
total direct compensation opportunities for each of our NEOs.
The compensation committee’s decision making for our NEOs' compensation is guided by the factors
listed below. The compensation committee does not weigh these factors in any predetermined manner,
and no single factor is determinative in selecting compensation elements and setting compensation
levels. Members of the compensation committee apply their business judgment and consider all of this
information in light of their experience and knowledge of the company, the competitive market, and each
NEO. The factors that the compensation committee considers include:
•
•
•
•
•
•
•
•
our executive compensation program objectives;
our performance against the financial, operational and strategic objectives established by the
compensation committee and the board;
each of our named executive officer’s roles and responsibilities, qualifications, knowledge, skills,
experience, and marketability including on a relative basis to other similarly situated executives
at the companies in our compensation peer group;
the performance of each of our NEOs, based on a qualitative assessment of his or her
contributions to our overall performance, ability to lead his or her business unit or function, ability
to collaborate across the company and demonstration of leadership behaviors consistent with
our values, and potential to contribute to our long-term financial, operational and strategic
objectives;
an analysis of competitive market data (as described below);
the unrealized value and other terms of the outstanding unvested equity awards held by each of
our named executive officers;
feedback from investors on our executive compensation program, including through the
say-on-pay vote; and
the recommendations of our CEO with respect to the compensation of our other NEOs.
Say-on-pay vote. In setting the form and amount of compensation for our NEOs, the compensation
committee also considers the voting results from our most recent say-on-pay vote as well as specific input
provided by stockholders throughout the year. At our 2021 annual stockholders’ meeting, stockholders
expressed a high level of support for our executive compensation program, with 98.8% of the votes cast
in favor. The compensation committee did not make any significant changes to our executive
compensation program.
Competitive positioning. For purposes of comparing our executive compensation against the
competitive market and to guide compensation levels and practices, the compensation committee
developed a peer group for 2021 in consultation with our external compensation consultant. In developing
the peer group, the compensation committee's goal was to include companies that would be relevant and
useful for compensation decision-making, recognizing the individual qualifications and marketability of our
NEOs.
This resulted in a peer group comprised of:
•
•
•
publicly traded companies, mainly headquartered in the San Francisco Bay Area;
in internet and software-related industries; and
with revenue from $0.7 billion to $13 billion.
24
For 2021, the compensation peer group consisted of the following companies:
Activision Blizzard, Inc.*
eBay Inc*
Slack Technologies, Inc.
VMware, Inc.*
Adobe Inc.*
Electronic Arts Inc.*
Snap Inc
Arista Networks, Inc.
Expedia Group, Inc.*
Splunk Inc
Workday, Inc.
Yelp Inc*
Autodesk, Inc.
Block, Inc.**
Intuit Inc.*
Lyft, Inc.*
Spotify Technology SA*
Zillow Group, Inc.
TripAdvisor, Inc.
Zoom Video
Communications, Inc.
Crowdstrike Holdings, Inc.
Okta, Inc.
Twilio Inc
DocuSign, Inc.
Dropbox, Inc.
Palo Alto Networks Inc
Twitter, Inc.
ServiceNow Inc
Uber Technologies, Inc*
*
Companies marked with an asterisk were added to the peer group for 2021. No companies were removed from the 2020 peer
group.
**
Formerly named Square, Inc.
The above compensation peer group for 2021 was approved by the compensation committee in
December 2020, with input from our external compensation consultant.
As described above, compensation decisions are not based solely on competitive market data. Rather,
the market data serves as one point of reference to aid in understanding the competitive market for
executive positions in our industry. When making compensation decisions, the compensation committee
does not specifically target compensation for our NEOs at a certain percentile of compensation data for
other individuals with similar roles at the peer companies. Instead, the committee considers all of the
data, including individual compensation data where available, as well as the many qualitative factors
unique to each of our NEOs, including their responsibilities, qualifications, knowledge, performance, and
marketability which are not adequately reflected in percentile-based data. In addition to publicly available
compensation data, the committee may also review compensation survey data for the peer group and
broader groups for supplemental, secondary reference.
The compensation committee reviews our compensation peer group at least annually and adjusts its
composition as warranted, taking into account changes in our business and that of the companies in our
peer group, as well as changes in our executives.
Compensation Elements for 2021
Base salaries. Consistent with our compensation philosophy and focus on long-term value creation, base
salaries are not a major portion of the target total direct compensation for our NEOs. The compensation
committee may adjust the base salaries of our NEOs as part of its annual executive compensation review
and in the event of a promotion or significant change in responsibilities. In establishing base salary
amounts and adjustments, the compensation committee generally considers the factors described above.
For 2021, after considering both the company’s and each NEO’s performance during the prior year as
well as their expected future contributions, market data, and value and terms of unvested equity awards,
the compensation committee maintained salaries at 2020 levels and did not make additional equity
awards to our NEOs. The table below sets forth the base salaries for each of our NEOs as of
December 31, 2021 (or, for Mr. Sharp, as of the date of his transition to an advisor role):
Named Executive Officer
Ben Silbermann
Evan Sharp
Christine Flores
Todd Morgenfeld
Naveen Gavini
Base Salary
$197,100
$330,000
$345,000
$360,500
$350,000
Long-term equity incentive compensation. Consistent with our compensation philosophy and focus on
our long-term mission and value creation, the majority of our NEOs’ target total direct compensation has
historically been delivered in the form of RSUs and RSAs vesting over four or five years. In establishing
25
the amount and terms of these awards, the compensation committee generally considers the factors
described above under the Compensation-Setting Process. NEOs may receive larger awards upon hire or
in connection with a promotion or significant change in responsibilities, and do not necessarily receive
awards every year.
In consideration of the company’s and each NEO’s performance during 2020 and the unrealized value
and terms of unvested equity awards, the compensation committee did not grant new equity awards to
NEOs in 2021. The amounts reflected as ‘‘Stock Awards’’ for 2021 in the 2021 Summary Compensation
Table below are a result of an accounting modification of Mr. Sharp's unvested equity awards in
connection with his transition to an advisor and accounting modification in connection with certain
amendments to the executive severance agreements we made for executive officers (except
Ben Silbermann and Evan Sharp) as described in ‘‘Post-Employment Compensation Arrangements.’’
Benefits. Our named executive officers are eligible to participate in the same employee benefits that are
generally available to all our full-time employees, subject to the satisfaction of certain eligibility
requirements. These benefits include medical and dental insurance, life insurance, short- and long-term
disability insurance and commuter benefits. In addition, we maintain a Section 401(k) savings plan that
provides eligible U.S. employees with an opportunity to save for retirement on a tax-advantaged basis by
deferring eligible compensation up to certain limits as set forth in the Internal Revenue Code. We make
matching contributions to the Section 401(k) plan. In addition, we have the ability to make discretionary
cash contributions to the Section 401(k) plan, though we did not do so in 2021. Participants are
immediately fully vested in both their own contributions and any company contributions. In structuring
these benefit programs, we seek to provide an aggregate level of benefits that is comparable to those
provided by similarly situated companies. We do not provide any non-qualified deferred compensation
benefits and do not have any defined benefit pension or supplemental executive retirement plans.
Perquisites and other personal benefits. We do not view perquisites or other personal benefits as
important to achieving our compensation objectives. Accordingly, we maintain a general benefits program
for all employees and do not provide perquisites or other personal benefits to our executive officers
except where we believe it is appropriate to achieve our compensation objectives and to assist our
executive officers in the performance of their duties. During 2021, our named executive officers did not
receive any perquisites or other personal benefits, except for benefits that are generally available to all
our employees.
Post-Employment Compensation Arrangements
What we do. We have entered into executive severance and change in control agreements with each of
our named executive officers. These agreements provide severance payments and, except for Ben
Silbermann and Evan Sharp, partial vesting in equity if the named executive officer’s employment is
terminated without cause as well as ‘‘double-trigger’’ change in control payments and full vesting of equity
in the event that the named executive officer’s employment is terminated without cause or the executive
resigns for good reason within a specified period before and after a change in control of the company. We
do not provide any of our named executive officers with a ‘‘gross-up’’ or other reimbursement payment for
any tax liability as a result of the application of Sections 280G or 4999 of the Internal Revenue Code.
Why we do it. We believe that having reasonable and competitive post-employment compensation
arrangements is essential to attracting and retaining highly qualified executives as well as facilitating their
transition from the company when appropriate. These severance arrangements are designed to provide
reasonable compensation to executives who leave the company under certain circumstances to facilitate
their transition to new employment. In addition, they are designed to align the interests of our named
executive officers and our stockholders in the event of a potential change in control of the company by
helping our executives maintain focus on pursuing corporate transactions that are in the best interests of
our stockholders regardless of whether those transactions may result in their own job loss. We seek to
mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing
executive to sign a separation and release agreement acceptable to us as a condition to receiving
post-employment compensation.
In December 2021, to improve Pinterest’s ability to attract and retain highly qualified executives as well as
facilitate their transition from the company when appropriate, the compensation committee approved
26
changes to the executive severance and change in control agreement for our named executive officers,
except for Ben Silbermann and Evan Sharp, as described below. The CEO remains eligible for the
severance benefits under his original agreement. In addition, Evan Sharp remains eligible under his
original agreement for accelerated vesting in equity only upon a qualifying termination connected to a
change in control in recognition of his continued service as an advisor and board member.
•
•
For a termination without cause not connected to a change in control, the cash severance
payment was increased from 6 to a maximum of 24 months of salary and cost of health benefits
continuation declining to a minimum of 12 months for each month of service. Since each of our
NEOs has been an employee of Pinterest over 12 months, they would be entitled to 12 months
of salary and cost of health benefits continuation coverage. The equity benefit was increased
from none to vesting in equity that would otherwise have vested had the executive remained
employed for 12 months following termination.
For termination without cause or good reason following a change in control (‘‘double trigger’’),
the cash severance payment was increased from 6 to 12 months of salary and cost of health
benefits continuation coverage. There was no change for the equity treatment.
The compensation committee does not consider the specific amounts payable under these
post-employment compensation arrangements when establishing the annual compensation of our named
executive officers. We believe, however, that these arrangements are an important component of
competitive compensation packages. For a description of the terms of these agreements, as well as an
estimate of the potential payments payable under these agreements, see ‘‘Potential Payments upon
Termination or Change in Control’’ below.
Roles and Responsibilities
Role of our compensation committee. The compensation committee performs the responsibilities of the
board relating to the compensation of directors and employees, including executive officers. The
compensation committee has overall responsibility for reviewing our compensation philosophy and
strategy, overseeing our compensation and benefits policies generally, and overseeing and evaluating the
compensation plans, policies, and practices applicable to our CEO as well as our other executive officers.
The compensation committee also oversees management of risks for succession planning and
compensation; and evaluates the company’s programs and practices relating to talent and leadership
development and management, including matters relating to the attraction, development and retention of
a diverse and talented workforce. The compensation committee operates pursuant to a written charter,
which is available on our website (see the first page of this proxy statement).
Role of our chief executive officer. In discharging its responsibilities, the compensation committee
works with members of our management, including our CEO. Management assists the compensation
committee by providing information on corporate and individual performance, market compensation data,
and management’s perspective on compensation matters. The compensation committee solicits and
reviews our CEO’s recommendations with respect to adjustments to base salaries, long-term equity
incentive compensation opportunities, program structures, and other compensation-related matters for
our named executive officers (other than with respect to his own compensation) and considers his
recommendations as one of the factors in determining compensation. Our CEO recuses himself from all
discussions and recommendations regarding his own compensation and is not present when his
compensation is discussed.
Role of our compensation consultant. Pursuant to its charter, the compensation committee has the
authority to retain the services of external compensation advisors, as it determines in its sole discretion,
including compensation consultants and legal, accounting, and other advisors. The compensation
committee makes all determinations regarding the engagement, fees, and services of these advisors, and
any such advisor reports directly to the compensation committee or the chair of the committee. We
continued to engage Compensia, Inc. as the executive compensation consultant for the compensation
committee after evaluating that firm’s independence pursuant to applicable SEC and NYSE rules and
determining that Compensia’s work did not give rise to any conflict of interest. Compensia did not provide
any services to us other than advice and support with respect to executive and director compensation,
including: the levels of overall compensation and each element of compensation for our executives; peer
27
group selection and data collection; market trends for executive and director compensation; equity
compensation; a risk assessment of our compensation programs; and input on this Compensation
Discussion and Analysis.
Other Compensation Policies and Practices
Employment arrangements. Although our named executive officers are employed ‘‘at-will’’ and their
employment can be terminated at any time for any reason with or without cause, we have entered into
employment agreements or offer letters with each of our named executive officers to establish an initial
base salary and eligibility to participate in our employee benefit programs.
Anti-hedging and pledging policies. Under our insider trading policy, our employees, including our
executive officers, and non-employee directors are prohibited from the following transactions: entering
into hedging or monetizing transactions or similar arrangements with respect to our securities, including
collars, equity swaps, exchange funds and forward contracts; holding our securities in a margin account
or pledging our securities as collateral for a loan, unless approved in advance; short selling our securities;
and engaging in any transaction in publicly traded options in our securities, including puts or calls or other
derivative securities.
Compensation risk considerations. The compensation committee has reviewed our compensation
policies and practices, in consultation with its external compensation consultant, to assess whether they
encourage our employees to take inappropriate risks. After reviewing and assessing our compensation
philosophy, policies, and practices, including the mix of fixed vs. variable and short- vs. long-term
compensation, overall pay and incentive structures, the risk mitigating features built into our programs,
and the independent board oversight of our programs, the compensation committee has determined that
any risks arising from our compensation policies and practices for our employees are not reasonably
likely to have a material adverse effect on the company as a whole.
Tax deductibility considerations. Section 162(m) of the Internal Revenue Code generally disallows
public companies to take a tax deduction for U.S. federal income tax purposes for compensation in
excess of $1 million paid in a year to a covered employee. Once an individual has been determined to be
a covered employee, the deduction limitation applies indefinitely. While Pinterest is not subject to
Section 162(m) under transition rules for newly public companies, in approving the amount and form of
compensation for our named executive officers, the compensation committee considers all elements of
the cost of providing such compensation, including the potential impact of Section 162(m) in the future.
However, the compensation committee believes that our stockholders’ interests are best served by
retaining flexibility to award compensation that may result in non-deductible compensation expense.
Therefore, the compensation committee has the discretion to pay compensation that is not deductible by
virtue of the deduction limit of Section 162(m).
Accounting considerations. In approving the amount and form of compensation for our named
executive officers, the compensation committee considers the impact of FASB ASC Topic 718, which
requires us to measure and recognize the compensation expense for all share-based payment awards
made to our employees and directors, including RSUs and RSAs that may be settled for shares of our
Class A and Class B common stock, based on the grant date fair value of these awards.
Compensation Committee Report
The compensation committee has reviewed and discussed with management the Compensation
Discussion and Analysis contained in this proxy statement. Based on their review and discussion, the
compensation committee has recommended to the board that the Compensation Discussion and Analysis
be included in this proxy statement and incorporated into the company’s 2021 annual report on
Form 10-K.
Members of the Compensation Committee
Leslie Kilgore (Chair)
Gokul Rajaram
Andrea Wishom
28
Compensation Tables
Summary Compensation
The following table shows the compensation awarded or paid to, or earned by, our named executive
officers for 2021, 2020 and 2019, as applicable, in accordance with the SEC’s rules for public companies.
2021 Summary Compensation Table
Name and Principal Position
Benjamin Silbermann
Co-Founder, President & CEO
Evan Sharp
Co-Founder, Former Chief Creative & Design
Officer
Christine Flores
General Counsel and Corporate Secretary
Todd Morgenfeld
Chief Financial Officer & Head of Business
Operations
Naveen Gavini(6)
Senior Vice President of Products
Year
Salary
($)
Bonus
($)
2021
197,100
2020
2019
197,100
197,100
2021
261,250
2020
2019
330,000
330,000
2021
345,000
2020
2019
345,000
345,000
2021
360,500
2020
2019
360,500
360,500
2021
330,114
—
—
—
—
—
—
—
—
—
—
—
—
—
Stock
Awards
($)(1)
All Other
Compensation
($)(2)
Total
($)
—
2,000
199,100
—
45,745,013
40,816,438(4)
—
45,745,013
774,752(5)
4,440,772
—
1,650,351(5)
10,611,517
—
1,033,313(5)
2,000
280,000(3)
2,000
2,000
—
2,000
2,000
—
2,000
2,000
—
2,000
199,100
46,222,113
41,079,688
332,000
46,075,013
1,121,752
4,787,772
345,000
2,012,851
10,974,017
360,500
1,365,427
(1)
(2)
Unless otherwise noted, reported amounts represent the aggregate grant date fair value of RSAs and RSUs granted during
the years shown, as computed in accordance with FASB ASC Topic 718. See Notes to Consolidated Financial Statements
included in our 2021 annual report on Form 10-K for the assumptions used in calculating the grant date fair value. These
amounts do not reflect the actual economic value that may be realized from such awards.
Reflects matching 401(k) contributions unless otherwise noted.
(3)
Reflects Hart-Scott-Rodino Act filing fees paid on Mr. Silbermann’s behalf in connection with his Pinterest stock ownership.
(4) Mr. Sharp resigned from his position as the Chief Design and Creative Officer of Pinterest, effective as of October 15, 2021,
and currently serves as an advisor to Pinterest through the date of Pinterest’s 2024 annual meeting of stockholder pursuant to
a consulting agreement dated October 13, 2021. Mr. Sharp's transition resulted in a modification of his RSU award granted
prior to our IPO in 2019 for accounting purposes. The amount represents the aggregate incremental fair value of his modified
award as computed in accordance with FASB ASC Topic 718 and does not reflect a new equity grant.
(5)
(6)
The compensation committee approved an amended and restated executive severance and change in control agreement (the
‘‘Amended and Restated Severance Agreement’’) on December 15, 2021 for executive officers except Ben Silbermann. The
Amended and Restated Severance Agreement resulted in modifications of outstanding RSU and RSA awards for Todd
Morgenfeld, Christine Flores and Naveen Gavini. The amounts represent the aggregate incremental fair value of their modified
awards as computed in accordance with FASB ASC Topic 718 and do not reflect new equity grants. See ‘‘Potential Payments
upon Termination of Change in Control’’ below for additional details.
In accordance with SEC rules, we have omitted 2020 and 2019 compensation for Mr. Gavini because he was designated an
executive officer in 2021.
29
Grants of Plan-Based Awards
The Company did not grant stock or other plan-based awards to our named executive officers in 2021.
The following table shows certain information regarding accounting modifications during 2021 of
previously granted equity awards
Name
Benjamin Silbermann
Evan Sharp
Christine Flores
Todd Morgenfeld
Naveen Gavini
2021 Grants of Plan-Based Awards Table
Grant
Date
All Other Stock Awards: Number of
Shares of Stock or Units (#)
Grant Date Fair Value of Stock
Awards($)
—
10/12/2021
12/15/2021
12/15/2021
12/15/2021
—
—
—
—
—
—
40,816,438(1)
774,750(2)
1,650,348(2)
1,033,740(2)
(1)
(2)
The amount represents the aggregate incremental fair value related to the modification of Mr. Sharp’s outstanding RSU award
for accounting purposes and does not reflect a new equity grant as explained in footnote 4 of the 2021 Summary
Compensation Table above.
The amount represents the aggregate incremental fair value of modified awards in connection with the Amended and Restated
Severance Agreement for accounting purposes and does not reflect a new equity grant as explained in footnote 5 of the 2021
Summary Compensation Table above.
30
Outstanding Equity Awards
The following table shows certain information with respect to the outstanding equity awards held by our
named executive officers as of December 31, 2021. The vesting schedule applicable to each outstanding
equity award is described in the footnotes to the table. For information with respect to the vesting
acceleration provisions applicable to the equity awards held by our named executive officers, see
‘‘Potential Payments upon Termination or Change in Control’’ below.
Outstanding Equity Awards at Fiscal 2021 Year-End Table
Number of Securities Underlying
Option Awards(1)
Name
Grant Date
Unexercised Options Exercise
Price Per
Share ($)
Unexercisable
Exercisable
Benjamin Silbermann
Evan Sharp
Christine Flores
Todd Morgenfeld
Naveen Gavini
4/25/13
3/21/19(4)
6/20/12
1/16/15
3/21/19(5)
8/1/18(6)
4/7/20(7)
8/1/18(8)
4/7/20(9)
4/30/18(10)
10/27/18(11)
2/5/19(12)
3/28/19(13)
4/7/20(14)
3,971,112
—
769,908
1,756,336
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1.878
—
0.574
4.416
—
—
—
—
—
—
—
—
—
—
Stock Awards(1)
Shares or Units of Stock
That Have Not Vested
Expiration
Date
Number(2)
Market
Value(3) ($)
4/25/23
—
— 1,166,667
—
42,408,345
6/20/22
1/16/25
—
—
— 1,166,667
—
—
—
—
—
—
—
—
—
233,332
294,872
466,664
641,025
6,250
3,123
25,000
15,625
463,953
—
—
42,408,345
8,481,618
10,718,597
16,963,236
23,301,259
227,188
113,521
908,750
567,969
16,864,692
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
All of the outstanding equity awards reported in this table were granted under either the 2009 Stock Plan (in the case of
awards granted pre-IPO) or the 2019 Omnibus Incentive Plan (in the case of awards granted since our IPO). RSUs granted
under the 2009 Stock Plan will be settled in shares of our Class B common stock. RSUs granted under the 2019 Omnibus
Incentive Plan will be settled in shares of our Class A common stock and RSAs granted under the 2019 Omnibus Incentive
Plan represent restricted shares of our Class A common stock.
Awards granted prior to our IPO in April 2019 had vesting conditions that required satisfaction of both (i) a service-based
vesting condition; and (ii) a liquidity-based vesting condition. The liquidity-based vesting condition was satisfied in connection
with our IPO. The schedule associated with the service-based vesting condition varies for each grant of RSUs and RSAs as
described below and is subject to the recipient’s continued service with the company through each such date.
Based on the closing price of our Class A common stock of $36.35 per share as of December 31, 2021.
The award provides that the service-based vesting condition will be satisfied for 5% of the total number of RSUs at the end of
each three-month period during the five-year period commencing on April 20, 2019 and ending on April 20, 2024.
The award provides that the service-based vesting condition will be satisfied for 5% of the total number of RSUs at the end of
each three-month period during the five-year period commencing on April 20, 2019 and ending on April 20, 2024.
The award provides that the service-based vesting condition will be satisfied for (i) 2.5% of the total number of RSUs at the
end of each three-month period during the two-year period commencing on December 20, 2018 and ending on December 20,
2020; and (ii) 10% of the total number of RSUs at the end of each three-month period during the two-year period commencing
on December 20, 2020 and ending on December 20, 2022.
The award provides that the service-based vesting condition will be satisfied for 20% of the total number of RSAs at the end of
each three-month period during the 15-month period commencing on December 20, 2022 and ending on March 20, 2024.
The award provides that the service-based vesting condition will be satisfied for (i) 2.5% of the total number of RSUs at the
end of each three-month period during the two-year period commencing on December 20, 2018 and ending on December 20,
2020; and (ii) 10% of the total number of RSUs at the end of each three-month period occurring during the two-year period
commencing on December 20, 2020 and ending on December 20, 2022.
The award provides that the service-based vesting condition will be satisfied for (i) 3% of the total number of RSAs at the end
of each three-month period during the nine-month period commencing on March 20, 2020 and ending on December 20, 2020;
and (ii) 18.2% of the total number of RSAs at the end of each three-month period during the 15-month period commencing on
December 20, 2022 and ending on March 20, 2024.
(10) The award provides that the service-based vesting condition will be satisfied for 6.25% of the total number of RSUs at the end
of each three-month period during the four-year period commencing on March 20, 2018 and ending on March 20, 2022.
(11) The award provides that the service-based vesting condition will be satisfied for 6.25% of the total number of RSUs at the end
of each three-month period during the four-year period commencing on September 20, 2018 and ending on September 20,
2022.
31
(12) The award provides that the service-based vesting condition will be satisfied for 6.25% of the total number of RSUs at the end
of each three-month period during the four-year period commencing on December 20, 2018 and ending on December 20,
2022.
(13) The award provides that the service-based vesting condition will be satisfied for 6.25% of the total number of RSUs at the end
of each three-month period during the four-year period commencing on March 20, 2019 and ending on March 20, 2023.
(14) The award provides that the service-based vesting condition will be satisfied for (i) 4.37% of the total number of RSAs on
June 20, 2020; (ii) 4.7% of the total number of RSAs at the end of each three-month period during the nine-month period
commencing on June 20, 2020 and ending on March 20, 2021; (iii) 5.5% of the total number of RSAs at the end of each
three-month period during the 12-month period commencing on March 20, 2021 and ending on March 20, 2022; (iv) 6.47% of
the total number of RSAs at the end of each three-month period during the six-month period commencing on March 20, 2022
and ending on September 20, 2022; (v) 6.63% of the total number of RSAs on December 20, 2022; (vi) 7.6% of the total
number of RSAs on March 20, 2023; and (vii) 8.09% of the total number of RSAs at the end of each three-month period during
the 12-month period commencing on March 20, 2023 and ending on March 20, 2024.
Option Exercises and Stock Vested
The following table shows information regarding the number and value of shares of common stock
acquired during 2021 by our named executive officers from the vesting of RSUs and RSAs and exercise
of stock options.
2021 Option Exercises and Stock Vested Table
Name
Shares Acquired (#) Value Realized ($)(1) Shares Acquired (#) Value Realized ($)(2)
Option Award Exercises
Stock Award Vestings
Benjamin Silbermann
Evan Sharp
Christine Flores
Todd Morgenfeld
Naveen Gavini
1,222,167
—
—
—
—
87,516,327
—
—
—
—
466,667
466,667
306,248
466,664
223,111
32,441,520
32,441,520
19,103,748
27,471,343
13,126,901
(1)
(2)
The value realized on exercise is the difference between the closing price of our Class A common stock on the date of exercise
minus the exercise price.
The value realized on vesting is based on the closing price of our Class A common stock on the vesting date, or if such date
was not a trading day, on the immediately preceding trading day.
Potential Payments upon Termination or Change in Control
On December 15, 2021, an amended and restated executive severance and change in control agreement
was approved for certain of our executive officers, including Todd Morgenfeld, Christine Flores and
Naveen Gavini. These agreements were updated to improve Pinterest’s ability to attract and retain
executive talent and facilitate executive talent transitions. Ben Silberman remains eligible for the
severance benefits under his original agreement and Evan Sharp remains eligible for accelerated vesting
in equity only upon a qualifying termination connected to a change in control.
The payments and benefits under these agreements are described in more detail and quantified below. All
of the payments and benefits provided under these agreements are subject to the named executive
officer’s execution of a general release of claims against the company and continued adherence to the
terms of a confidential information and invention assignment agreement with the company.
In addition to the above, the 2019 Omnibus Incentive Plan provides that in the event of termination upon
death or disability, any employee who holds stock options or his or her beneficiary (in the event of death)
may exercise any outstanding vested stock options at any time as follows: (i) in the event of disability,
during six months following termination; and (ii) in the event of death, during 12 months following death or
if earlier, termination.
Termination without cause not involving a change in control. In the event of a termination without
cause that is not in connection with a change of control, Mr. Silbermann would receive a lump sum cash
payment of 6 months of base salary and 6 months of health benefits continuation, and the other NEOs
(excluding Mr. Sharp) would receive a lump sum cash payment equal to a maximum of 24 months of
salary and 24 months of health benefits continuation (which is reduced by one month for each month of
service with us to a minimum of 12 months).
Evan Sharp is not eligible for cash payments or benefits in the event of a termination without cause that is
not in connection with a change of control.
32
Additionally, upon such a termination, each NEO, other than Mr. Silbermann and Mr. Sharp, will vest in
the portion of each outstanding equity award that would otherwise have vested during the 12-month
period following such termination.
Involuntary termination involving a change in control. In the event of a termination without cause or a
resignation with good reason, in each case, within 90 days prior to or one year following a change in
control of the company, Mr. Silbermann would receive a lump sum cash payment of 12 months of base
salary and 12 months of health benefits continuation, and the other NEOs (excluding Mr. Sharp) would
receive a lump sum cash payment equal to a maximum of 24 months of salary and 24 months of health
benefits continuation (which is reduced by one month for each month of service with us to a minimum of
12 months).
Evan Sharp is not eligible for cash payments or benefits in the event of a double trigger termination.
Additionally, upon such a termination, each NEO, including Mr. Silbermann and Mr. Sharp, will fully vest in
all outstanding equity awards. Separately, upon a change in control of the company, in the event that a
named executive officer’s equity awards are not assumed, substituted or otherwise continued or replaced
with similar equity awards, such awards will vest in full regardless of whether the officer terminates
employment.
These payments and acceleration of vesting are subject to a ‘‘best net after-tax’’ provision to reduce the
amounts paid in the event that they would trigger excise tax penalties and loss of deductibility under
Sections 280G and 4999 of the Internal Revenue Code.
Definitions. For purposes of these agreements:
•
•
•
‘‘Cause’’ means any of the following: (i) executive fails to perform his or her duties and
responsibilities; (ii) an act of dishonesty or misrepresentation that would cause serious injury,
including reputational harm, to the company; (iii) executive’s unauthorized use or disclosure of
any proprietary information or trade secrets; (iv) executive commits a material breach of any
written agreement between executive and the company; (v) executive fails to comply with written
policies or rules; (vi) executive willfully refuses to implement or follow a directive from supervisor;
(vii) executive fails to perform the essential job duties associated with the position;
(viii) executive’s intentional violation of any law or regulation; (ix) executive’s conviction of a
felony, another crime involving moral turpitude or any crime (whether or not a felony) against the
company; or (x) executive’s failure to comply with any reasonable investigation or formal
proceeding.
‘‘Good Reason’’ means any of the following: (i) a material reduction in executive’s duties in
effect immediately prior to the reduction, but the following are not material reductions: (x) a
change of title alone, (y) any change made due to a Change in Control (as defined below), and
(z) not being nominated to the board; (ii) a change in office location which increases the
executive’s one-way commute by more than 35 miles; or (iii) executive’s base salary is reduced
by more than ten percent.
‘‘Change in Control’’ means any of the following: (i) an acquirer owns more than 50% of the
company’s stock; (ii) a merger or business combination; (iii) a majority of the board is replaced
during a 12-month period by directors who are not supported by the existing board; or (iv) an
acquiror acquires all or almost all of the company’s assets. A transaction shall not constitute a
Change in Control if (x) its only purpose is to change the state of the company’s incorporation;
and (y) the conversion of class B common stock into class A common stock resulted in an entity
or person holding more than 50% of the total voting power of the company.
Estimated payments as of December 31, 2021. The following table presents the estimated payments
that each of our named executive officers would have been entitled to receive under these agreements
assuming that a termination of employment and, where applicable, a change in control of the company
had occurred as of December 31, 2021 and based on the closing price per share of our Class A common
stock on the last trading day of the year ($36.35 on December 31, 2021). Amounts actually received if any
of the named executive officers cease to be employed will vary based on factors such as the timing during
the year of any such event, the company’s stock price, and any changes to our benefit arrangements and
33
policies. Amounts shown do not include: (i) benefits earned during the term of the named executive
officer’s employment that are available to all benefit-eligible salaried employees; and (ii) the value of
vested equity awards that the named executive officer is entitled to regardless of whether employment is
terminated.
2021 Potential Termination Payments Table
Name
Benjamin Silbermann
Evan Sharp
Christine Flores
Todd Morgenfeld
Naveen Gavini
Termination
Without Cause
($)
Benefit
Termination Without Cause or for
Good Reason in connection with
Change in Control
($)
Lump sum severance payment(1)
Value of accelerated RSUs and RSAs(2)
Total
Lump sum severance payment(1)
Value of accelerated RSUs and RSAs(2)
Total
Lump sum severance payment(1)
Value of accelerated RSUs and RSAs(2)
Total
Lump sum severance payment(1)
Value of accelerated RSUs and RSAs(2)
Total
Lump sum severance payment(1)
Value of accelerated RSUs and RSAs(2)
Total
115,831
—
115,831
—
—
—
356,525
8,481,618
8,838,143
391,977
16,963,236
17,355,213
350,487
8,208,448
8,558,935
231,663
42,408,345
42,640,008
—
42,408,345
42,408,345
356,525
19,200,215
19,556,740
391,977
40,264,495
40,656,472
350,487
18,682,119
19,032,606
(1)
(2)
Reported amounts are based on the 2021 base salary of each named executive officer and include the estimated cost of
health insurance continuation coverage (paid in lump sum if the NEO elects such coverage) as of the end of the last fiscal year
and the severance period specified in the Executive Severance & Change in Control Agreement.
Reported amounts are based on (i) in the event of a termination without cause, the number of unvested RSUs and RSAs
scheduled to vest within the following 12 months and (ii) in the event of a double trigger termination, the total number of
unvested RSUs and RSAs as of the end of the last fiscal year, in each case, multiplied by the closing price per share of our
Class A common stock on the last trading day of the year. The value set forth in the event of a double trigger termination is the
same value that would apply in the event of a change in control of the company where the awards are not assumed or
substituted (as described above).
Evan Sharp Consulting Agreement. In connection with his transition to an advisor, on October 15, 2021,
we entered into a consulting agreement with Mr. Sharp, which provides for a term extending to our 2024
annual meeting of stockholders. The consulting agreement provides for continued vesting in his
outstanding equity awards, subject to his continued service as an advisor, and does not provide for any
additional compensation. After October 15, 2022, either party may terminate the agreement upon 30 days’
written notice. Mr. Sharp is not eligible for severance in the event of such a termination by the company;
however, Evan Sharp does remain eligible for equity acceleration under his original severance and
change in control agreement.
CEO PAY RATIO
The following table presents the ratio of the total compensation of our CEO to that of our median
employee for the year ended December 31, 2021.
Chief Executive Officer total compensation
Median Employee total compensation
Ratio of Chief Executive Officer to Median Employee total compensation
199,100
284,887
0.7 to 1.0
This ratio is a reasonable estimate calculated in a manner consistent with SEC rules.
To identify the median employee, we analyzed the compensation of all of our employees, excluding our
CEO, whether employed on a full-time, part-time, temporary or seasonal basis as of December 31, 2021.
We did not include any contractors or other non-employee workers in our employee population.
34
To identify the median employee, we used a consistently applied compensation measure consisting of the
sum of base salary rate, actual bonus and the grant date fair value of equity awards granted during the
12-month period from January 1, 2021 through December 31, 2021 for all applicable employees as
described above. In the case of non-U.S. employees, payments not made in U.S. dollars were converted
to U.S. dollars using the average applicable currency exchange rates for the month of December 2021.
Using the methodology described above, the median employee we identified is a full-time employee
based in the United States. We calculated the total compensation for the median employee using the
same methodology used to report the total compensation of our named executive officers in the 2021
Summary Compensation Table.
The total compensation for our median employee was then compared to the total compensation of our
CEO as reported in the ‘‘Total’’ column of our 2021 Summary Compensation Table in this Proxy Statement
to determine the pay ratio.
Because the SEC rules for identifying the median employee and calculating the pay ratio allow companies
to use different methodologies, exemptions, estimates and assumptions, our pay ratio may not be
comparable to the pay ratio reported by other companies.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2021, with respect to the shares of our
common stock that may be issued under our 2009 Stock Plan and 2019 Omnibus Incentive Plan.
Securities to be Issued upon
Exercise of Outstanding
Options, Warrants and
Rights
(#)
Weighted-Average Exercise
Price of Outstanding
Options, Warrants and
Rights
($)
Securities Remaining
Available for Future
Issuance under Equity
Compensation Plans
(#)
52,398,841(2)
—
3.20(3)
—
126,949,622(4)
—
Plan Category
Plans approved by
security holders(1)
Plans not approved by
security holders
(1)
(2)
(3)
(4)
The 2019 Omnibus Incentive Plan provides that the number of shares reserved and available for issuance under the 2019
Omnibus Incentive Plan will automatically increase on each January 1, commencing on January 1, 2020 through and including
January 1, 2029, in an amount equal to 5% of the total number of shares of Class A and Class B common stock outstanding
on the immediately preceding December 31.
Includes 11,468,345 shares of Class B common stock issuable upon vesting of RSUs awarded under our 2009 Stock Plan and
15,505,044 shares of Class B common stock issuable upon exercise of outstanding options granted under our 2009 Stock
Plan. Each share of our Class B common stock is convertible at any time at the option of the holder into one share of our
Class A common stock. Each share of our Class B common stock will convert automatically into one share of our Class A
common stock upon any transfer, whether or not for value, except certain transfers to entities, including certain charities and
foundations, to the extent the transferor retains sole dispositive power and exclusive voting control with respect to the shares
of Class B common stock, and certain other transfers described in our amended and restated certificate of incorporation. Upon
the death or permanent incapacity of each holder of Class B common stock who is a natural person, the Class B common
stock held by that person or his or her permitted estate planning entities will convert automatically into Class A common stock.
However, shares of Class B common stock held by Benjamin Silbermann or his permitted estate planning entities or other
permitted transferees will not convert automatically into Class A common stock until a time that is between 90 and 540 days
after his death or permanent incapacity, as determined by the board of directors. In addition, all shares of Class B common
stock will automatically convert into shares of Class A common stock on (i) the seven-year anniversary of the closing date of
this offering, except with respect to shares of Class B common stock held by any holder that continues to beneficially own at
least 50% of the number of shares of Class B common stock that such holder beneficially owned immediately prior to
completion of this offering; and (ii) a date that is between 90 and 540 days, as determined by the board of directors, after the
death or permanent incapacity of Mr. Silbermann. Includes 22,854,437 shares of Class A common stock issuable upon vesting
of RSUs and 1,935,122 shares of Class A common stock issuable upon vesting of RSAs awarded under our 2019 Omnibus
Incentive Plan as well as 635,893 shares of Class A common stock issuable upon exercise of outstanding options granted
under our 2019 Omnibus Incentive Plan.
Excludes RSAs and RSUs as they have no exercise price.
Reflects shares available for future issuance under the 2019 Omnibus Incentive Plan (excluding shares underlying outstanding
awards).
35
OTHER MATTERS
Executive Officers
The following table sets forth information for our executive officers as of March 30, 2022. Our executive
officers are appointed by and serve at the discretion of the board, and each holds office until his or her
successor is duly elected and qualified or until his or her earlier resignation or removal. There are no
family relationships among any of our directors or executive officers.
Name
Benjamin Silbermann*
Christine Flores
Naveen Gavini
Todd Morgenfeld
Age
39
47
34
50
Position
Co-Founder, Chairman, President & Chief Executive Officer
General Counsel & Corporate Secretary
Senior Vice President, Head of Products
Chief Financial Officer and Head of Business Operations
*
See ‘‘Our Board of Directors’’ for the background for Mr. Silbermann.
Christine Flores has served as our General Counsel and Corporate Secretary since May 2017. Prior to
joining Pinterest, Ms. Flores served at Google, a technology company, from 2007 to 2017, most recently
as Vice President of Legal. Previously, she was an attorney at law firms, including Proskauer Rose LLP
and Skadden, Arps, Slate, Meagher & Flom LLP, where she advised public and private companies on a
wide range of transactional matters. Ms. Flores holds a Juris Doctor and Bachelor of Arts from the
University of Southern California.
Naveen Gavini has served as our Senior Vice President, Head of Products since April 2020. In his role,
he oversees all design and product efforts for both consumer and advertiser products. Prior to this role,
he led the design and engineering functions. Prior to joining Pinterest in 2012, he worked at Yahoo! Inc., a
web services provider. He currently serves on the board of TextNow, Inc. He holds a Bachelor of Science
degree in Computer Science and Engineering from Rutgers University.
Todd Morgenfeld has served as our Chief Financial Officer since November 2016. In May 2020, he
assumed the role of Head of Business Operations as well. Prior to joining Pinterest, he served as Vice
President of Finance at Twitter, Inc., a social networking company, from 2015 to 2016 and Treasurer and
Senior Vice President of Corporate Development and Corporate Financial Analytics at Hewlett-Packard
Company, a multinational information technology company, from 2013 to 2015. He served as an
investment partner at Silver Lake, a private equity firm, from 2004 to 2013. He currently serves on the
board of Urban Outfitters, Inc. Mr. Morgenfeld holds a Master of Business Administration from Stanford
Graduate School of Business and a Bachelor of Science from the United States Military Academy, where
he graduated first in his class.
36
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial ownership of our Class A
common stock and Class B common stock as of March 31, 2022, by: (i) each director and nominee for
director; (ii) each named executive officer; (iii) all current executive officers and directors as a group; and
(iv) each person or group known by us to be the beneficial owner of more than 5% of our Class A
common stock or Class B common stock. We have determined beneficial ownership in accordance with
the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner
of securities if such person has or shares the power to vote (or direct the voting) or to dispose (or direct
the disposition) of such securities or has the right to acquire these powers within 60 days. Unless
otherwise indicated, and subject to community property laws where applicable, based on the information
available to us, the company believes that each of the stockholders named in the table has sole voting
and investment power over the reported shares. Unless otherwise indicated, the address for each
stockholder is c/o Pinterest at the company’s address set forth on the first page of this proxy statement.
Applicable percentages are based on 573,584,856 shares of Class A common stock and 88,669,555
shares of Class B common stock outstanding as of March 31, 2022, adjusted as required by SEC rules.
We have deemed shares of our Class B common stock subject to stock options that are currently
exercisable or exercisable within 60 days of March 31, 2022 to be outstanding and to be beneficially
owned by the person holding the stock option for the purpose of computing the percentage ownership of
that person only. We have deemed shares of our Class A common stock and of our Class B common
stock subject to RSUs that are expected to become vested within 60 days of March 31, 2022 to be
outstanding and to be beneficially owned by the person holding the RSUs for the purpose of computing
the percentage ownership of that person only.
The Class B common stock is convertible at any time by the holder into shares of Class A common stock
on a share-for-share basis, such that each holder of Class B common stock beneficially owns an
equivalent number of shares of Class A common stock. Percentage of total voting power represents
voting power with respect to all shares of our Class A common stock and Class B common stock, voting
together as a single class, with each share of our Class A common stock entitled to one vote per share
and each share of our Class B common stock entitled to 20 votes per share. The holders of our Class A
common stock and Class B common stock vote together as a single class on all matters submitted to a
vote of our stockholders, except as may be otherwise required by law or our amended and restated
certificate of incorporation.
37
The information provided in the table is based on our records, information filed with the SEC and
information provided to us, except where otherwise noted.
Name of Beneficial Owner
Named Executive Officers and Directors
Benjamin Silbermann (1)
Evan Sharp (2)
Christine Flores (3)
Naveen Gavini (4)
Todd Morgenfeld (5)
Jeffrey Jordan (6)
Lesley Kilgore (7)
Jeremy Levine (8)
Gokul Rajaram (9)
Fredric Reynolds (10)
Salaam Coleman Smith (11)
Andrea Wishom (12)
All directors and executive officers as a group (13)
Other 5% Stockholders
Paul Sciarra (14)
The Vanguard Group (15)
T.Rowe Price (16)
Class A Common Stock
Class B Common Stock
Shares
% of
Class
Shares
—
—
—
115,817
—
271,307
40,767
1,177,511
34,572
67,092
6,242
7,805
1,721,113
—
—
—
*
*
*
*
*
*
*
—
—
*
26
49,170,184
32,359,618
*
8.57
5.64
43,656,070
4,631,073
55,972
—
—
—
6,838
—
—
100,000
—
—
48,449,953
38,442,589
—
—
% of
Class
49.23
5.22
*
—
—
—
—
—
—
*
—
—
54.64
43.35
—
—
% of Total
Voting
Power
37.20
3.95
*
*
*
*
*
*
*
*
—
—
41.36
32.76
2.10
1.38
*
(1)
(2)
(3)
(4)
Represents beneficial ownership or voting power of less than one percent
Includes (i) 651,403 shares of Class B common stock held by Benjamin Silbermann; (ii) 38,916,888 shares of Class B
common stock held by Benjamin W. Silbermann and Divya Silbermann, as trustees of the Benjamin and Divya Silbermann
Family Trust (the ‘‘Trust’’); (iii) 3,971,112 shares of Class B common stock issuable upon exercise of outstanding stock options
held by Mr. Silbermann; and (iv) 116,667 shares of Class B common stock issuable in connection with RSUs that will vest
within 60 days of March 31, 2022. Mr. Silbermann and Ms. Silbermann have sole voting and dispositive power over the shares
held by the Trust and may therefore be deemed to beneficially own such shares. Does not include 9,960,030 shares of
Class B common stock held by an LLC that is owned by a trust, the beneficiaries of which include certain of Mr. Silbermann’s
immediate family members. Mr. Silbermann does not have dispositive power or voting power over the shares held by the LLC
and, as a result, Mr. Silbermann is deemed not to be a beneficial owner of the shares held by the LLC and such shares are not
included in the table. In addition, Mr. Silbermann holds 933,334 unvested RSUs for which Mr. Silbermann does not have the
right to acquire beneficial ownership of the underlying shares of Class B common stock within 60 days of March 31, 2022 and
therefore are not included in the table.
Includes (i) 332,156 shares of Class B common stock held by Evan Sharp; (ii) 2,526,244 shares of Class B common stock
issuable upon exercise of outstanding stock options held by Evan Sharp; (iii) 1,002,371 shares of Class B common stock
issuable upon exercise of outstanding stock options held by the Sharp Family Investments LLC Fund I; (iv) 509,900 shares of
Class B common stock issuable upon exercise of outstanding stock options held by the Sharp Family Investments LLC Fund
2; (v) 143,735 shares of Class B common stock issuable upon exercise of outstanding stock options held by the Sharp Family
Investments LLC Fund 3; and (vi) 116,667 shares of Class B common stock issuable in connection with RSUs that will vest
within 60 days of March 31, 2021. In addition, Mr. Sharp holds 933,334 unvested RSUs for which Mr. Sharp does not have the
right to acquire beneficial ownership of the underlying shares of Class B common stock within 60 days of March 31, 2022 and
therefore are not included in the table.
Includes (i) 55,972 shares of Class B common stock. Ms. Flores also holds (i) 174,999 unvested RSUs for which Ms. Flores
does not have the right to acquire beneficial ownership of the underlying shares of Class B common stock within 60 days of
March 31, 2022; and (ii) 294,872 unvested RSAs for which Ms. Flores does not have the right to acquire beneficial ownership
of the underlying shares of Class A common stock within 60 days of March 31, 2022 and therefore are not included in the
table.
Includes 115,817 shares of Class A common stock held by Mr. Gavini. Mr. Gavini also holds (i) 33,332 unvested RSUs for
which Mr. Gavini does not have the right to acquire beneficial ownership of the underlying shares of Class A common stock
within 60 days of March 31, 2022; and (ii) 424,716 unvested RSAs for which Mr. Gavini does not have the right to acquire
beneficial ownership of the underlying shares of Class A common stock within 60 days of March 31, 2022 and therefore are
not included in the table.
(5) Mr. Morgenfeld holds (i) 349,998 unvested RSUs for which Mr. Morgenfeld does not have the right to acquire beneficial
ownership of the underlying shares of Class B common stock within 60 days of March 31, 2022; and (ii) 641,025 unvested
RSAs for which Mr. Morgenfeld does not have the right to acquire beneficial ownership of the underlying shares of Class A
common stock within 60 days of March 31, 2022 and therefore are not included in the table.
(6)
Includes (i) 23,111 shares of Class A common stock held by Mr. Jordan; (ii) 244,215 shares of Class A common stock held by
Jordan Family Revocable Trust; and (iii) 3,981 shares of Class A common stock issuable in connection with RSUs that will vest
within 60 days of March 31, 2022.
38
(7)
(8)
(9)
(10)
(11)
(12)
Includes (i) 3,981 shares of Class A common stock issuable in connection with RSUs that will vest within 60 days of March 31,
2022; (ii) 36,786 shares of Class A common stock held by the JLK Family Legacy Trust, of which Ms. Kilgore is a trustee; and
(iii) 6,838 shares of Class B common stock.
Includes (i) 1,173,530 shares of Class A common stock held by Mr. Levine; and (ii) 3,981 shares of Class A common stock
issuable in connection with RSUs that will vest within 60 days of March 31, 2022.
Represents (i) 26,634 shares of Class A common stock held by Mr. Rajaram; (ii) 3,957 shares of Class A common stock held
by Gokul Rajaram & Tamara Lucero-Rajaram Trustees Rajaram Family Revocable Trust, of which Mr. Rajaram is a Trustee;
and (iii) 3,981 shares of Class A common stock issuable in connection with RSUs that will vest within 60 days of March 31,
2022. Mr. Rajaram holds 6,598 unvested RSUs for which he does not have the right to acquire beneficial ownership of the
underlying shares of Class A common stock within 60 days of March 31, 2022 and therefore are not included in the table.
Includes (i) 63,111 shares of Class A common stock held by Mr. Reynolds; (ii) 100,000 shares of Class B common stock held
by Mr. Reynolds; and (iii) 3,981 shares of Class A common stock issuable in connection with RSUs that will vest within 60 days
of March 31, 2022.
Includes (i) 2,261 of Class A common stock held by Ms. Coleman; and (ii) 3,981 shares of Class A common stock issuable in
connection with RSUs that will vest within 60 days of March 31, 2022. Ms. Coleman also holds 4,524 unvested RSUs for which
Ms. Coleman does not have the right to acquire beneficial ownership of the underlying shares of Class A common stock within
60 days of March 31, 2022 and therefore are not included in the table.
Includes (i) 3,824 shares of Class A common stock held by Ms. Wishom; and (ii) 3,981 shares of Class A common stock
issuable in connection with RSUs that will vest within 60 days of March 31, 2022. Ms. Wishom also holds 7,650 unvested
RSUs for which Ms. Wishom does not have the right to acquire beneficial ownership of the underlying shares of Class A
common stock within 60 days of March 31, 2022 and therefore are not included in the table.
(13) Consists of (i) 1,693,246 shares of Class A common stock owned directly and indirectly by our directors and executive officers;
(ii) 40,062,257 shares of Class B common stock owned directly and indirectly by our directors and executive officers;
(iii) 8,153,362 shares of Class B common stock issuable to our executive officers and directors under outstanding stock
options; (iv) 233,334 shares of Class B common stock issuable in connection with RSUs that will vest within 60 days of
March 31, 2022; and (v) 27,867 shares of Class A common stock issuable in connection with RSUs that will vest within
60 days of March 31, 2022. Excludes 2,391,665 unvested RSUs currently held by our executive officers and directors for
which such persons do not have the right to acquire beneficial ownership of the underlying shares of Class B common stock
and 52,104 unvested RSUs and 1,360,613 RSAs held by our executive officers and directors for which such persons do not
have the right to acquire beneficial ownership of the underlying shares of Class A common stock, in each case within 60 days
of March 31, 2022.
(14) Based on information provided to us by Paul Sciarra, includes (i) 24,121,984 shares of Class B common stock held by Paul
Cahill Sciarra, as Trustee of the Sciarra Management Trust; (ii) 6,355,155 shares of Class B common stock held by PCS
Legacy LLC, a limited liability company the sole member of which is PCS Legacy Trust; and (iii) 7,965,450 shares of Class B
common stock and 26 shares of Class A common stock held by PCS Remainder LLC, a limited liability company the sole
member of which is PCS Remainder Trust. Mr. Sciarra has voting, investment and dispositive power over the shares held in
Sciarra Management Trust and therefore may be deemed to be the beneficial owner of such shares. The PCS Legacy Trust,
as the sole member of the PCS Legacy LLC, owns the shares held by PCS Legacy LLC, and the PCS Remainder Trust, as the
sole member of the PCS Remainder LLC, owns the shares held by PCS Remainder LLC. Mr. Sciarra, in his capacity as the
protector of each of the PCS Legacy Trust and the PCS Remainder Trust, has the authority to remove and replace the trustee
of these trusts and as such may be deemed to have voting, investment and dispositive power over the shares held by these
trusts through the respective LLCs. The address for U.S. Trust Company of Delaware, as agent for Sciarra Management Trust
is 2951 Centerville Road, Suite 200, Wilmington, DE 19808. The address for the PCS Legacy LLC and PCS Remainder LLC is
the Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.
(15) Based on the Schedule 13G/A filed with the SEC by The Vanguard Group on February 9, 2022 reporting ownership of
49,170,184 shares of Class A common stock as of December 31, 2021 with shared voting power with respect to 540,109
shares, sole dispositive power with respect to 47,948,095 shares and shared dispositive power with respect to 1,222,089
shares. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
(16) Based on the Schedule 13G/A filed with the SEC by T.Rowe Price Associates, Inc. on February 14, 2022 reporting ownership
of 32,359,618 shares of Class A common stock as of December 31, 2021, with sole voting power with respect to 11,572,063
shares and sole dispositive power with respect to 32,359,618 shares. The address of T.Rowe Price Associates, Inc.. is 100 E.
Pratt Street, Baltimore, Maryland 21202.
Related Party Transactions
Policies and procedures. Pursuant to our written related party transaction policy, the audit committee
has the primary responsibility for reviewing and approving or ratifying related party transactions. A related
party includes our directors, executive officers, beneficial owners of more than 5% of our voting securities,
or any member of the immediate family or person sharing the household with the foregoing persons. A
related party transaction is a current or proposed transaction, arrangement or relationship in which our
company was, is or will be a participant and the amount involved exceeds or is expected to exceed
$120,000 in any fiscal year and in which any related party has, had or will have a direct or indirect
material interest.
The audit committee, while reviewing a related party transaction for approval or ratification, will consider
various factors, including the benefit of the transaction to us, the terms of the transaction and whether it is
at arm’s-length and in the ordinary course of our business, the direct or indirect nature of the related
39
person’s interest in the transaction, the size and expected term of the transaction, and other facts and
circumstances that bear on the materiality of the related party transaction. If advance approval of a
related party transaction is not feasible, the chair of the audit committee may approve the transaction and
such transaction may be ratified by the audit committee in accordance with our written policy.
Related party transactions. Other than as described below, since January 1, 2021, we have not entered
into any transactions, nor are there any currently proposed transactions, between us and a related party
where the amount involved exceeds, or would exceed, $120,000, and in which any related person had or
will have a direct or indirect material interest. We believe the terms of the transactions described below
were comparable to terms we could have obtained in arm’s-length dealings with unrelated third parties.
•
•
Employment arrangement. Ari Simon, our Head of Social Impact, is also employed by an
organization wholly owned by Benjamin Silbermann, our president and chief executive officer,
and his wife. Ari was previously a fixed term employee of Pinterest and in 2021 was converted to
a regular part-time employee of Pinterest. His compensation for 2021 was comprised of a base
salary of $240,000, a RSU grant with an initial value of $400,000 vesting quarterly over four
years and is entitled to benefits similar to full-time Pinterest employees. For 2022, his base
salary has been increased to $244,800 and he received a merit grant with an initial value of
$300,000 vesting quarterly over four years.
Limitation of liability and indemnification for directors and officers. Our certificate of
incorporation eliminates the potential personal monetary liability of our directors to us or our
stockholders for breaches of their duties as directors except as otherwise required under
Delaware law. In addition, our certificate of incorporation and bylaws as well as the
indemnification agreements that we have entered into with our directors and officers provide for
their indemnification to the fullest extent permitted by Delaware law, including payment of
expenses in advance of resolution of any such matter. We also maintain standard policies of
insurance under which, subject to the limitations of the policies, coverage is provided (i) to our
directors and officers against loss arising from claims made by reason of breach of duty or other
wrongful acts as a director or officer, including claims relating to public securities matters, and
(ii) to us with respect to payments which we may make to such officers and directors pursuant to
our indemnification obligations or otherwise as a matter of law.
In addition, from time to time, we do business with other companies, including advertisers, affiliated with
certain holders of our capital stock. We also believe that all such arrangements have been entered into in
the ordinary course of business and have been conducted on an arm’s-length basis.
Certain Legal Matters
For a description of stockholder derivative lawsuits involving certain executives and members of the board,
refer to Note 7. Commitments and Contingencies to our consolidated financial statements in our 2021 Annual
Report on Form 10-K available at https://investor.pinterestinc.com/financial-results/sec-filings.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own
more than 10% of a registered class of our equity securities, to file with the SEC initial reports of
ownership and reports of changes in ownership of such securities. To our knowledge, based solely on a
review of such reports filed with the SEC and written representations that no other reports were required,
during 2021, we believe that all required reports were timely filed, except that, due to administrative error
the following forms were filed late:
•
•
•
one Form 3 to report Class A and Class B shares held by Naveen Gavini and one Form 4 to
report a conversion of Class B to Class A shares for Naveen Gavini;
one Form 4 to report a conversion of Class B to Class A shares for Leslie Kilgore; and
one Form 4 to report three conversions of Class B to Class A shares for those shares pursuant
to a Rule 10b5-1 trading plan for Evan Sharp.
40
Stockholder Proposals for the 2023 Annual Meeting
Proposals to be included in our proxy statement. Pursuant to Rule 14a-8 under the Exchange Act,
stockholders may present proper proposals for inclusion in our proxy statement and for consideration at
our 2023 annual meeting. To be eligible, your proposal must be received by our Corporate Secretary at
the company’s address (see the first page of this proxy statement) no later than the close of business on
December 14, 2022, and must otherwise comply with Rule 14a-8. While the board will consider
stockholder proposals that we receive, we reserve the right to omit from our proxy statement stockholder
proposals that do not satisfy applicable SEC rules.
Other proposals and director nominations to be presented at the 2023 annual meeting. Under our
bylaws, in order to nominate a director or bring any other business before the stockholders at the 2023 annual
meeting that will not be included in our proxy statement pursuant to Rule 14a-8, you must comply with the
procedures and timing specifically described in our bylaws. Assuming that the 2023 annual meeting occurs
within 30 days before or after the anniversary of the 2022 annual meeting, stockholders desiring to nominate a
director or bring any other business before the stockholders at the 2023 annual meeting must notify our
Corporate Secretary in writing not earlier than January 26, 2023, and not later than February 25, 2023. Such
notice must set forth certain information specified in our bylaws. In addition to complying with the advance
notice provisions above, a stockholder who intends to solicit proxies pursuant to Rule 14a-19 in support of
nominees submitted under these advance notice provisions for our 2023 annual meeting must notify our
Corporate Secretary in writing not later than the close of business on March 27, 2023. All stockholder
proposals should be in writing and be submitted to the Corporate Secretary at the company’s address on the
first page of this proxy statement. We advise you to review our bylaws, which set forth the requirements for the
nomination of director candidates and the presentation of proposals by stockholders. Our bylaws can be found
on our website at https://investor.pinterestinc.com/governance/governance-documents, or you may obtain a
copy free of charge by contacting the Corporate Secretary at the company’s address on the first page of this
proxy statement.
41
VOTING AND ANNUAL MEETING INFORMATION
Meeting Information
Why have these proxy materials been made available to me? These materials are available in
connection with the board’s solicitation of proxies to be voted at the annual meeting. The annual meeting
is being held to elect three Class III directors to hold office until the 2025 annual meeting (Proposal 1),
ratify the selection of Ernst & Young as our independent auditor for 2022 (Proposal 2) and approve, in an
advisory non-binding vote, the compensation of our named executive officers (Proposal 3). All
stockholders who held shares of our common stock as of the close of business on the record date,
March 30, 2022, are entitled to attend the annual meeting and to vote on the items of business outlined
above. Whether or not you choose to attend the annual meeting, we urge you to vote your shares online
as soon as possible so that your shares are represented at the annual meeting.
How can I attend the meeting? The annual meeting will be held exclusively online at
www.virtualshareholdermeeting.com/PINS2022 on Thursday, May 26, 2022 at 8:00 a.m. Pacific Time. We
invite all Pinterest stockholders as of the record date to attend the annual meeting. Through the virtual
annual meeting format, you will be able to participate in the annual meeting online, vote your shares
electronically and submit questions. We encourage you to access the annual meeting prior to the start
time, and you should allow ample time to log in to the annual meeting webcast and test your computer
audio system.
Stockholders of record as of the record date are entitled to participate in the annual meeting. To log in to
the annual meeting, stockholders of record should go to the meeting website, enter the 16-digit control
number included on your notice of internet availability of proxy materials or proxy card, and follow the
instructions on the website.
If your shares are held in street name and your voting instruction form or notice of internet availability of
proxy materials indicates that you may vote those shares through www.proxyvote.com, then you may
access and participate in the annual meeting with the 16-digit access code indicated on that voting
instruction form or notice of internet availability of proxy materials. Otherwise, stockholders who hold their
shares in street name should contact their bank, broker or other nominee (preferably at least 5 days
before the annual meeting) and obtain a ‘‘legal proxy’’ in order to be able to attend, and participate in the
annual meeting.
Why a virtual meeting? We have adopted a virtual format to provide a consistent experience to all
stockholders regardless of location, expand stockholder access to the annual meeting, achieve cost
savings for stockholders and Pinterest, and reduce the environmental impact of the annual meeting.
Hosting a virtual annual meeting enables increased stockholder attendance and participation since
stockholders can participate from any geographic location with internet connectivity. We have structured
the virtual format so that it offers the same participation opportunities that would be provided at an
in-person annual meeting. In particular:
•
•
You can submit questions in advance of and during the annual meeting. Our question and
answer session will include questions submitted both in advance of and live during the annual
meeting. If you are a stockholder of record, or hold shares in street name and your voting
instruction form or notice of internet availability of proxy materials indicated you may vote
through www.proxyvote.com, you may submit a question in advance of the annual meeting at
www.proxyvote.com or during the annual meeting at
www.virtualshareholdermeeting.com/PINS2022, in each case by logging in with your 16-digit
control number. We plan to answer as many questions during the annual meeting as time
permits. Information regarding the types of questions permitted will be available in the meeting
rules of conduct, which will be posted on the virtual meeting website during the meeting.
Tech support will be available to facilitate your access to the annual meeting. We
encourage you to access the annual meeting before it begins. Online check-in will start shortly
42
before the annual meeting on May 26, 2022. We will have technicians available to assist you. If
you have difficulty accessing the annual meeting, please follow the instructions at the annual
meeting website to connect with a technician via phone.
Following the annual meeting, we will make available a replay of the entire annual meeting on our
investor relations website (see the first page of this proxy statement).
What constitutes a quorum? A quorum of stockholders is necessary to transact business at the annual
meeting. A quorum exists if the holders of at least a majority of the voting power of the issued and
outstanding shares entitled to vote are represented at the annual meeting, either by attending and voting
at the annual meeting or by proxy. Abstentions and broker non-votes will be counted in determining if
there is a quorum. If there is no quorum, either the chairperson of the annual meeting or the holders of a
majority of the voting power of the shares represented at the annual meeting may adjourn the annual
meeting to another date.
Voting Information
Who is eligible to vote? Only stockholders of record at the close of business on the record date are
entitled to vote at the annual meeting. As of the record date, there were 573,584,856 shares of Class A
common stock and 88,669,555 shares of Class B common stock outstanding and entitled to vote.
How many votes per share do I have? Our Class A common stock has one vote per share and our
Class B common stock has twenty votes per share. Our Class A and Class B common stock will vote
together as a single class on all matters to be voted upon at the annual meeting.
How can I vote? Your voting options depend on how you hold your shares. You may vote as follows if
you are a stockholder of record as of the record date or if you hold your shares in street name and your
voting instruction form or notice of internet availability of proxy materials indicates that you may vote these
shares through www.proxyvote.com:
•
•
At the annual meeting, by following the log in procedures described above and completing the
online form during the annual meeting.
Before the annual meeting, online, by going to www.proxyvote.com and following the prompts.
Otherwise, stockholders who hold their shares in street name should follow the voting instructions
received from their broker, bank or other agent. If you received a paper copy of the proxy materials, you
may also vote by mail (by completing, signing and dating the enclosed proxy card or voting instruction
card and returning it promptly in the envelope provided) or over the phone.
You can vote over the phone or online until 11:59 p.m., Eastern Time on the day before the annual
meeting. If you vote by mail, your proxy or voting instruction card, as applicable, must be received by the
day before the annual meeting. You may still attend and vote at the annual meeting even if you have
already voted by proxy.
How can I change my vote? You can revoke your proxy at any time before the final vote at the annual
meeting. You can also change your vote by attending and voting at the annual meeting. Please note that
simply attending the annual meeting will not, by itself, revoke your proxy. In addition:
•
•
If you are the beneficial owner, you can also change your vote or revoke your voting instruction
by following the instructions provided by the broker, bank or other agent through which your
shares are held.
If you are the stockholder of record, you can also change your vote or revoke your proxy by
submitting a subsequent proxy or by sending a timely written notice that you are revoking your
proxy to the Corporate Secretary at the company’s address (see the first page of this proxy
statement). Such notice will be considered timely if it is received by the day before the annual
meeting.
43
Who will count the votes? Votes will be tabulated by Broadridge Financial Solutions, Inc.
(‘‘Broadridge’’), and the board has appointed Broadridge to serve as our independent inspector of
election.
What if I am a record holder and I do not submit voting instructions? If you complete and submit
your proxy, the persons named as proxies will vote your shares in accordance with your instructions. If
you submit a proxy but do not complete the voting instructions, the persons named as proxies will vote
your shares in accordance with the board’s recommendations below. If you do not submit a proxy or vote
at the annual meeting, your shares will not be voted.
What if I am a street-name holder and I do not submit voting instructions? You may instruct your
broker, bank or other agent on how to vote your shares by following the instructions they provided with the
proxy materials. If you do not do so, the firm has discretion to vote your shares only with respect to
Proposal 2, which we expect be considered a ‘‘routine’’ matter under NYSE rules. Proposals 1 and 3 are
not considered ‘‘routine’’ matters, and the firm that holds your shares will not have discretionary authority
to vote your shares for these proposals if you do not provide voting instructions. This is called a ‘‘broker
non-vote.’’ Therefore, you are encouraged to return your voting instructions so that your shares are voted
at the annual meeting.
What vote is necessary to approve each proposal and what are the board’s recommendations?
The following table sets forth the voting requirements for each proposal being voted on at the annual
meeting and the board’s recommendations.
Proposal
1. Election of
directors
Board
Recommendation
For each nominee
2. Ratification of
selection of
Ernst & Young
For
3. Advisory
For
non-binding
vote on the
compensation
of our named
executive
officers
Effect of
Required
Vote
Withholding /
Abstentions
Broker Non-
Votes
Plurality of votes cast (nominees
that receive the most FOR votes
will be elected)
No effect
Majority of the voting power of
the shares represented at the
meeting and entitled to vote on
the matter
Majority of the voting power of
the shares represented at the
meeting and entitled to vote on
the matter
Same as a vote
AGAINST
Not counted as
entitled to vote and
so no effect
Not applicable
(brokers have
voting discretion)
Same as a vote
AGAINST
Not counted as
entitled to vote and
so no effect
Each nominee has consented to be a candidate and to serve if elected. Although the board has no reason
to believe that any nominee will be unavailable to serve as a director, if such an event should occur, the
board may designate a substitute nominee or reduce the size of the board. If the board designates a
substitute nominee, proxies will be voted for such substitute nominee(s).
What if other business comes before the annual meeting? We do not expect any other business to
properly come before the annual meeting; however, if any other business should properly come before
the annual meeting, the persons named as proxies will vote your shares on such matters in accordance
with their best judgment.
How can I find out the voting results? We will announce the preliminary voting results at the annual
meeting. Final voting results will be published on a Form 8-K that we expect to file within four business
days after the annual meeting.
Proxy Material Information
Why did I receive a notice in the mail regarding the internet availability of proxy materials instead
of a paper copy of the full set of proxy materials? In accordance with SEC rules, and in order to
expedite our stockholders’ receipt of proxy materials, lower Pinterest’s costs and reduce the
44
environmental impact of the annual meeting, we are making our proxy materials available to stockholders
primarily over the internet. As a result, we are mailing a notice of the internet availability of the proxy
materials to our stockholders instead of a paper copy of the full set of proxy materials. As explained in the
notice, you can view our proxy materials and vote online by visiting www.proxyvote.com and having
available the 16-digit control number contained in your notice. If you received a notice, you will not receive
a printed copy of the proxy materials unless you request one by following the instructions provided in the
notice.
Who pays the cost of the proxy solicitation? We will pay for the costs of soliciting proxies, including
the preparation, assembly, printing and mailing of the proxy materials. In addition, our directors, officers
and employees may also solicit proxies in person, by telephone, or by other means of communication,
without additional compensation. We may also reimburse brokers, banks, fiduciaries, custodians and
other institutions for their costs in forwarding the proxy materials to the street-name holders of our
common stock.
What if I receive multiple notices or proxy or voting instruction cards? If you received more than
one notice of internet availability or proxy or voting instruction card, your shares may be registered in
more than one name or in different accounts. Please follow the voting instructions on each of the notices,
cards or forms to ensure that all of your shares are voted.
How can I sign up to receive future proxy materials by e-mail? We encourage stockholders to take
advantage of electronic delivery to help reduce the cost and environmental impact of the annual meeting.
To sign up for electronic delivery, please visit www.proxyvote.com. Also, if you are a beneficial owner, you
may sign up for electronic delivery by contacting your bank, broker or other agent through which you hold
your shares. Once you sign up, you will not receive a printed copy of the proxy materials unless you
request them.
What is householding? SEC rules permit us, with your permission, to send a single set of proxy
materials, including the notice of internet availability, proxy statement and annual report, to any household
at which two or more stockholders reside if we believe they are members of the same family. This rule is
called ‘‘householding’’ and its purpose is to help reduce printing and mailing costs of proxy materials. To
date, we have not instituted this procedure, but may do so in the future. A number of brokerage firms have
instituted householding. If you and members of your household have multiple accounts holding shares of
our common stock, you may have received a householding notification from your broker. Please contact
your broker directly if you have questions, require additional copies of the proxy materials or wish to
revoke your decision to household. These options are available to you at any time. If you receive a single
set of proxy materials as a result of householding by your broker and you would like to receive separate
copies of the notice of internet availability, proxy statement or annual report, you may also submit a
request to our Corporate Secretary by mail or phone at the company’s address or number (see the first
page of this proxy statement), and we will promptly send you the requested materials.
How can I get a paper copy of Pinterest’s annual report? A copy of our 2021 annual report on
Form 10-K is available without charge upon written request to the Corporate Secretary at the company’s
address (see the first page of this proxy statement).
45
[THIS PAGE INTENTIONALLY LEFT BLANK]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________
FORM 10-K
_________________
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 2021
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from to
Commission file number 001-38872
Pinterest, Inc.
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification No.)
Delaware
26-3607129
505 Brannan Street
San Francisco, California
(Address of Principal Executive Offices, including zip code)
94107
(Zip Code)
(415) 762-7100
Registrant’s Telephone Number, Including Area Code
_______________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Class A Common Stock, $0.00001 par value
PINS
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in
Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☒
☐
Accelerated filer
Smaller reporting company
Emerging growth company
☐
☐
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the closing price of a share of the
registrant’s common stock on June 30, 2021 as reported by the New York Stock Exchange on such date was approximately $40.9 billion.
As of January 28, 2022, there were 569,515,700 shares of the Registrant’s Class A common stock, $.00001 par value per share, outstanding, and 88,629,202
shares of the Registrant’s Class B common stock outstanding.
Portions of the registrant’s definitive Proxy Statement for the 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual
Report on Form 10-K where indicated. Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the
end of the registrant’s fiscal year ended December 31, 2021.
Documents Incorporated by Reference
PINTEREST, INC.
TABLE OF CONTENTS
Note About Forward-Looking Statements
Limitations of Key Metrics and Other Data
Item 1.
Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.
Properties
Item 3.
Legal Proceedings
Item 4. Mine Safety Disclosures
Part I
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6.
[Reserved]
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosure About Market Risk
Item 8.
Financial Statements and Supplementary Data
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Part III
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services
Part IV
Item 15. Exhibits and Financial Statement Schedules
Item 16. Form 10-K Summary
Signatures
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NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which
statements involve substantial risk and uncertainties. Forward-looking statements can be identified by the fact that
they do not relate strictly to historical or current facts and are often characterized by the use of words such as
“believes,” “estimates,” “expects,” “projects,” “may,” “intends,” “plans”, “targets”, “forecasts” or “anticipates,” or by
discussions of strategy, plans or intentions. Such forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other important factors that could cause our actual results, performance or
achievements, or industry results, to differ materially from historical results or any future results, performance or
achievements expressed, suggested or implied by such forward-looking statements. These risks and uncertainties
include, but are not limited to, statements about:
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uncertainty regarding the duration and scope of the coronavirus, including its variants, referred to as the
COVID-19 pandemic;
actions governments and businesses take in response to the COVID-19 pandemic, including actions that
could affect levels of user engagement or advertising activity;
the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional
economies and economic activity;
general economic uncertainty in key global markets and a worsening of global economic conditions or low
levels of economic growth;
the impact of the COVID-19 pandemic on our planned investments, operations, expenses, revenue, cash
flow, liquidity, users and engagement;
the effect of general economic and political conditions;
our financial performance, including revenue, cost and expenses and cash flows;
our ability to attract, retain and recover Pinners and maintain and grow their level of engagement;
our ability to provide content that is useful and relevant to Pinners’ personal taste and interests;
our ability to develop successful new products or improve existing ones;
our ability to maintain and enhance our brand and reputation;
potential harm caused by compromises in security, including our cybersecurity protections and resources and
costs required to prevent, detect and remediate potential security breaches;
potential harm caused by changes in online application stores or internet search engines’ methodologies,
particularly search engine optimization methodologies and policies;
discontinuation, disruptions or outages in third-party single sign-on access;
our ability to compete effectively in our industry;
our ability to scale our business, including our monetization efforts;
our ability to attract and retain advertisers and scale our revenue model;
our ability to attract and retain creators that create relevant and engaging content;
our ability to develop effective products and tools for advertisers, including measurement tools;
our ability to expand and monetize our platform internationally;
our ability to effectively manage the growth of our business;
our lack of operating history and ability to sustain profitability;
decisions that reduce short-term revenue or profitability or do not produce the long-term benefits we expect;
fluctuations in our operating results;
our ability to raise additional capital on favorable terms or at all;
our ability to realize anticipated benefits from mergers and acquisitions, joint ventures, strategic partnerships
and other investments;
our ability to protect our intellectual property;
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our ability to receive, process, store, use and share data, and compliance with laws and regulations related to
data privacy and content;
current or potential litigation and regulatory actions involving us;
our ability to comply with modified or new laws and regulations applying to our business, and potential harm
to our business as a result of those laws and regulations;
real or perceived inaccuracies in metrics related to our business;
disruption of, degradation in or interference with our use of Amazon Web Services and our infrastructure; and
our ability to attract and retain personnel.
These statements are based on our historical performance and on our current plans, estimates and projections in light
of information currently available to us, and therefore you should not place undue reliance on them. The inclusion of
this forward-looking information should not be regarded as a representation by us or any other person that the future
plans, estimates or expectations contemplated by us will be achieved. Forward-looking statements made in this
Annual Report on Form 10-K speak only as of the date on which such statements are made, and we undertake no
obligation to update them in light of new information or future events, except as required by law.
You should carefully consider the above factors, as well as the factors discussed elsewhere in this Annual Report on
Form 10-K. The factors identified above should not be construed as an exhaustive list of factors that could affect our
future results and should be read in conjunction with the other cautionary statements that are included in this Annual
Report. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those
events or how they may affect us. If any of these trends, risks or uncertainties actually occurs or continues, our
business, revenue and financial results could be harmed, the trading price of our Class A common stock could decline
and you could lose all or part of your investment.
Unless expressly indicated or the context requires otherwise, the terms "Pinterest," "company," "we," "us," and "our" in
this document refer to Pinterest, Inc., a Delaware corporation, and, where appropriate, its wholly owned subsidiaries.
The term "Pinterest" may also refer to our products, regardless of the manner in which they are accessed. For
references to accessing Pinterest on the "web" or via a "website," such terms refer to accessing Pinterest on personal
computers. For references to accessing Pinterest on "mobile," such term refers to accessing Pinterest via a mobile
application or via a mobile-optimized version of our website such as m.pinterest.com, whether on a mobile phone or
tablet.
Summary of Risk Factors
The following summarizes the principal factors that make an investment in our company speculative or risky, all of
which are more fully described in the Risk Factors section below. This summary should be read in conjunction with the
Risk Factors section and should not be relied upon as an exhaustive summary of the material risks facing our
business. The following factors could result in harm to our business, reputation, revenue, financial results, and
prospects, among other impacts:
Business Strategy and Growth. Our strategic decisions and efforts to expand the business, including:
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our ability to scale our business for future growth, as we are in the early stages of our monetization efforts;
our ability to attract, grow, retain, recover, and engage our user base;
providing content that is useful and relevant to Pinners’ personal taste and interests;
decisions consistent with our mission and values that may reduce our short- or medium-term operating
results;
removing objectionable content or blocking objectionable practices by advertisers or third parties;
our ability to compete effectively for users or advertisers and to develop effective products and tools for
advertisers;
our ability to attract and retain creators to create engaging content;
our further expansion and monetization of our platform internationally;
effective management of our business growth; and
our acquisition of other businesses.
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Operation of Our Business. The manner in which we operate our business, including:
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the disruption and harm from the COVID-19 pandemic outbreak, as well as potential challenges of post-
pandemic recovery;
our dependence on and ability to maintain and enhance a strong brand and reputation;
actual or perceived compromises in our security;
our dependence on advertising for substantially all of our revenue;
the development of tools to accurately measure the effectiveness of advertisements on our platform and
thereby attract and maintain advertisers;
the inherent challenges of measurements related to Pinner metrics and other estimates;
our ability to maintain and scale our technology infrastructure, including the speed and availability of our
service; and
the attraction, retention, and loss of our key personnel and other highly qualified personnel.
Third-Party Reliance. Our use and dependence on third-party businesses and products, or the impacts of third-party
business and products, including:
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our dependence on online application stores and internet search engines, including their methodologies,
policies, and results, to direct traffic and refer new Pinners to our service;
users’ ability to authenticate with our service through third-party login providers;
our dependence on Amazon Web Services for the vast majority of our compute, storage, data transfer, and
other services;
effectively operating with mobile operating systems, web browsers, networks, regulations, and standards,
which we do not control, and changes in our products or to those mobile operating systems, web browsers,
networks, regulations or standards; and
our reliance on software, technologies, and related services from other parties; and
technologies that can block the display of our ads.
Legal and Regulatory Matters. The legal and regulatory frameworks, actions, and requirements to which our business,
products, services, and operations are subject, including:
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any liability as a result of content or information that is published or made available on our service;
government action to restrict access to our service or certain of our products in their countries;
the data, including personal information, we receive, process, store, use, and share, which subjects us to
complex and evolving governmental regulation and other legal obligations related to data privacy, data
protection and other matters;
our involvement in any legal disputes or other disputes that are expensive to support and may be resolved
adversely;
an ability to protect our intellectual property and our use of “open source” software; and
the interpretation and application of U.S. tax legislation or other changes in U.S. or non-U.S. taxation of our
operations.
Financial Statements and Performance. The preparation of our financial statements and our financial and operating
performance, including:
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our limited operating history and previously incurred operating losses, anticipated increases to operating
costs, and expenses and our ability to obtain or maintain profitability;
fluctuations in our operating results from quarter to quarter;
our ability to obtain additional financing, if needed and any default on our credit obligations;
greater than anticipated tax liabilities;
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limitations in our ability to use or benefit from our net operating loss carryforwards and certain other tax
attributes; and
the requirements of being a public company.
Our Common Stock. The rights, restrictions, and structure of, and actions that we make take that impact, our common
stock, including:
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the dual class structure of our common stock;
trading price volatility of our Class A common stock;
future offerings of debt or equity securities by us or existing stockholders that could adversely impact the
market price of our Class A common stock;
additional stock issuances, including in connection with settlement of equity awards, and any resulting
dilution;
provisions under Delaware law and our governing documents that could make a merger, tender offer, or proxy
contest difficult;
our certificate of incorporation’s designation of a state or federal court located within Delaware as the
exclusive forum for substantially all disputes between us and our stockholders; and
our intention not to pay dividends for the foreseeable future.
General. The risks common to our industry and public companies generally, including:
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our development of or investment in successful new products or improvements to existing one;
adverse global economic and financial conditions; and
changes in accounting principles generally accepted in the United States.
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LIMITATIONS OF KEY METRICS AND OTHER DATA
The numbers for our key metrics, which include our monthly active users (MAUs) and average revenue per user
(ARPU), are calculated using internal company data based on the activity of user accounts. We define a monthly
active user as an authenticated Pinterest user who visits our website, opens our mobile application or interacts with
Pinterest through one of our browser or site extensions, such as the Save button, at least once during the 30-day
period ending on the date of measurement. Unless otherwise indicated, we present MAUs based on the number of
MAUs measured on the last day of the current period. We measure monetization of our platform through our average
revenue per user metric. We define ARPU as our total revenue in a given geography during a period divided by the
average of the number of MAUs in that geography during the period. We calculate average MAUs based on the
average of the number of MAUs measured on the last day of the current period and the last day prior to the beginning
of the current period. We calculate ARPU by geography based on our estimate of the geography in which revenue-
generating activities occur. We use these metrics to assess the growth and health of the overall business and believe
that MAUs and ARPU best reflect our ability to attract, retain, engage and monetize our users, and thereby drive
revenue. While these numbers are based on what we believe to be reasonable estimates of our user base for the
applicable period of measurement, there are inherent challenges in measuring usage of our products across large
online and mobile populations around the world. In addition, we are continually seeking to improve our estimates of
our user base, and such estimates may change due to improvements or changes in technology or our methodology.
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PART I
Item 1. Business
Overview
Our mission is to bring everyone the inspiration to create a life they love.
Pinterest is where over 400 million people around the world go to get inspiration to live their best lives. They come to
discover and bring to life ideas for their daily activities like cooking dinner or deciding what to wear; for major
commitments like remodeling a house or training for a marathon; for ongoing passions like gardening or fashion; and
for milestone events like planning a wedding or a dream vacation.
Our users (who we call Pinners) often don’t have the words to describe what they want, but they know it when they
see it. Images and video can communicate concepts that are impossible to describe with words. On Pinterest, people
discover inspiring and personalized visual content, which we call Pins. Pins are created when Pinners, creators and
businesses make new content for or save existing web content to our platform. Pins are saved and organized into
collections, which we call boards and sections. Browsing and saving visual ideas on our service helps Pinners
imagine what their future could look like, which propels them from inspiration to action.
Pinterest is the productivity tool for planning your dreams. Dreaming and productivity may seem like polar opposites,
but on Pinterest, inspiration enables action and dreams become reality. Visualizing the future helps bring it to life. In
this way, Pinterest is unique. Most consumer internet companies are either tools (search, ecommerce) or media
(newsfeeds, video, social networks). Pinterest is not a pure media channel; it is a media-rich utility.
Pinterest is also unique because we've designed it to be an inspiring platform, that we foster through our policies and
product development -- for example, Pinterest has banned political and weight loss ads, developed inclusive beauty
search functionality and launched compassionate search for Pinners seeking mental health support. This work is
foundational to our mission because we believe people are less likely to imagine their future and bring it to life when
they feel self-conscious, excluded, or unhappy. It also creates value for businesses and brands on the platform
(including our advertising partners), who have the opportunity to showcase their products and services in an inspiring
environment that we believe is conducive to building an emotional connection with consumers.
Our Platform
When people use Pinterest, they interact with several surfaces, each of which offer distinct functionalities and
experiences. Pinners often move between these surfaces multiple times in a single session.
Home Feed
When people open the Pinterest mobile application or navigate to www.pinterest.com, they are by default in their
Home Feed, where they can discover Pins relevant to their tastes and interests in a scrolling format. We have several
types of Pins on our platform, including:
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Standard Pins: Static images that link to content from around the web highlighting products, recipes, style and
home inspiration, DIY, and more.
Video Pins: Short videos from businesses that link to content from around the web on topics like cooking,
beauty and DIY projects.
Product Pins: Product Pins feature items from our catalog inventory that can be purchased and include
metadata on prices and stock availability as well as links to the product page of a retailer’s website.
Idea Pins: Idea Pins are multi-pages of videos, images, text and lists that are natively created on Pinterest.
This format enables creators to show how to bring ideas to life (e.g. how to cook a meal or design a room).
Pinners can choose between two different Home Feed experiences: Browse or Watch. The “Browse” tab is Pinterest’s
traditional inspiration feed (consisting of a two column grid featuring a variety of Standard, Video, Product and Idea
Pins), while the “Watch” tab is an immersive feed of full-screen, auto-playing Idea Pins.
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Both Browse and Watch are powered by machine learning recommendations that dynamically reflect the taste and
interests of each Pinner. Pinners using these tabs will also see Pins from the people, topics and boards they choose
to follow.
Search and Shop
On the Search surface, Pinners can find Pins, boards, creators and brands by typing a query in the search bar.
Pinners can choose to view their search results on an Explore tab or a Shop tab. Explore results include relevant Pins
personalized for the Pinner’s individual taste, while Shop results include relevant Product Pins that are shoppable and
link to a retailer’s product page. Pinners who use search typically want to see many relevant possibilities that are
personalized for their individual taste and interests rather than one perfect answer. The Explore and Shop tabs
include search guides that help narrow results (e.g., a search for “summer outfits” yields search guides titled “beachy,”
“monochromatic,” and “vintage”).
Searches on Pinterest also happen when a Pinner taps on a Pin on any surface to learn more about an idea or image,
and a feed of visually similar Pins is served beneath the tapped image. These related Pins help Pinners springboard
off a point of inspiration to explore deeper into an interest or narrow in on the perfect product. Pinners also visually
search within images by using our Lens tool to select specific objects inside an inspiring scene e.g., a lamp in a living
room scene or a pair of shoes in a street fashion scene. This action automatically triggers a new search that yields
related Pins that are visually similar to the specific object and that may be shoppable. This experience is powered by
years of investments in computer vision (that can identify objects and attributes within scenes) as well as by our
growing catalog of shoppable inventory.
Create
Users can publish content on Pinterest by making Idea Pins. Pinners can also respond to creator's content with a take
- an Idea Pin generated in response to an original Idea Pin. Our publishing tools encourage the development of
content that features long-lasting, actionable ideas rather than stories designed for ephemeral entertainment. Idea
Pins give creators all the elements they need to tell their story, from in-app video recording to made-for-doing
publishing features like instructions and ingredient templates. Idea Pins show up in many places on Pinterest -
featured prominently in home feed, in the search, on creator profiles and more. Features like Try on and product
tagging are also enabled in Idea Pins, making the content even more actionable and shoppable.
Our Advertising Products
Pinterest reaches over 400 million monthly active users, a significant majority of which are women. We believe the
value of Pinterest’s audience to advertisers is driven not merely by the number of Pinners on our platform or their
demographics, but also by when and why they use Pinterest. People use Pinterest in ways that, when taken together,
can make it uniquely valuable to advertisers.
First, Pinners often come to the platform with an intent to purchase goods or services. Getting inspiration for your
home, your style or your travel typically means that you are actively looking for products and services to buy.
Commercial content from brands, retailers and advertisers is central to Pinterest. This means that relevant ads don’t
compete with native content on Pinterest; instead, they are content. Second, we believe that in-market consumers on
Pinterest tend to be early in their journey toward a purchase and don’t yet know what they want to purchase.
Accordingly, we believe that they are open to discovering new products and brands on Pinterest rather than merely
navigating to brands they already know, as is common on traditional search engines and e-commerce platforms.
We offer both brand and performance ads, with performance representing approximately two-thirds of our revenue for
the year ended December 31, 2021. Brand revenue is billed when an advertiser optimizes an ad campaign around
“brand” objectives like impressions or video views. Performance revenue is billed when an advertiser optimizes an ad
campaign around “performance” objectives like clicks or conversion events.
Because Pinners travel down the entire purchasing funnel on Pinterest, our ad product suite is used by different
advertisers to meet different objectives, including awareness, consideration and sales. Many advertisers use multiple
ad objectives simultaneously to achieve their goals on the platform.
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Awareness Objective.
Pinterest ads appear in the home feed and on search results pages. They echo the visual style of organic Pins and
are fully integrated into the design. A Pinner sees ads as he scrolls through her home feed and search results, looking
for inspiration and ideas.
Consideration and Sales Objectives.
When a Pinner clicks on an ad, he sees an intermediate screen that gives him a closer view of the ad creative as well
as the option to save the ad to a board. He will also be able to swipe up or click to see the advertiser’s online
presence, where he can pursue deeper consideration (by exploring available products and services or signing-up for
memberships) and potentially transact.
Ad Formats
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Standard ad: A static image used to showcase content in a simple vertical image format.
Video ad: Used by advertisers to capture attention and tell a story with a visually engaging format. We
currently offer three video ad formats: standard video, performance video and max width video.
Shopping ad: Similar to a standard ad, used to reach people when they are deciding what to buy. Shopping
ads are exclusive to advertisers who upload their product catalog to Pinterest.
Carousel ad: Multiple static or video in one carousel, used by advertisers to showcase more than one image
or video at a time.
Collection ad: Used by advertisers to display products in action with a hybrid format that mixes lifestyle
imagery and video with featured products.
Idea ad: An Idea ad is an Idea Pin that has been created and promoted by a business. Idea ads can be used
in conjunction with a paid partnership tag from a creator the brand has partnered with. These features are
currently in beta.
Our Advertising System
Ad Auction
All advertisers on Pinterest buy ads through an auction-based system. Our ad auction allows us to serve ads to
Pinners at relevant moments while optimizing business outcomes for advertisers. Today, our advertisers can optimize
their campaigns around four different types of user activity depending on their objectives: impressions ("CPM"), video
views ("CPV"), clicks ("CPC"), and conversion events ("oCPM"), such as checkout or add-to-cart.
Our auction system selects the best ad for each available ad impression, based on the likelihood of a desired action
occurring and how much that action is worth to advertisers. The likelihood of the action occurring depends on a variety
of factors, such as ad relevance and creative quality.
Ad Relevance
Because ads are content on Pinterest, ad relevance is powered by the same principles that drive organic
recommendations.
Advertisers can also target their ads to specific demographics (locations, languages, gender, age), device types,
audiences (such as existing customers or Pinners who recently engaged with their content) and interests or keywords.
Additionally, they can choose whether they want ads to show in Pinners’ search surfaces, home feed or both.
We are building ad products that will allow advertisers to target ads based on a particular consumer’s known aesthetic
preferences and style. Eventually we expect to be able to leverage this Pinterest taste graph to match ad creative to a
Pinner’s individual taste and interests.
Measurement
Measuring the effectiveness of digital spend is a high priority for our advertisers. Our measurement solutions are
aligned to help advertisers recognize the value of an investment on our platform across a variety of objectives. We
enable our advertisers to meet their awareness, consideration and conversion objectives with a number of first-party
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tools to measure campaign effectiveness. We also have leading third-party measurement partners to validate
Pinterest’s performance and measure advertiser results.
Sales and Marketing
Our Go-to-Market Approach
The Pinterest platform enables a diverse group of advertisers to achieve a wide range of objectives. We serve these
advertisers in customized ways depending on their size, sophistication and objectives. We initially built our business
with large consumer packaged goods ("CPG") and retail advertisers in the United States. While this group of
advertisers continues to be a significant driver of our business, we are increasingly focused on building products and
tools to serve mid-sized and small advertisers across a wide range of verticals. This means improving the efficiency of
our ads marketplace, using more automation to optimize for advertiser value, and more effectively measuring the
unique value of advertising on Pinterest. We are also focused on expanding our international advertiser base.
Marketing
To date, we have been able to grow our global user base with relatively low marketing costs given the strength of our
global brand, the utility of our service and unpaid traffic from search engines. We are also continuing to explore paid
marketing efforts, including brand marketing for awareness and comprehension, as well as marketing campaigns
focused on user and advertiser acquisition.
Our Technology Innovation
We believe we have one of the largest image-rich data sets ever assembled. This lets us analyze trends, understand
intent and predict consumer behavior. And, we are just scratching the surface of what is possible. Looking ahead, we
are excited about new technical challenges, including fine-grained image recognition, object-to-object visual search
and large-scale visual search infrastructure.
Our Competition
We primarily compete with consumer internet companies that are either tools (search, ecommerce) or media
(newsfeeds, video, social networks). We compete with companies that are larger and more established such as
Amazon, Facebook (including Instagram), Google (including YouTube), Snap, TikTok and Twitter. Many of these
companies have significantly greater financial and human resources. We also face competition from smaller
companies in one or more high-value verticals, including Allrecipes, Houzz and Tastemade, that offer users engaging
content and commerce opportunities through similar technology or products to ours. We remain focused on emerging
competition as well. We face competition across almost every aspect of our business, particularly users and
engagement, creators, advertising and talent.
Users and Engagement
We compete to attract, engage and retain users and their time and attention. Because our products and those of our
competitors are typically free, we compete based on our brand, product experience, quality, utility and ease of use of
our products. For more information on users and engagement trends, see section titled “Management’s Discussion
and Analysis of Financial Condition and Results of Operations.”
Creators
We compete with other platforms to attract, retain and grow our base of creators. We are building tools to help
creators publish the most visually inspiring, actionable content and developing reward programs to help them build an
audience and a business on Pinterest. However, there are other internet companies that are larger or have been
investing in the creator ecosystem through large reward programs, product innovation, and video infrastructure.
Advertising
We compete for advertising revenue across a variety of formats. We believe our ability to compete effectively depends
on the effectiveness of our service in reaching users early in the decision-making process, amplifying advertisers’
messages and delivering compelling returns on investment. This is driven by a number of factors, including our reach,
relevance and engagement, as well as our brand and advertising products, delivery and measurement capabilities
and other offerings. For more information on trends relating to advertising revenue and growth, see section titled
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
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Talent
We compete to attract and retain highly talented individuals, particularly people with expertise in computer vision,
artificial intelligence and machine learning. We believe we compete for these potential employees by providing a work
environment that offers the opportunity to work on challenging, cutting-edge and inspirational products. For more
information, see “Talent Management and Development” below.
Intellectual Property
Our success is tied in part to our ability to protect our intellectual property and key technological innovations. We rely
on a combination of federal, state and common-law rights in the United States and rights under the laws of other
countries, as well as contractual restrictions, to protect our intellectual property and other proprietary rights. We rely
on a combination of patents, copyrights, trademarks, trade secrets, domain names and other intellectual property
rights to help protect our brand and proprietary technologies. In addition, we generally enter into confidentiality and
invention assignment agreements with our employees and contractors, and confidentiality agreements with other third
parties, in order to limit access to, and disclosure and use of, our confidential information and proprietary technology
and to preserve our rights thereto.
As of December 31, 2021, we had over 360 issued patents and pending patent applications in the United States and
foreign countries relating to aspects of our actual or contemplated operations and technologies. We also had over 580
registered trademarks and trademark applications in the United States and foreign countries, including our “Pinterest”
name and related logos.
We are also dependent on third-party content, technology and intellectual property in connection with our business.
We are presently involved in a number of intellectual property lawsuits, and expect to continue to face allegations from
third parties, including our competitors and “non-practicing entities,” that we have infringed or otherwise violated their
intellectual property rights.
For additional information on risks relating to intellectual property, please see the sections titled “Risk Factors” and “—
Legal Proceedings.”
Government Regulation
We are subject to many U.S. federal and state and foreign laws and regulations that involve matters central to our
business, including laws and regulations that involve data privacy and data protection, intellectual property (including
copyright and patent laws), content regulation, rights of publicity, advertising, marketing, health and safety,
competition, protection of minors, consumer protection, taxation, anti-bribery, anti-money laundering and corruption,
economic or other trade prohibitions or sanctions or securities law compliance. Our business may also be affected by
the adoption of any new or existing laws or regulations or changes in laws or regulations that adversely affect the
growth, popularity or use of the internet, or that significantly restrict or impose conditions on our ability to collect, store,
augment, analyze, use and share data or increase consumer notice or consent requirements before a company can
utilize cookies or other tracking technologies or that increase the liability of content platforms like us. Many relevant
laws and regulations are still evolving and may be interpreted, applied, created or amended in a manner that could
harm our business, and new laws and regulations may be enacted, including in connection with the restriction or
prohibition of certain content or business activities. For example, EU member states are in the process of
implementing the EU Copyright Directive, which may impose significant new burdens on content platforms like us.
We rely on a variety of statutory and common-law frameworks and defenses relevant to the content available on our
service, including the Digital Millennium Copyright Act (“DMCA”), the Communications Decency Act (“CDA”) and the
fair-use doctrine in the United States, and the Electronic Commerce Directive in the European Union. In addition,
various countries around the world have adopted and pending legislations, including the forthcoming Digital Services
Act in the European Union, that may impose additional obligations or liability on us associated with content uploaded
by users to our platform.
We receive, process, store, use and share data, some of which contains personal information. We are therefore
subject to U.S. federal, state, local and foreign laws and regulations regarding data privacy and the collection,
storage, sharing, use, processing, disclosure and protection of personal information and other data from users,
employees or business partners, including the General Data Protection Regulation (“GDPR”) and the California
Consumer Privacy Act (“CCPA”). These laws expand the rights of individuals to control how their personal data is
processed, collected, used and shared, creates new regulatory and operational requirements for processing personal
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data, increases requirements for security and confidentiality and provides for significant penalties for non-compliance.
There are also a number of legislative proposals recently enacted or pending before the U.S. Congress, various state
legislatures and foreign governments concerning content regulation and data protection that could affect us. These
and other laws and regulations that may be enacted, or new interpretation of existing laws and regulations, may
require us to modify our data processing practices and policies and to incur substantial costs in order to comply.
Government authorities outside the United States may also seek to restrict access to or block our service, prohibit or
block the hosting of certain content available through our service or impose other restrictions that may affect the
accessibility or usability of our service in that country for a period of time or even indefinitely. For example, access to
our service has been or is currently restricted in whole or in part in China, India, Kazakhstan and Turkey. In addition,
some countries have enacted laws that allow websites to be blocked for hosting certain types of content or may
require websites to remove certain restricted content.
For additional information, see the sections titled “Risk Factors” and “—Legal Proceedings.”
Seasonality
We have historically experienced seasonality in user growth, engagement and monetization on our platform.
Historically, we have had lower engagement in the second calendar quarter and industry advertising spend tends to
be strongest in the fourth quarter. We did not experience typical seasonal trends in 2020 and 2021 due to the
COVID-19 pandemic. We do not know when we will return to our typical seasonal trends in the future.
Talent Management and Development
In order to fulfill our mission of bringing everyone the inspiration to create a life they love, we strive to attract and
retain top talent. To attract and retain great talent, we strive to create opportunities for our employees to grow and
develop in their careers, supported by competitive compensation, benefits and health and wellness programs, and by
programs that build connections between our employees and their communities. As of December 31, 2021, we had
3,225 full-time employees.
Inclusion and Diversity
We strive to create an inclusive and diverse workplace where employees are empowered to bring their whole,
authentic selves to work every day. We seek for and respect diverse perspectives which can only help us create a
more inclusive and diverse product.
We seek inclusion and diversity at the highest level in our organization. Our board of directors includes directors from
various backgrounds, industries, skills and experience. Our board of nine directors, which is comprised of seven
independent directors, three women and is racially diverse. Our leadership team includes leaders with diverse skills,
experience, racial backgrounds and genders.
Annually, we’ve published a diversity report since 2015 which we make publicly available on our website. We believe it
is important to hold ourselves accountable to creating a diverse workforce. Our diversity report currently includes our
annual hiring goals and how we performed against the goals and our workforce demographic data.
We have also created employee resource groups that are aligned around dimensions of diversity, such as gender,
ethnicity, sexual orientation or other shared attributes, which we believe help build community and enable
opportunities for development.
In June 2020, subsequent to concerns raised by current and former employees, our board of directors established a
Special Committee of the board of directors to independently review Pinterest’s workplace culture and develop
recommendations to further support an inclusive, fair, and respectful workplace. In December 2020, we began
implementing the recommendations of the Special Committee. Amongst other initiatives, we launched an ombuds
program intended to give every employee the opportunity to engage confidentially with neutral, trained professionals
for independent support resolving conflicts in the workplace.
Employee health, safety and benefits
The success of our business is fundamentally tied to the well-being of our people. We are committed to the health,
safety and wellness of our employees. We provide our employees and their families with access to a variety of flexible
and convenient health and wellness programs that support their physical and mental health by providing tools and
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resources to help them improve or maintain their health. In response to the COVID-19 pandemic, we implemented
significant changes that we determined were in the best interest of our employees, as well as the communities in
which we operate, and which comply with government regulations. This includes currently having the vast majority of
our employees work from home, while implementing additional safety measures for employees continuing critical on-
site work.
We provide robust compensation and benefits programs to help meet the needs of our employees. In addition to
salaries, these programs (which vary by country/region) include equity awards, a 401(k) Plan, healthcare and
insurance benefits, health savings and flexible spending accounts, flexible paid time off, family leave, family care
resources, flexible work schedules, employee assistance programs and charitable donation matching, among many
others. We continue to review and update our compensation and benefits. For example, we recently enhanced our
family leave benefits for birthing and adoptive parents effective January 1, 2022 and increased our 401(k) matching
limits.
Learning and development
We help our employees create a career that is inspiring, impactful and ultimately time well spent. We have programs
for open and ongoing conversation towards career growth goals both long term and short term. We also have
workshops dedicated to learning new skills and developing an employee’s career. We set aside a dedicated personal
learning and development budget for every employee.
Corporate Information
We were incorporated in Delaware in October 2008 as Cold Brew Labs Inc. In April 2012, we changed our name to
Pinterest, Inc. Our principal executive offices are located at 505 Brannan Street, San Francisco, California 94107, and
our telephone number is (415) 762-7100. We completed our initial public offering in April 2019 and our Class A
common stock is listed on the New York Stock Exchange under the symbol “PINS.” Unless the context requires
otherwise, the words “Pinterest,” “we,” “Company,” “us” and “our” refer to Pinterest, Inc. and our wholly owned
subsidiaries.
Available Information
is
located at www.pinterest.com, and our
Our website
located at http://
investor.pinterestinc.com/. Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, or the Exchange Act, are available, free of charge, on our investor
relations website as soon as reasonably practicable after we file such material electronically with or furnish it to the
Securities and Exchange Commission, or the SEC. The SEC also maintains a website that contains our SEC filings.
The address of the site is www.sec.gov. We use our http://investor.pinterestinc.com/ and www.pinterest.com websites
as a means of disclosing material nonpublic information and for complying with our disclosure obligations under
Regulation FD of the Exchange Act.
investor relations website
is
The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K
or in any other report or document we file with the SEC, and any references to our websites are intended to be
inactive textual references only.
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Item 1A. Risk Factors
Investing in our Class A common stock involves a high degree of risk. In addition to the other information set forth in
this Annual Report, you should carefully consider the risks and uncertainties described below, together with all of the
other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related
notes, before deciding to invest in our Class A common stock. The occurrence of any of the following risks could harm
our business, reputation, revenue, financial results and prospects. In addition, risks and uncertainties that are not
presently known to us or that we currently believe are immaterial could also harm our business, revenue, financial
results and prospects. If any of these risks occur, the value of our Class A common stock could decline and you may
lose all or part of your investment.
Risks Related to our Business Strategy and Growth
We are in the early stages of our monetization efforts and there is no assurance we will be able to scale our
business for future growth.
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 expanding our sales efforts to reach
advertisers in additional international markets), scaling our business with existing advertisers and expanding our
advertising product offerings. There is no assurance that this revenue model will continue to be successful or that we
will generate increasing revenue. We do not know if we can sustain the historical growth rate of our revenue. To
sustain or increase our revenue, we must obtain new advertisers, encourage existing advertisers to maintain or
increase their advertising spend on our platform, expand the number of markets where we offer advertising and
increase the breadth and functionality of our advertising offerings, including new advertising formats and
measurement tools.
In order to obtain new advertisers and further our relationship with current advertisers, we must increase the size of
our user base or the engagement of our users. There is no assurance that our user retention, growth or engagement
strategy will be successful or that we will maintain or increase the number of users on our service. Further, if we are
unable to scale or maintain our relationships with our large advertisers, our business, revenue and financial results
could be harmed.
To continue to maintain and grow our advertiser base and our revenue, we depend on our ability to effectively serve
enough advertisements that meet the objectives of our advertisers while maintaining a high quality user experience. If
we are unable to do this on our platform due to factors such as a decline in user growth or user engagement, or
changes in product features or user behavior where users engage increasingly with product features where we may
not be able to display as many advertisements, our business, revenue and financial results could be harmed.
In addition, to scale the growth of our ad platform, we will have to successfully develop and target ad products based
on Pinners’ personal taste and interests, which will require broad and diverse Pinner data. If we are unable to do this
with the data, technology and resources available to us, we may need to consider alternatives, such as partnerships,
to grow our business. If we choose not to pursue these partnerships, or if these partnerships are unsuccessful, our
business may prove less scalable, and our business, revenue and financial results could be harmed.
Our ecosystem of Pinners and advertisers depends on our ability to attract, retain and engage our user base.
If we fail to add new Pinners or retain or recover Pinners, or if Pinners engage less with us, our business,
revenue and financial results could be harmed.
We must continue to attract, grow, retain and engage our users on our platform, who we call Pinners. Our active
Pinners may not grow, and may continue to decline.
If current and potential Pinners do not perceive their experience with our service to be useful, or the content that we
serve to them to be relevant to their personal taste and interests, we may not be able to attract new Pinners, retain
existing Pinners, recover past Pinners or maintain or increase the frequency and duration of Pinners' engagement.
Pinner engagement may also fluctuate depending on factors beyond our control, such as changes to daily life
resulting from the COVID-19 pandemic. Although we saw higher engagement from Pinners during the peak of the
COVID-19 pandemic in 2020, we have experienced and may continue to experience lower levels of Pinner
engagement since then.
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We anticipate that our active user growth rate will decline over time if the size of our active user base increases or we
achieve higher market penetration rates. As a result, our financial performance will increasingly depend on our ability
to increase Pinner engagement and our monetization efforts. We also may not be able to penetrate certain
demographics in a meaningful manner to grow the number of Pinners. For example, in the United States, historically a
substantial majority of our Pinners have been women of ages 18-64. We may not be able to further increase the
number of Pinners in this demographic and may need to increase the number of Pinners in other demographics, such
as men and international users, in order to grow our users.
Our ability to serve advertisements on our platform, and therefore the value proposition for our advertisers, depends
on the size and engagement of our user base. Our growth efforts are not currently focused on increasing the number
of daily active users, and we do not anticipate that most of our users will become daily active users. Therefore, even if
we are able to increase demand for our advertising products, we may not be able to deliver those advertisements if
we cannot also increase the size and engagement of our user base, which could harm our business, revenue and
financial results.
There are many other factors that could negatively affect user growth, retention and engagement, including if:
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our competitors mimic our products or product features, causing Pinners to utilize their products instead of, or
more frequently than, our products;
we do not provide a compelling Pinner experience because of the decisions we make regarding our products
or the type and frequency of advertisements that we display;
our content is not relevant to Pinners’ personal taste and interests;
search queries by Pinners do not yield relevant results;
third parties do not permit or continue to permit their content to be displayed on our platform;
Pinners have difficulty installing, updating or otherwise accessing our service on mobile devices or web
browsers;
there are changes in the amount of time Pinners spend across all applications and platforms, including ours;
Pinners use or spend more time on other platforms that they feel are more relevant or engaging;
we are unable to attract creators to create engaging and relevant content on our platform;
technical or other problems frustrate the Pinner experience, particularly if those problems prevent us from
delivering our service in a fast and reliable manner;
users are located in countries with low smartphone penetration or with lack of cellular based data network
since our products typically require high bandwidth data capabilities;
changes in regulations or our contractual arrangements that adversely impact our access to, and use of, zero-
rating offers or other discounts or data usage for our service;
we are unable to address Pinner and advertiser concerns regarding the content, privacy and security of our
service;
we are unable to combat spam, harassment, cyberbullying, discriminatory, political or other hostile,
inappropriate, misleading, abusive or offensive content or usage on our products or services;
Pinners adopt new technologies where our products or services may be displaced in favor of other products
or services, or may not be featured or otherwise available;
third-party initiatives that may enable greater use of our service, including low-cost or discounted data plans,
are discontinued;
• merchants on Pinterest do not provide Pinners with positive shopping experiences, for example, if products
are not of the quality depicted on the platform or not readily available for purchase; or
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the other risks and uncertainties described in this Annual Report on Form 10-K.
If our existing Pinners do not continue to utilize our service or our user base does not grow or we need to educate
Pinners how to utilize new products and product features that we introduce, such as live stream and video, we may be
required to incur significantly higher marketing expenses than we currently anticipate.
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Any decrease in user growth, retention or engagement could render our service less attractive to Pinners or
advertisers, and could harm our business, revenue and financial results.
If we are not able to continue to provide content that is useful and relevant to Pinners’ personal taste and
interests or fail to remove objectionable content or block objectionable practices by advertisers or third
parties, user growth, retention or engagement could decline, which could result in the loss of advertisers and
revenue.
Our success depends on our ability to provide Pinners with content, including advertisements, that is useful and
relevant to their personal taste and interests, which in turn, depends on the content contributed by our users, creators
and advertisers and the manner in which we present that content to Pinners. Pinners engage with content that is
relevant to their country, language and gender preferences as well as their personal interests and intent. We may not
correctly or timely identify and serve content that is useful and relevant to Pinners. In addition, new content and new
or different forms of content we distribute may not have as much relevancy signal for optimal distribution of the pins as
prior content and forms of content that have been saved repeatedly on our platform which may result in lower Pinner
engagement with such content. For example, we are investing in publishing more native content and short form video
content on our platform, including the distribution of Idea Pins. Pinner engagement may decline as we learn to
distribute this native and short form video content efficiently and as Pinners learn new ways to use and navigate our
platform. As a result, we may not be able to provide adequate, useful or relevant content to our users. Content that is
not visually pleasing, is not intuitive or easy to use or is not in the desired language may not be engaging for Pinners,
especially in non-U.S. markets. If Pinners do not believe that we offer content that is useful and relevant to their
personal taste and interests, user growth, retention or engagement may decline, which could result in the loss of
advertisers and revenue.
Some of the actions that we may take to make our content more useful and relevant may reduce traffic that we drive
from our platform to the websites of third parties, which may reduce their willingness to contribute or continue
availability of their content on our service. We endeavor to keep divisive, disturbing or unsafe content off our service.
We do this by deleting or hiding certain types of content, even if this content would be permitted on other platforms,
which could result in a decrease in user growth, retention or engagement. We apply significant judgment in making
these determinations and may be unsuccessful in our efforts to remove this content in a manner that is (or is
perceived to be) consistently applied and on a timely basis or at all, which could also result in a decrease in user
growth, retention or engagement. Further, if we fail to identify and keep off our service advertisers and merchants who
offer poor quality goods or fail to deliver goods to their customers, we may lose Pinner confidence. In addition,
controversies regarding content on other social media platforms, such as the boycott of Facebook and Twitter by
some advertisers and the recent allegations of the impact of social media on the mental health of users, may impact
user engagement and advertising spending on our platform, which could adversely affect our business and revenue.
Any of these factors could result in decrease in user growth, retention or engagement.
We regularly monitor how our advertising affects Pinners’ experiences in our effort to avoid delivering too many
advertisements or irrelevant advertisements to Pinners. Therefore, we may decide to change the number of
advertisements or eliminate certain types of advertisements to maintain Pinners’ satisfaction in the service. We may
make changes to our platform based on feedback provided by Pinners or advertisers. These decisions may not
produce the short-term or long-term benefits that we expect, in which case user growth, retention and engagement,
our relationships with advertisers, and our business, revenue and financial results could be harmed.
Current and future data privacy laws and regulations, including the General Data Protection Regulation (“GDPR”) and
California Consumer Privacy Act of 2018 (the “CCPA”), the California Privacy Rights Act (the "CPRA"), or new
interpretations of existing laws and regulations, may limit our ability to collect and use data, which may impact our
ability to effectively deliver relevant content. These laws and regulations may also impact our ability to expand
advertising on our platform, as they may impede our ability to deliver targeted advertising and accurately measure our
ad performance. Additionally, even if not prohibited by data privacy laws and regulations, we may elect not to collect
certain types of data if we believe doing so would be inconsistent with our Pinners’ expectations, if the source is
unreliable or for any other reason. Similarly, the increase in media attention about online privacy and data protection
may motivate Pinners to take certain actions to protect their privacy. Pinners may elect not to allow data sharing for a
number of reasons, such as data privacy concerns. This could impact our ability to deliver relevant content aligned
with Pinners’ personal taste and interests. Additionally, the impact of these developments may disproportionately
affect our business in comparison to certain peers in the technology sector that, by virtue of the scope and breadth of
their operations or user base, have greater access to user data.
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Substantially all our revenue is generated from advertising, and a decline in user growth, retention or engagement as
a result of our inability to provide relevant and useful content to Pinners, and therefore our inability to serve the
volume of advertisements desired by our advertisers, may deter new advertisers from using our platform or cause
current advertisers to reduce their spending with us or cease doing business with us altogether, which could harm our
business, revenue and financial results.
If we are unable to compete effectively for users, our business, revenue and financial results could be
harmed.
We face significant competition to attract, retain and engage users and for their time and attention. We primarily
compete with consumer internet companies that are either tools (search, e-commerce, creator tools) or media
(newsfeeds, video, social networks).
We compete with large, established companies and companies that offer widely used products, such as Amazon,
Facebook (including Instagram), Google (including YouTube), Snap, TikTok and Twitter, which provide their users with
a variety of online products, services, content (including video), creator incentives and offerings, and advertising
offerings, including web search engines, social networks and other means of discovering, using or acquiring goods
and services. Many of these competitors have longer operating histories, significantly greater financial, technical,
research, marketing and other resources and larger user bases than we do. Many of these competitors also have
access to larger volumes of data and platforms that are used on a more frequent basis than ours, which may enable
them to better understand their user base and develop and deliver more relevant content.
Our competitors have previously and may continue to develop technology, products, services or interfaces that are
similar to our existing and future products quickly and at scale, or that achieve greater market acceptance than our
products, including by Pinners, advertisers, creators and other third parties. Some of our competitors also operate
existing products that have significant market power in certain market sectors and could use that market power to
advance their own products or services that compete with ours. For example, Amazon, Google, Snap, Facebook and
Instagram have introduced shopping platforms, including similar offerings such as camera search functionality. In the
area of live events, Amazon, Instagram, Facebook, YouTube, TikTok, and Snap are all expanding their video-based
and live shopping experiences. In the area of content, TikTok has launched a series of features and integrations that
add, for example, recipes to cooking videos or step-by-step instructions for DIY or How To videos. These competitors
may engage in more extensive research and development efforts and undertake more extensive marketing
campaigns, which may allow them to build larger, more engaged user bases than we have. Also, some of our existing
or potential competitors operate products or services from which we currently derive substantial value, such as search
engines and email, and those competitors could reduce or eliminate the value and information we receive.
We also face competition from smaller companies in one or more high-value verticals, including Allrecipes, Houzz and
Tastemade, that offer users engaging content and commerce opportunities through similar technology, products,
features or services to ours. In addition, emerging startups may be able to innovate and provide technology, products,
services or features similar to ours or before us.
Our competitors may be able to respond more quickly than we can to new or emerging technologies and changes in
user preferences. Barriers to entry in our industry are low, and our intellectual property rights may not be sufficient to
prevent competitors from launching comparable products or services.
In emerging international markets, where mobile devices often lack large storage capabilities, we may also compete
with other applications for the limited space available on a user’s mobile device.
We believe that our ability to compete for users depends upon many factors both within and beyond our control,
including:
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the usefulness, novelty, performance and reliability of our service compared to those of our competitors;
the timing and market acceptance of our products, including the developments and enhancements to those
products, offered by us or our competitors;
our brand strength relative to our competitors; and
the other risks and uncertainties described in this Annual Report on Form 10-K.
If we are unable to compete effectively for users, our business, revenue and financial results could be harmed.
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We may make decisions consistent with our mission and values that may reduce our short- or medium-term
operating results.
Our mission—to bring everyone the inspiration to create a life they love—and company values are integral to
everything we do. We frequently make decisions regarding our business and service in accordance with our mission
and values that may reduce our short- or medium-term operating results if we believe those decisions will improve the
experiences of Pinners, advertisers, creators, employees or our community, and therefore benefit our business. For
example, we may choose to remove content that we have determined does not create an inspiring experience for
Pinners or revise our policies in ways that decrease Pinner engagement. These decisions may not be consistent with
the expectations of investors and any longer-term benefits may not materialize within the time frame we expect or at
all, any of which could harm our business, revenue and financial results.
If we are unable to attract and retain creators to create content on our platform, we may not be able to attract,
retain or grow our users.
We are focused on attracting and retaining creators to create useful and relevant content on our platform. We may not
be able to effectively compete for creators who create content on our platform and on social media and other
platforms or may get creators who create content that is not relevant, useful or inspiring to our users. If creators prefer
to create content on competing platforms over ours, or prefer the incentives or financial rewards offered by competing
platforms over ours, we may not develop or may lose potentially engaging and relevant content. If we are unable to
attract and retain creators, we may not have sufficient useful and relevant content to distribute on our platform. Even if
we attract and retain creators who create engaging content, we may not be able to distribute that content effectively
due to lower relevancy and search signals. Further, we plan to make increased investments in attracting creators,
including increasing workforce resources, which may reduce our short or medium term financial and operating results.
If we are unable to compete effectively for advertisers, our business, revenue and financial results could be
harmed.
We face significant competition for advertising revenue across a variety of formats. To compete effectively, we must
enable our advertisers to easily create content and buy, forecast, optimize and measure the performance of
advertising on our platform. In order to grow our revenue and improve our operating results, we must increase our
share of advertising spend relative to our competitors, many of which are larger companies that offer more traditional
and widely accepted advertising products, as well as more robust tools to measure the effectiveness of advertising
campaigns.
Some of our larger competitors have substantially broader product or service offerings and leverage their relationships
based on other products or services to gain additional share of advertising spend. They have large distributed sales
forces and an increasing amount of control over mobile distribution channels. These competitors’ economies of scale
allow them to have access to larger volumes of data and platforms that are used on a more frequent basis than ours,
which may enable them to better understand their user base and develop and deliver more targeted advertising. They
may not need to rely on third-party data, including data provided by advertisers, in order to effectively target the
campaigns of advertisers, which could make their advertising products more attractive to advertisers than ours as
third-party data becomes less available to us, whether because of regulatory changes, privacy concerns or other
reasons. If we are unable to provide our advertisers with the ability to effectively target their advertising campaigns, or
if our advertisers do not believe that our value proposition is as compelling as those of our competitors, we may not be
able to attract new advertisers or retain existing ones, and our business, revenue and financial results could be
harmed.
We believe that our ability to compete for advertisers depends upon many factors both within and beyond our control,
including:
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sales, marketing, customer service and support efforts;
first- and third-party data available to us relative to our competitors;
ease of use, performance, price and reliability of solutions developed either by us or our competitors;
the attractiveness and volume of our product and service offerings (including pricing and measurement tools)
compared to those of our competitors;
the strength of our advertiser relationships and offerings compared to those of our competitors;
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the ease with which our advertising products fit into existing advertiser budgets compared to those of our
competitors;
positions or actions taken by us, Pinners, advertisers or other third parties that may impact our brand and
reputation or the desirability of advertising on online platforms in general; and
the other risks and uncertainties described in this Annual Report on Form 10-K.
If we are unable to compete effectively for advertisers, our business, revenue and financial results could be harmed.
We may not be able to develop effective products and tools for advertisers.
Growth in our advertising revenue depends on our ability to continue to develop and offer effective products and tools
for advertisers. New ad formats that take up more space on our platform may result in fewer impressions, which could
adversely affect our revenue. Alternatively, new ad formats, such as video ads, may be more engaging and users may
spend less time browsing or searching on our platform, which could adversely affect our revenue. As the advertising
market generates and develops new concepts and technology, we may incur additional costs to implement more
effective products and tools. We may introduce changes to our existing ad products or develop and introduce new and
unproven ad products with which we have little or no prior experience. Each of these could result in unintended
outcomes or results that are not well received by advertisers. In addition, if new or enhanced ad products fail to attract
or retain advertisers, we may fail to generate sufficient revenue. Further, continuing to develop and improve these
products and tools may require significant time and resources and additional investment. If we cannot continue to
develop and improve our advertising products and tools in a timely fashion, or if our advertising products and tools are
not well received by advertisers, our advertising revenue could be adversely affected.
We may not succeed in further expanding and monetizing our platform internationally and may be subject to
increased international business and economic risks.
We plan to continue expanding our business operations outside the United States and offering content and advertising
to Pinners and advertisers in other languages and countries. We plan to continue to enter new international markets
where we have limited or no experience in deploying our service or selling advertisements. In order to expand
successfully, we need to offer content and products that are customized and relevant to local Pinners and advertisers,
which requires significant investment of time and resources. We may launch our advertising platform in countries
where we do not have sales staffing in place, where market perception of our service and ad platform may be low or
where our audience size in a given market may be low relative to advertiser expectations, all or any of which could
limit our ability to monetize those countries. As we expand into new international markets, we may not yet understand
the full scope of Pinners’ personal taste and interests, demographics and culture in those markets, as well as
advertiser expectations, target audiences and return on advertising spend. This may cause us to expand into markets
before we are able to offer a service and advertising platform that has been sufficiently localized for those markets or
where those markets lack the necessary demand and infrastructure for long-term adoption of our service. For
example, we may experience challenges adapting our content and search tools to be localized for new markets, or
establishing sufficient high quality advertising inventory to deliver relevant localized experiences in new markets. This
may cause us to limit our expansion or decrease our operations in international markets, including discontinuing
advertising in those markets or not monetizing those markets at all, which could harm our reputation and business,
revenue and financial results. If the advertising market does not scale sufficiently or we are unsuccessful in deploying
or managing our operations in these markets, our business, revenue and financial results could be harmed.
We are subject to a variety of risks inherent in doing business internationally, and our exposure to these risks will
increase as we continue to expand our operations, user base and advertiser base globally. These risks include:
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political, social and economic instability;
selective or inconsistent government regulatory action or enforcement;
fluctuations in currency exchange rates and restrictions on currency conversions;
higher levels of credit risk and payment fraud;
enhanced difficulties of integrating any foreign acquisitions;
reduced protection for intellectual property rights in some countries;
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difficulties in staffing and managing global operations and the increased travel, infrastructure and legal
compliance costs associated with multiple international locations and subsidiaries;
different regulations and practices with respect to employee/employer relationships, existence of workers’
councils and labor unions, and other challenges caused by distance, language and cultural differences,
making it harder to do business in certain international jurisdictions;
increasing labor costs due to high wage inflation in certain international jurisdictions;
compliance with statutory requirements relating to our equity;
regulations that might add difficulties in repatriating cash earned outside the United States and otherwise
prevent us from freely moving cash;
import and export controls and restrictions and changes in trade regulations, including sanctions;
compliance with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws in other
jurisdictions;
compliance with laws governing supply chains and related business operations;
compliance with GDPR and similar data privacy and data protection laws;
compliance with laws that might restrict content or advertising, require us to provide user information,
including confidential information, to local authorities or add significant requirements that make it difficult to
operate in that jurisdiction;
• macroeconomic conditions, such as the COVID-19 pandemic which had an impact on the pace of our global
expansion;
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compliance with multiple tax jurisdictions and management of tax impact of global operations; and
the other risks and uncertainties described in this Annual Report on Form 10-K.
If we are unable to expand internationally and manage the complexity of global operations successfully, our business,
revenue and financial results could be harmed.
If we do not develop successful new products or improve existing ones, our business may suffer. We may
also invest in new products that fail to attract or retain Pinners or generate revenue.
Our ability to grow, retain and engage our user base and therefore increase our revenue depends on our ability to
successfully enhance our existing products and create new products, both independently and in conjunction with
platform developers or other third parties, and to do so quickly. We may introduce significant changes to our existing
products or develop and introduce new and unproven products with which we have little or no prior development or
operating experience. Our focus on innovation and experimentation could result in unintended outcomes or decisions
that are poorly received by Pinners. If new or enhanced products fail to engage our Pinners, we may fail to generate
sufficient revenue, operating margin or other value to justify our investments, any of which could harm our business,
revenue and financial results. We also may develop new products that increase Pinner engagement and costs that
are not intended to increase revenue.
Further, our products often require Pinners to learn new behaviors that may not always be intuitive to them. To the
extent that new Pinners are less willing to invest the time to learn to use our products, or if we are unable to make our
products easier to learn to use, our user growth, retention or engagement could be affected, and our business,
revenue and financial results could be harmed.
We cannot assure you that we will effectively manage the growth of our business.
Although we have experienced rapid growth and demand for our service in our initial years, we cannot assure you that
our business will continue to grow at the same rate or at all. The growth and expansion of our business and product
offerings and the increase in full-time employees place significant challenges on our management, operational and
financial resources, including managing multiple relationships with Pinners, advertisers, technology licensors and
other third parties. If we continue to grow our operations or the number of our third-party relationships, our technology
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systems, procedures or internal controls may not be adequate. Further, we may not be able to continue to develop or
maintain a long term growth strategy or execute the strategy effectively, which may harm our business, revenue and
financial results.
As our organization continues to grow in number of employees and offices and we are required to implement more
complex organizational management structures, we also find it increasingly difficult to preserve our workplace culture,
including our ability to quickly develop and launch new and innovative products and adequately oversee employees
and business functions. This is particularly true in recent times where a majority of our employees have been working
remotely due to the COVID-19 pandemic. Our inability to effectively manage the growth of our organization may harm
our business, revenue and financial results.
We may acquire other businesses, talent or technology, which could require significant management
attention, disrupt our business, dilute stockholder value and harm our business, revenue and financial
results.
As part of our business strategy, we have made and intend to make acquisitions to add specialized employees and
complementary companies, products or technologies. Our previous and future acquisitions may not achieve our goals,
and we may not realize benefits from acquisitions we make in the future. Any acquisitions, including the integration
process will require significant time and resources, and we may not be able to manage the process successfully. If we
fail to successfully integrate acquisitions, or the personnel or technologies associated with those acquisitions, the
business, revenue and financial results of the combined company could be harmed. Our acquisition strategy may
change over time and future acquisitions we complete could be viewed negatively by Pinners, advertisers, investors
or other parties with whom we do business. We may not successfully evaluate or utilize the acquired technology and
accurately forecast the financial impact of an acquisition, including accounting charges. We may also incur
unanticipated liabilities that we assume as a result of acquiring companies. We may have to pay cash, incur debt or
issue equity securities to pay for any such acquisition, each of which could affect our financial condition or the value of
our securities. We would expect to finance any future acquisitions through a combination of additional issuances of
equity, corporate indebtedness, asset-backed acquisition financing or cash from operations. The sale of equity to
finance any such acquisitions could result in dilution to our stockholders. The incurrence of indebtedness would result
in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to
manage our operations. In the future, we may not be able to find other suitable acquisition candidates, and we may
not be able to complete acquisitions on favorable terms, if at all. Our acquisition strategy could require significant
management attention, disrupt our business and harm our business, revenue and financial results.
Risks relating to our Business Operations
The global COVID-19 pandemic has impacted and is expected to continue to impact our business and results
of operations.
The global COVID-19 pandemic and the various attempts to contain it have created significant volatility, uncertainty
and economic disruption. It has adversely affected the broader economies, financial markets and overall demand for
advertising.
As a result of the COVID-19 pandemic, we temporarily closed all our offices (including our corporate headquarters)
globally and implemented certain travel restrictions, both of which have disrupted and could continue to disrupt how
we operate our business, including requiring us to manage a significant majority of our workforce remotely. Although
we had begun the process of reopening certain of our offices in a phased manner, the continuing uncertainty around
COVID-19 and its variants is causing us to re-examine and adjust our approach to office reopening. Our efforts to re-
open our offices safely may not be successful, could expose our employees to health risks, and us to associated
liability, and could involve additional financial burdens.
Moreover, as a result of the COVID-19 pandemic, the ability and willingness of advertisers to spend on our services
has fluctuated. Certain advertisers are impacted by pandemic driven factors, such as supply chain issues, rising
commodity prices and inventory and labor shortages. This affects the ability and willingness of such impacted
advertisers to spend on our platform. We cannot predict how evolving events related to the COVID-19 pandemic will
continue to affect advertiser behavior in the future. The pandemic has, and could in the future, adversely affect our
business, revenue growth and user retention and acquisition rates, financial performance and stock price.
Further, during the peak of the COVID-19 pandemic and the related shelter-in-place order in 2020, we saw an
increase in user growth and Pinner engagement. As the pandemic began to subside, we have experienced challenges
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such as decline in MAUs, user engagement or change in user behavior in ways that are difficult to anticipate, forecast
or measure, resulting in reduced or different usage of our platform. We may continue to face these challenges as the
pandemic evolves. However, given the uncertainties relating to the COVID-19 pandemic and its new variants, we
may not be able to accurately measure and forecast our key metrics, including MAUs. As a result, engagement as
well as metrics such as revenues, operating margins and other financial and operating data, may not be indicative of
results for future periods.
We are currently unable to accurately predict the full impact that the COVID-19 pandemic will have on our financial
results due to uncertainties regarding the duration and rate of the ongoing spread of the pandemic, including variants
of the COVID-19 virus, including any resurgences, the extent and effectiveness of containment actions and other
public health measures, the distribution and public acceptance of vaccines and treatments, and the impact of these
and other factors on our employees, users, advertisers, partners and vendors. The pandemic as well as any
subsequent recovery period, may also have the effect of heightening many of the other risks described in this “Risk
Factor” section.
Our business depends on a strong brand and reputation, and if we are unable to maintain and enhance our
brand and reputation, our ability to expand our user and advertiser base will be impaired and our business,
revenue and financial results could be harmed.
We believe that our brand, identity and reputation has significantly contributed to the success of our business. We
also believe that maintaining and enhancing the “Pinterest” brand and reputation is critical to retaining and growing
our user, creator and advertiser base. Maintaining and enhancing our brand and reputation depends largely on our
continued ability to provide high-quality, relevant, reliable, trustworthy and innovative products, which may require
substantial investment and may not be successful. We may need to introduce new products or updates to existing
products that require Pinners to agree to new terms of service that Pinners do not like, which may negatively affect
our brand and reputation. Additionally, advertisements or actions of our advertisers may affect our brand and
reputation if Pinners do not think the advertisements help them accomplish their objectives, or view the
advertisements as intrusive, annoying or misleading or have poor experiences with our advertisers. In addition, our
brand, identity and reputation may be adversely affected by perceptions of social media platforms in general, including
perceptions resulting from factors unrelated to the company’s actions or the content or actions of Pinners, such as the
boycott of Facebook and Twitter by some advertisers or allegations of the impact of social media on the mental health
of users.
Our brand and reputation may also be negatively affected by the content or actions of Pinners that are deemed to be
hostile or inappropriate to other Pinners, by the actions of Pinners acting under false or inauthentic identities, by the
use of our products or services to disseminate information that is deemed to be misleading, or by the use of our
service for illicit, illegal or objectionable ends. We also may fail to respond expeditiously to the sharing of illegal, illicit
or objectionable content on our service or objectionable practices by advertisers, or to otherwise address Pinner or
advertiser concerns, which could erode confidence in our brand and damage our reputation. We expect that our ability
to identify and respond to this content in a consistently applied manner and on a timely basis or at all may decrease
as the number of Pinners grows, as the amount of content on the platform increases or as we expand our product and
service offerings, such as video and live streaming content. Any governmental or regulatory inquiry, investigation or
action, including based on the appearance of illegal, illicit or objectionable content on our platform, our business
practices, or failure to comply with laws and regulations, could damage our brand and reputation, regardless of the
outcome.
We have experienced, and expect to continue to experience, media, legislative, governmental, regulatory, investor
and other third-party scrutiny of our decisions. Any scrutiny, inquiry, investigation or action, including regarding our
data privacy, copyright, content, employment or other practices, workplace culture, charitable giving, product changes,
product quality, litigation or regulatory action or regarding the actions of our employees, Pinners or advertisers or other
issues, may harm our brand and reputation. In addition, scrutiny of other companies in our industry, including their
impact on user “screen time” or their content policies or data privacy practices, could also have a negative impact on
our brand and reputation. These concerns, whether actual or unfounded, may also deter Pinners, creators or
advertisers from using our service.
Adverse publicity, whether or not accurate, relating to events or activities attributed to us, our employees, third-party
vendors, Pinners, creators or our advertisers, or to social media platforms in general, may tarnish our reputation and
reduce the value of our brand. If we fail to promote and maintain the “Pinterest” brand or preserve our reputation, or if
we incur excessive expenses in this effort, our business, revenue and financial results could be harmed.
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If our security is compromised, or Pinners or advertisers believe our security has been compromised, we
could lose the trust of Pinners, creators and advertisers who may use our service less or may stop using our
service altogether, which could harm our business, revenue and financial results.
Our efforts to protect the information that Pinners, creators and advertisers have shared with us may be unsuccessful
due to the actions of third parties, software bugs or other technical malfunctions, cyberattacks, employee error or
malfeasance, hacking, viruses or other factors. In addition, third parties may attempt to induce our employees,
Pinners, creators, advertisers or vendors to disclose information to gain access to our data, advertisers' data or
Pinners’ data. Further, because the login credentials or passwords employed by Pinners to access our service may be
similar to or the same as the ones that they use in connection with other platforms or websites, a breach in the
security of those platforms or websites can allow third parties to gain unauthorized access to Pinners’ accounts on our
service. If any of the events described above occur, our information or Pinners’, creators' or advertisers' information
could be accessed or disclosed improperly. If a third-party gains unauthorized access to our service, they may, among
other things, post malicious spam and other content on our platform using a Pinner’s, creator's or advertiser’s
account, that could negatively affect our products and our business.
Some third parties, including advertisers and vendors, may store information that we share with them on their
networks. If these third parties fail to implement adequate data-security practices or fail to comply with our terms and
policies, Pinners’ data may be improperly accessed, used or disclosed. Even if these third parties take all the
necessary precautions, their networks may still suffer a breach, which could compromise Pinners' data.
Any incidents where Pinners’, creators' advertisers' or our information is accessed without authorization or is
improperly used, or incidents that violate our privacy policy, terms of service or other policies, or the perception that an
incident has occurred, could damage our brand and reputation, adversely impact our competitive position and result in
significant costs. We may need to notify government authorities or affected Pinners regarding security incidents, and
government authorities or affected Pinners, creators or advertisers could initiate legal or regulatory action against us
over those incidents, which could cause us to incur significant expense and liability or result in orders or consent
decrees forcing us to modify our business practices. Maintaining the trust of Pinners, creators and advertisers is
important to sustain user growth, retention and engagement, and we may incur significant costs in an effort to detect
and prevent any security incidents. Concerns over our information security or data privacy practices, whether actual or
unfounded, could subject us to negative publicity and damage our brand and reputation and deter Pinners, creators
and advertisers from using our service. Any of these occurrences could harm our business, revenue and financial
results.
We generate substantially all of our revenue from advertising. The failure to attract new advertisers, the loss
of advertisers or a reduction in how much they spend could harm our business, revenue and financial results.
Substantially all of our revenue is generated from third-party advertising, a trend that we expect to continue. Most
advertisers do not have long-term advertising commitments with us. Many of our advertisers only recently started
working with us and spend a relatively small portion of their overall advertising budget with us. In order to increase the
number of advertisers and increase the portion of the advertising budget that our existing advertisers spend with us,
we must invest in new tools and expand our sales force, and there can be no assurance that those efforts will be
successful. The insights on user behavior we provide to advertisers may not yield effective results for the advertisers
and may reduce or stop their spend on our platform. In addition, advertisers may view some of our products or our
platform as experimental and may devote only a small portion of their advertising spend to our platform unless we
improve existing and develop new measurement tools that better demonstrate the effectiveness of our platform. In
addition, many advertisers do not have advertising creative content in a format that would be successful on our
platform and may be unable or unwilling to devote the technical or financial resources required to develop content for
our platform. While we continue to develop and deploy tools to allow advertisers to create content for our platform, we
may be unable to develop tools that effectively and efficiently meet the needs of advertisers. Advertisers will not do, or
continue to do, business with us if they do not believe that our advertisements are effective in meeting their campaign
goals, if we cannot measure the effectiveness of our advertising products or if they do not believe that their investment
in advertising with us will generate a competitive return relative to other alternatives.
A substantial portion of our revenue is derived from a small number of advertisers and is currently concentrated in
certain verticals, particularly CPG and retail. We either contract directly with advertisers or with advertising agencies
on behalf of advertisers. Many of these advertising agencies are owned by large media corporations that exercise
varying degrees of control over the agencies. Our business, revenue and financial results could be harmed by the loss
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of, or a deterioration in our relationship with, any of our largest advertisers or with any advertising agencies or the
large media corporations that control them.
Our advertising revenue could be harmed by many other factors, including:
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changes in the price of advertisements;
our inability to create new products that sustain or increase the value of our advertisements;
our inability to meet advertiser demand on our platform if we cannot increase the size and engagement of our
user base;
our inability to find the right balance between brand and performance advertising and provide the right
products and platform to support the pricing and demand needed for each of the advertisers;
changes in Pinner demographics that make us less attractive to advertisers;
our inability to make our ads more relevant and effective;
any decision to serve contextually relevant advertisements when the price of relevant advertisements may be
lower than other advertisements that we could show Pinners that are less relevant;
the availability, accuracy and utility of our analytics and measurement solutions that demonstrate the value of
our advertisements, or our ability to further improve such tools;
changes to our data privacy practices (including as a result of changes to laws or regulations or third-party
policies) that affect the type or manner of advertising that we are able to provide;
our inability to collect and share data which new or existing advertisers find useful;
competitive developments or advertiser perception of the value of our products;
product changes or advertising inventory management decisions we make that change the type, size or
frequency of advertisements on our platform;
Pinners that upload content or take other actions that are deemed to be hostile, inappropriate, illicit,
objectionable, illegal or otherwise not consistent with our advertisers’ brands;
the impact of invalid clicks or click fraud on our advertisements;
the failure of our advertising auction mechanism to target and price ads effectively;
difficulty and frustration from advertisers who may need to reformat or change their advertisements to comply
with our guidelines or experience challenges uploading and conforming their advertisements with our system
requirements;
the macroeconomic conditions and the status of the advertising industry, such as the global outbreak of the
COVID-19 pandemic, its uncertain duration and recovery, which could cause businesses to spend less on
advertising and/or direct their advertising spend to larger companies that offer more traditional and widely
accepted advertising products; and
the other risks and uncertainties described in this Annual Report on Form 10-K.
These and other factors could reduce the amount that advertisers spend on our platform, or cause advertisers to stop
advertising with us altogether. Any of these events could harm our business, revenue and financial results.
Our ability to attract and retain advertisers depends on our ability to collect and use data and develop tools to
enable us to effectively deliver and accurately measure advertisements on our platform.
Most advertisers rely on tools that measure the effectiveness of their ad campaigns in order to allocate their
advertising spend among various formats and platforms. If we are unable to measure the effectiveness of advertising
on our platform or we are unable to convince advertisers that our platform should be part of a larger advertising
budget, our ability to increase the demand and pricing of our advertising products and maintain or scale our revenue
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may be limited. Our tools may be less developed than those of other platforms with which we compete for advertising
spend. Therefore, our ability to develop and offer tools that accurately measure the effectiveness of a campaign on
our platform is critical to our ability to attract new advertisers and retain, and increase spend from, our existing
advertisers.
We are continually developing and improving these tools and such efforts have and are likely to continue to require
significant time and resources and additional investment, and in some cases we have relied on and may in the future
rely on third parties to provide data and technology needed to provide certain measurement data to our advertisers. If
we cannot continue to develop and improve our advertising tools in a timely fashion, those tools are not reliable, or the
measurement results are inconsistent with advertiser goals, our advertising revenue could be adversely affected.
Many existing advertiser tools that measure the effectiveness of advertising do not account for the role of advertising
early in a Pinner's decision-making process, which is when many Pinners come to our service. Instead, these tools
measure the last ad or content that was exposed to the Pinner that gets credit for influencing any Pinner’s purchase or
action. As a result, we may not be able to demonstrate and measure for our advertisers the value of engaging with a
Pinner during the early intent phase.
In addition, web and mobile browser developers, such as Apple, Microsoft or Google, have implemented and may
continue to implement changes, including requiring additional user permissions, in their browser or device operating
system that impair our ability to measure and improve the effectiveness of advertising on our platform. Such changes
include, limiting the use of first-party and third-party cookies and related tracking technologies, such as mobile
advertising identifiers, and other changes that limit our ability to collect information that allows us to attribute user
actions on advertisers’ websites to the effectiveness of advertising campaigns run on our platform. For example, Apple
launched its Intelligent Tracking Prevention (“ITP”) feature in its Safari browser. ITP blocks some or all third-party
cookies by default on mobile and desktop and ITP has become increasingly restrictive over time. Apple's related
Privacy-Preserving Ad Click attribution (PPAC), intended to preserve some of the functionality lost with ITP, would limit
cross-site and cross-device attribution, prevent measurement outside a narrowly-defined attribution window, and
prevent ad re-targeting and optimization. Similarly, Google announced that it plans to stop supporting third-party
cookies in its Google Chrome browser. Further, Apple implemented certain changes, including introducing an
AppTrackingTransparency framework that limits the ability of mobile applications to request an iOS device’s
advertising identifier and affects our ability to track user actions off our platform and connect their interactions with on-
platform advertising.
In addition, third-parties, such as Apple, Microsoft or Google, have implemented and may continue to implement
changes and restrictions in browser or device functionality including by limiting the use of cookies, or that limit our
ability to communicate with or understand the identity of our Pinners.
All these restrictions described above make it more difficult for us to provide the most relevant ads to our Pinners,
measure the effectiveness of, and to re-target and optimize, advertising on our platform. This may result in advertisers
spending less or not at all, on our platform and prefer larger platforms like Facebook and Google that have more
capabilities to help advertisers measure their conversions.
Developers may release additional technology that further inhibits our ability to collect data that allows us to measure
the effectiveness of advertising on our platform. Any other restriction, whether by law, regulation, policy (including
third-party policies) or otherwise, on our ability to collect and share data which our advertisers find useful, our ability to
use or benefit from tracking and measurement technologies, including cookies, or that further reduce our ability to
measure the effectiveness of advertising on our platform would impede our ability to attract, grow and retain
advertisers. Advertisers and other third parties who provide data that helps us deliver personalized, relevant
advertising may restrict or stop sharing this data. If they stop sharing this data with us, it may not be possible for us to
collect this data within the product or from another source.
We rely heavily on our ability to collect and share data and metrics for our advertisers to help new and existing
advertisers understand the performance of advertising campaigns. If advertisers do not perceive our metrics to be
accurate representations of our user base and user engagement, or if we discover inaccuracies in our metrics, they
may be less willing to allocate their budgets or resources to our platform, which could harm our business, revenue and
financial results.
Pinner metrics and other estimates are subject to inherent challenges in measurement, and real or perceived
inaccuracies in those metrics could harm our business, revenue and financial results.
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We regularly review metrics, including the number of our active users and other measures to evaluate growth trends,
measure our performance and make strategic decisions. These metrics are calculated using internal company data
and have not been validated by an independent third-party. While these numbers are based on what we currently
believe to be reasonable estimates for the applicable period of measurement, there are inherent challenges in
measuring how our products are used across large populations globally. Our metrics calculations may be inaccurate,
and we may not be able to identify those inaccuracies. In the past, we have relied on other metrics that measure
different activities, such as saving a Pin, clicking, searching and other activities, as indicators of user growth and
engagement. We have in the past implemented, and may from time to time in the future implement, new
methodologies for calculating these metrics which may result in the metrics from prior periods changing, decreasing or
not being comparable to prior periods. For example, in the second quarter of 2018, we implemented our current
methodology for tracking active users. We have restated our active user data for periods from the fourth quarter of
2016 to the first quarter of 2018 based on the information that was available to us under the prior methodology in a
way that we believe is comparable to the current methodology. However, we were not able to restate active users for
periods prior to the fourth quarter of 2016 based on the data available to us from those periods. As a result, active
user information for the first, second and third quarters of 2016 are based on the prior methodology, although we
believe the differences are not material. Our prior methodology for measuring active users relied on different signals
depending on the platform where the user activity was measured—iOS, Android, web and mobile web—and inferred
user activity in a way that required removal of certain data that would not indicate active use, such as background
system requests. Our metrics may also differ from estimates published by third parties or from similarly titled metrics
of our competitors due to differences in methodology or data used.
Our MAU metrics may also be impacted by our information quality efforts, which are our overall efforts to reduce
malicious activity on our platform, including false, spam and malicious automation accounts in existence on our
service. We regularly deactivate false, spam and malicious automation accounts that violate our terms of service, and
exclude these users from the calculation of our MAU metrics; however, we will not succeed in identifying and
removing all false, spam and malicious accounts from our service. We are continually seeking to improve our ability to
estimate the total number of false, spam or malicious accounts and we intend to continue to make such
improvements. In addition, users are not prohibited from having more than one account on our service, and we treat
multiple accounts held by a single person as multiple users for purposes of calculating our active users.
In addition, some of our Pinner demographic data may be incomplete or inaccurate. For example, because Pinners
self-report their date of birth, our age-demographic data may differ from Pinners’ actual ages, or be unavailable. We
receive age-demographic data for a portion of those Pinners from other third-party accounts that Pinners chose to
authenticate with on our service, such as Facebook and Google, but there can be no assurance that those platforms
will continue to give us permission to access that data or that the data we receive from those third parties is accurate.
In addition, our data regarding the geographic location of Pinners and revenue by user geography is estimated based
on a number of factors, which may not always accurately reflect the actual location and may be different depending on
the metric we are calculating. If our metrics provide us with incorrect or incomplete information about Pinners and their
behavior, we may make inaccurate conclusions about our business.
Our business depends on our ability to maintain and scale our technology infrastructure, including speed
and availability of our service.
Our reputation and ability to attract, retain and serve Pinners, creators and advertisers is dependent upon the reliable
performance of our service and our underlying technology infrastructure and content delivery processes. From time to
time, we are subject to interruptions in or disruptions of our systems. If our platform is unavailable when Pinners,
creators or advertisers attempt to access it, if it does not load as quickly as they expect or if their content is not saved,
Pinners may not return to our platform as often in the future, or at all.
Our advertisers must be able to easily buy, forecast, optimize and measure the performance of ads on a responsive
and stable platform. Advertisers will not continue to do business with us if our technology infrastructure is not reliable.
Our systems may not be adequately designed with the necessary reliability and redundancy to avoid performance
delays or outages that could harm our business. Our systems may not be adequately designed to avoid performance
delays or outages. For example, our engineering teams' broad access to our systems is designed for speed and
release velocity, which increases the risk of disruptive intentional and unintentional (and potentially premature)
updates and changes being made directly to our live platforms and services. As our user, creator and advertiser base
and the volume and types of information shared on our service continue to grow, we will need an increasing amount of
technology infrastructure, including network capacity and computing power, to continue to satisfy the needs of
Pinners, creators and advertisers, which could increase our costs. It is possible that we may fail to effectively scale
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and grow our technology infrastructure to accommodate these increased demands, which could harm our business,
revenue and financial results. Further, in the event of a systems failure, employee error, failure or interruption of
services by AWS, malicious intent by employees or third parties, we may lose all or substantial amounts of data and
we may not be able to recover such data quickly or at all. Such loss of data could adversely affect our business and
financial results.
In addition, our systems and operations are vulnerable to damage, delays or interruptions from fire, flood, power loss,
telecommunications failure, spikes in usage volume, pandemics such as the ongoing COVID-19 pandemic, terrorist
attacks, acts of war, earthquakes, the effects of climate change and other events beyond our control. We are
particularly vulnerable to these types of events because our cloud computing infrastructure is currently located in one
geographic region. In addition, the substantial majority of our employees are located in California, which has
historically experienced, and may continue to experience, climate-related events including drought and water scarcity,
warmer temperatures, wildfires and air quality impacts and power shut-offs. If there is a catastrophic failure involving
our systems or major disruptive event affecting our headquarters or the San Francisco area in general, we may be
unable to operate our service. Although we maintain crisis management and disaster response plans, such events
could make it difficult or impossible for us to deliver our services and could cause us to incur substantial expense.
Climate-related events, including the increasing frequency of extreme weather events and their impact, have the
potential to disrupt our business and/or the business of our third-party suppliers and partners.
A substantial portion of our technology infrastructure is provided by third parties. Any disruption or failure in the
services we receive from these providers could harm our ability to handle existing or increased traffic or cause our
platform to become unavailable, which could harm our business. We exercise little control over these providers and
have limited line of sight into their governance, and any financial or other difficulties these providers face may harm
our business.
The occurrence of any of the foregoing risks could result in damage to our systems and hardware or could cause
them to fail completely, and our insurance may not cover such risks or may be insufficient to compensate us for losses
that may occur. These events may result in distraction of management, loss of revenue and costs from litigation and
enforcement. In addition, they could also result in significant expense to repair or replace damaged facilities and
remedy resultant data loss or corruption. A prolonged interruption in the availability or reduction in the speed or other
functionality of our products could materially harm our reputation and business.
The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified
personnel in the future, could harm our business, revenue and financial results.
We currently depend on the continued services and performance of our key personnel, including Benjamin
Silbermann and others. Mr. Silbermann’s employment, and the employment of our other key personnel, is at will,
which means they may resign or be terminated for any reason at any time. In addition, much of our key technology
and systems are custom-made for our business by our personnel. The loss of key personnel, including key members
of management as well as our key engineering, design, marketing, sales and product development personnel, could
disrupt our operations and harm our business.
In addition, it is important to our business to attract and retain highly talented personnel, particularly engineers with
expertise in computer vision, artificial intelligence and machine learning. We have found and may continue to find our
recruiting and retention efforts more challenging because the marketplace for talent is highly competitive. The
incentives provided by our stock option grants, restricted stock grants and restricted stock unit grants, or by other
compensation and benefits arrangements, may not be effective to attract and retain employees, especially as a result
of continued fluctuations in our stock price. We may also be required to enhance wages, benefits and non-equity
incentives. If we are unable to meet employees and potential employees' expectations, we may experience difficulties
attracting and retaining personnel. Following an independent review of our workplace culture, a Special Committee of
our Board has made a number of recommendations, which we are working to implement. Our ongoing efforts to
address workplace culture (including to meet the goals we set in our Inclusion and Diversity Report that we publish
annually), implement our Special Committee's recommendations and resolve certain related allegations or claims
have resulted in, and will continue to result in, increased costs, as well as consuming management's time and
attention. Further, if our efforts are unsuccessful, we may not be able to attract and retain talent, we may be subject to
investigations, litigation and other proceedings and our brand and reputation and stock price may be harmed.
Additionally, although we had begun re-opening some of our offices, we have temporarily closed all our offices
worldwide in light of the new COVID-19 variants, and there is still uncertainty related to the timing and manner of our
workforce returning to the office. Our future work strategy and our continued efforts related to employee onboarding,
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training and development and retention may not be successful. Further, our future work strategy is continuing to
evolve and may not meet the needs of our existing and potential future employees and they may prefer work models
offered by other companies. If we do not succeed in attracting and retaining highly qualified personnel or the financial
resources required to do so increase, we may not be able to meet our business objectives, and our business, revenue
and financial results could be harmed.
Risks arising from our reliance on third parties
We depend in part on online application stores and internet search engines to direct traffic and refer new
Pinners to our service. When these online application stores or search engines’ methodologies and policies
are modified or enforced in ways we do not anticipate, or when our search results page rankings decline for
other reasons, traffic to our service or user growth, retention and engagement has declined and could decline
in the future, any of which could harm our business, revenue and financial results.
We depend in part on internet search engines, such as Bing, Google, Yahoo! and Yandex, to direct a significant
amount of traffic to our service. For example, when a Pinner types a query into a search engine, we may receive
traffic and acquire new Pinners when those search results include Pins, boards, Pinners and other features of our
service that cause the Pinner to click on the Pinterest result or create a Pinterest account. These actions grow our
users due to signups of new Pinners and increase retention and engagement of existing Pinners.
Our ability to maintain and increase the number of users directed to our service from search engines is not within our
control. Search engines, such as Google, have and may continue to modify their search algorithms (including what
content they index) and policies or enforce those policies in ways that are detrimental to us, that we are not able to
predict or without prior notice. When that occurs, we have in the past and expect to experience in the future, declines
or de-indexing in the organic search ranking of certain Pinterest search results, leading to a decrease in traffic to our
service, new user signups and existing user retention and engagement. We have experienced declines in traffic and
user growth as a result of these changes in the past, and anticipate fluctuations as a result of such actions in the
future. For example, in throughout 2021 and most recently in November 2021, Google made certain changes to their
search algorithms which also negatively impacted traffic and user sign-ups. Our ability to appeal these actions is
limited, and we may not be able to revise our search engine optimization (“SEO”) strategies to recover the loss in
traffic or users resulting from such actions. In addition, changes in policies or their enforcement may not apply in the
same manner to our competitors, or our competitors’ SEO strategies to retain and attract users may be more
successful than ours. In addition, some of these search engines are owned by companies that compete with various
aspects of our business. When email platforms, such as Google, change their policies related to the placement of our
emails in Pinners' inboxes, it can affect the open and click rate of our emails. Such changes have led to and may lead
to a decrease in traffic to our service, new user signups and existing user retention and engagement. To offset some
of the impact on our user growth, we may increase our investment in other growth strategies, such as paid marketing
or other initiatives that drive user acquisition, which may cost more and be less effective. Any significant reduction in
the number of Pinners directed to our website or mobile application from search engines or email could harm our
business, revenue and financial results.
In addition, we also rely on certain major online stores for distribution of our application. If these application store
providers modify or implement new terms, we may be required to modify our product to maintain our ability to remain
in that application store. Such requirements or our inability to meet such requirements could harm our business,
revenue and financial results.
We allow users to authenticate with our service through third-party login providers. If these third parties
discontinue these tools or experience a breach or outage in their platform or web browser developers make
changes that restrict the use of these tools, user retention, growth or engagement could decline, and our
business, revenue and financial results could be harmed.
A significant number of Pinners access their accounts on our service using a third-party login provider such as
Facebook, Apple or Google. If security on those platforms is compromised, if Pinners are locked out from their
accounts on those platforms or if those platforms experience an outage or otherwise institute policies that prevent
Pinners from accessing their accounts on our service through those logins, Pinners may be unable to access our
service. In addition, third-party log-in providers may institute policies that restrict us from communicating with Pinners.
As a result of these actions, user growth, retention and engagement on our service has been and could be adversely
affected in the future, even if for a temporary period. Additionally, if Facebook or Google discontinue their identity
services or experience an outage, then we may lose and be unable to recover users previously using this function,
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and our user growth or engagement could decline. Any of these events could harm our business, revenue and
financial results.
We depend on Amazon Web Services for the vast majority of our compute, storage, data transfer and other
services. Any disruption of, degradation in or interference with our use of Amazon Web Services could
negatively affect our operations and harm our business, revenue and financial results.
Amazon Web Services (“AWS”) provides the cloud computing infrastructure we use to host our website, mobile
application and many of the internal tools we use to operate our business. We have a long-term commitment with
AWS. Under the agreement with AWS, in return for negotiated concessions, we currently are required to maintain a
substantial majority of our monthly usage of certain compute, storage, data transfer and other services on AWS. This
agreement is terminable only under certain conditions, including by either party following the other party’s material
breach, which may be the result of circumstances that are beyond our control. A material breach of this agreement by
us, or early termination of the agreement, could carry substantial penalties, including liquidated damages. If AWS
increases pricing terms, terminates or seeks to terminate our contractual relationship, establishes more favorable
relationships with our competitors, or changes or interprets its terms of service or policies in a manner that is
unfavorable, those actions could harm our business, revenue and financial results.
Any significant disruption of, limitation of our access to or other interference with our use of AWS would negatively
impact our operations and our business could be harmed. In addition, any transition of the cloud services currently
provided by AWS to another cloud services provider would be difficult to implement and would cause us to incur
significant time and expense and could disrupt or degrade our ability to deliver our products and services. The level of
service provided by AWS could affect the availability or speed of our services. If Pinners, creators or advertisers are
not able to access our service or platform or encounter difficulties in doing so, we may lose Pinners, creators or
advertisers and could harm our business and reputation.
We utilize data center hosting facilities operated by AWS, located in various facilities. However, we have implemented
a limited disaster recovery program which does not allow us to serve network traffic from back-up data center
services. An unexpected disruption of services provided by these data centers could hamper our ability to handle
existing or increased traffic, result in the loss of data or cause our platform to become unavailable, which may harm
our reputation and business.
We must effectively operate with mobile operating systems, web browsers, online application stores,
networks, regulations and standards, which we do not control. Changes in our products or to those mobile
operating systems, web browsers, networks, regulations or standards may harm Pinner retention, growth and
engagement.
Because our service is used on mobile devices and through web browsers, our application must remain interoperable
with popular mobile operating systems and browsers, including Android, Chrome, iOS and Safari. We have no control
over these operating systems and browsers. Any changes to these operating systems, browsers or the online stores
distributing our application that impact the accessibility, speed or functionality of our service or give preferential
treatment to competitive products, could harm usage of our service. Some of our competitors that control the
operating systems, browsers and online stores that our application runs on, or is distributed through, could make
interoperability of our service with those systems, browsers and stores more difficult. In addition, new products we
introduce may take longer to function with these systems and browsers.
If we are unable to deliver consistent, high-quality Pinner experiences across different devices with different operating
systems, user growth, retention or engagement may decline, which could harm our business, revenue and financial
results.
The adoption of any laws or regulations that adversely affect the growth, popularity or use of the internet, including
laws governing internet neutrality, could decrease the demand for our products and services and increase our cost of
doing business. For example, in June 2018, the Federal Communications Commission repealed the 2015 “open
internet rules,” which had prohibited broadband internet access service providers in the United States from impeding
access to most content, or otherwise unfairly discriminating against content providers. The impact of this repeal on the
way Pinners access the internet and the way we interact with internet service providers remain uncertain. Other
countries also have rules requiring equal access to internet content. Regulatory changes could limit Pinners’ ability to
access our service or make our service a less attractive alternative to our competitors’ platforms and cause our user
growth, retention or engagement to decline, which could harm our business, revenue and financial results.
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If it becomes more difficult for Pinners to access and use our service on their browsers or mobile devices, if Pinners
choose not to access or use our service on their mobile devices, or if Pinners choose to use mobile products that limit
access to our service, user growth, retention and engagement may decline, which could harm our business, revenue
and financial results.
We rely on software, technologies and related services from other parties, and problems in their use, access
or performance could increase our costs and harm our business, revenue and financial results.
We rely on software, technologies and related services from third parties to operate critical functions of our business.
Third-party technologies or services that we utilize may become unavailable due to a variety of reasons, including
outages, interruptions or failure to perform under our agreement. Unexpected delays in their availability or function
can, in turn, affect the use or availability of our service. Further, third-party software and service providers may no
longer provide such software and services on commercially reasonable terms or may fail to properly maintain or
update their software. In such instances, we may be required to seek licenses to software or services from other
parties or to redesign our products to function with new software or services. This could result in delays in the release
of new products until equivalent technology can be identified, licensed or developed, and integrated into our platform
and services. Furthermore, we might be forced to limit the features available in our current or future products. These
occurrences, delays and limitations, if they occur, could harm our business, revenue and financial results.
Technologies have been developed that can block the display of our ads, which could harm our business,
revenue and financial results.
Technologies have been developed, and will likely continue to be developed, that can block the display of our ads. We
generate substantially all of our revenue from advertising, and ad blocking technologies may prevent the display of
certain of our ads, which could harm our business, revenue and financial results. 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. More users may choose to use products that block or obscure the display of
our ads if we are unable to successfully balance the amount of organic content and paid advertisements, or if users’
attitudes toward advertisements become more negative. Further, regardless of their effectiveness, ad blockers may
generate concern regarding the health of the digital advertising industry, which could reduce the value of digital
advertising and harm our business, revenue and financial results.
Risks relating to Legal and Regulatory Matters
We may be liable as a result of content or information that is published or made available on our service.
We are subject to many U.S. federal and state and foreign laws and regulations that involve matters central to our
business, including laws and regulations that involve data privacy and protection, intellectual property (including
copyright and patent laws), content regulation, rights of publicity, advertising, marketing, health and safety,
competition, protection of minors, consumer protection, taxation, anti-bribery, anti-money laundering and corruption,
economic or other trade prohibitions or sanctions or securities law compliance. We may be sued or face regulatory
action for claims relating to content or information that is published or made available on our service. Our systems,
tools and personnel that help us to proactively detect potentially policy-violating or otherwise inappropriate content
cannot identify all such content on our service, and in many cases this content will appear on our service. This risk
may increase as we develop and increase the use of certain products or product features, such as video and live
streaming content, for which identifying such content is challenging. Additionally, some controversial content may not
be banned on our service and, even if it is not featured in advertisements or recommendations to Pinners, may still
appear in search results or be saved on boards. This risk is enhanced in certain jurisdictions outside of the United
States where our protection from liability for content published on our platform by third parties may be unclear and
where we may be less protected under local laws than we are in the United States. Further, if policy-violating content
is found on our service, we may be in violation of the terms of certain of our key agreements, which may result in
termination of the agreement and, in some cases, payment of damages. We could incur significant costs in
investigating and defending such claims and, if we are found liable, damages. If any of these events occur, our
business, revenue and financial results could be harmed.
We rely on a variety of statutory and common-law frameworks and defenses relevant to the content available on our
service, including but not limited to, the Digital Millennium Copyright Act ("DMCA"), the Communications Decency Act
("CDA") and the fair-use doctrine in the United States, and the Electronic Commerce Directive in the European Union.
The DMCA limits, but does not necessarily eliminate, our potential liability for caching, hosting, listing or linking to
third-party content that may include materials that infringe copyrights. The CDA further limits our potential liability for
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content uploaded onto our service by third parties. Defenses such as the fair-use doctrine (and related doctrines in
other countries) may be available to limit our potential liability for featuring third-party intellectual property content for
purposes such as reporting, commentary and parody. In the European Union, the Electronic Commerce Directive
offers certain limitations on our potential liability for featuring third-party content. However, each of these statutes and
doctrines is subject to uncertain or evolving judicial interpretation and regulatory and legislative amendments, and we
cannot guarantee that such frameworks and defenses will be available for our protection. Regulators in the United
States and in other countries may introduce new regulatory regimes that increase potential liability for content
available on our service, including liability for misleading or manipulative information, hate speech, privacy,
copyrighted content and other types of online harm and current protections from liability for third-party content in the
United States could decrease or change. For example, there have been various Congressional and regulatory efforts
to restrict the scope of the protections available to online platforms under Section 230 of the CDA. Similarly, the EU
Directive on Copyright in the Digital Single Market (DSM) has been implemented by a few EU member states that
alter the liability scheme for online sharing-content platforms and impose additional requirements for the content
uploaded by their users to protect copyright owners against unlicensed use of their work. If amendments to Section
230 of the CDA or other statutory or regulatory changes reduce liability protections for content published on our
service, we may be required to make significant changes to our business model, including increasing our content
moderation operations and building in additional product features or tools that may not be favorable to our business,
add payment obligations or compliance costs. There are also a number of new laws and legislative proposals in the
United States, at both the federal and state level, and in the European Union, U.K. and other countries, that further
impose new obligations in areas affecting our business, such as liability for copyright infringement, distributing certain
advertisements to minors, and other online harm.
We could also face fines or orders restricting or blocking our service in particular countries as a result of content on
our platform. For example, Germany, Russia, Austria and Turkey have implemented regulations that impose
significant fines or provide for blocking services for failures to comply with certain content removal and disclosure
obligations, and other countries may enact similar legislation, which would impose penalties for failure to remove
certain content. Additionally, in April 2021, the European Union adopted new regulations that require certain online
service providers to remove terrorist-related content within one hour of being flagged. These regulations will begin to
apply in June 2022. There can be no assurance that the tools we use for certain removal obligations or any new
custom tools we develop will be sufficient to maintain compliance with the new regulations.
Any new legislation or changes to existing legislation may be difficult to comply with in a timely and comprehensive
fashion and may expose our business, users, or employees to increased costs. These costs could be prohibitively
expensive for a company of our size, which could prevent us from launching a product or require us to restrict access
to a product in a particular market. This could disadvantage us relative to our competitors with more resources. If the
rules, doctrines or currently available defenses change, if international jurisdictions refuse to apply similar protections
that are currently available in the United States or the European Union or if a court were to disagree with our
application of those rules to our service, we could be required to expend significant resources to try to comply with the
new rules or incur liability and our business, revenue and financial results could be harmed.
Action by governments to restrict access to our service or certain of our products in their countries could
harm our business, revenue and financial results.
Governmental authorities outside the United States have restricted, and may in the future seek to restrict access to
our service if they consider us to be in violation of their laws or for other reasons. For example, access to our service
has been or is currently restricted in whole or in part in China, India, Kazakhstan and Turkey. Other governments may
seek to restrict access to or block our service, prohibit or block the hosting of certain content available through our
service, or impose other restrictions that may affect the accessibility or usability of our service in that country for a
period of time or even indefinitely. We may also decide to stop offering our service in a country as a result of these
types of restrictions. For example, some countries have enacted laws that allow websites to be blocked for hosting
certain types of content or may require websites to remove certain restricted content, to appoint local representatives
in the country, or to store user data within that country. It can be challenging or impractical to manage the
requirements of multiple jurisdictions governing the type and nature of the content available on our service. If
prohibitions or restrictions are imposed on our service, or if our competitors are able to successfully penetrate new
geographic markets or capture a greater share of existing geographic markets that we cannot access or where we
face other restrictions, our user growth, retention and engagement may be adversely affected, and our business,
revenue and financial results could be harmed.
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We receive, process, store, use and share data, some of which contains personal information, which subjects
us to complex and evolving governmental regulation and other legal obligations related to data privacy, data
protection and other matters, which are subject to change and uncertain interpretation.
We receive, process, store, use and share data, some of which contains personal information. There are numerous
federal, state, local and foreign laws and regulations regarding matters central to our business, data privacy and the
collection, storing, sharing, use, processing, disclosure and protection of personal information and other data from
users, employees and business partners, the scope of which are regularly changing, subject to uncertain and differing
interpretations and may be inconsistent among countries or conflict with other rules.
The application and interpretation of these laws and regulations are often uncertain, particularly in the new and rapidly
evolving industry in which we operate, and as the focus on data privacy and data protection increases globally, we
are, and will continue to be, subject to varied and evolving data privacy and data protection laws. We are subject to
GDPR which expands the rights of individuals to control how their personal data is processed, includes restrictions on
the use of personal data of children, creates new regulatory and operational requirements for processing personal
data (in particular in case of a data breach), increases requirements for security and confidentiality, restricts transfers
of data outside of the European Economic Area and provides for significant penalties for non-compliance, including
fines of up to 4% of global annual turnover for the preceding financial year or €20 million (whichever is higher) for the
most serious infringements. Additionally, we have historically relied upon multiple legally valid transfer mechanisms to
transfer certain personal data outside of the European Economic Area, including the EU-U.S. Privacy Shield
Framework and Standard Contractual Clauses (SCCs). The Court of Justice of the European Union ruled that the EU-
U.S. Privacy Shield is an invalid transfer mechanism, but upheld the validity of the SCCs subject to future elaboration
of additional safeguards by regulators such as specific “supplemental measures” that should be undertaken to protect
EU data subjects. The validity of data transfer mechanisms and these additional safeguards remains subject to legal,
regulatory, and political developments in both Europe and the U.S. The invalidation of the EU-U.S. Privacy Shield, the
potential invalidation of other data transfer mechanisms, or the potential invalidation of additional safeguards could
have a significant adverse impact on our ability to process and transfer the personal data of EEA users outside of the
European Economic Area. The State of California enacted the CCPA which requires companies that process
information on California residents to make new disclosures to consumers about their data collection, use and sharing
practices, allows consumers to opt out of certain data sharing with third parties and provides a new cause of action for
data breaches. The CCPA is largely untested, and it remains unclear how the CCPA will be interpreted. Additionally, a
new privacy law, the CPRA, was approved by California voters in November 2020. The CPRA significantly modifies
the CCPA, resulting in further uncertainty and requiring us to incur additional costs and expenses. Additionally, the
Federal Trade Commission and many state attorneys general are interpreting federal and state consumer protection
laws to impose standards for the online collection, use, dissemination and security of data. The burdens imposed by
these and other laws and regulations that may be enacted, or new interpretations of existing laws and regulations,
may require us to modify our data storage and data processing practices and policies and to incur substantial costs in
order to comply and may disproportionately affect our business in comparison to our peers that have greater
resources. These laws and regulations may also impact our ability to expand advertising on our platform
internationally, as they may impede our ability to deliver targeted advertising and accurately measure our ad
performance.
Any failure or perceived failure by us to comply with our privacy policies, data privacy-related obligations to Pinners or
other third parties, or our data privacy-related legal obligations, or any compromise of security that results in the
unauthorized release or transfer of personally identifiable information or other user data, or other failure to comply with
these laws and regulations, or regulatory scrutiny, may result in governmental enforcement actions or litigation that
could expose our business to substantial financial penalties, or other monetary or non-monetary relief, negative
publicity, loss of confidence in our products, decline in Pinner or advertiser growth or damage to our brand and
reputation. Companies in the technology industry have recently experienced increased regulatory scrutiny relating to
data privacy and data protection, and we may become subject to enhanced scrutiny and enforcement actions from
regulators to ensure compliance with data privacy and data protection laws and regulations. The GDPR, CCPA and
other such laws and regulations impose new and burdensome obligations, and include substantial uncertainty as to
their interpretation, and we may face challenges in addressing their requirements, which could result in fines or
penalties, lead us to change our data privacy policies and practices and limit our ability to deliver personalized
advertising. Public statements against us by consumer advocacy groups or others could also cause Pinners to lose
trust in us, which could result in declines in user growth, retention or engagement and have an adverse effect on our
brand, reputation and business. Additionally, if third parties that we work with, such as advertisers, service providers or
developers, violate applicable laws or our policies, these violations may also put Pinners’ information at risk and could
in turn have an adverse effect on our business, revenue and financial results.
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Any significant change to applicable laws, regulations or industry practices, or to interpretations of existing laws and
regulations, regarding the use or disclosure of Pinners’ data, or regarding the manner in which we obtain consent from
Pinners for the use and disclosure of such data, could require us to modify our products to allow for limited data use,
possibly in a material manner, and may limit our ability to develop new products that make use of the data that
Pinners voluntarily share. There currently are a number of proposals pending before federal, state and foreign
legislative and regulatory bodies. For example, Member States in the European Union are working to align on a draft
of the “ePrivacy Regulation” that would govern data privacy and the protection of personal data in electronic
communications, in particular for direct marketing purposes. In addition, some countries are considering or have
passed legislation implementing data protection requirements or requiring local storage and processing of data or
similar requirements that could increase the cost and complexity of delivering our service, particularly as we expand
our operations internationally.
We could become involved in legal disputes that are expensive to support, and if resolved adversely, could
harm our business, revenue and financial results.
We are currently involved in, and may in the future be involved in, actual and threatened legal proceedings, claims,
investigations and government inquiries arising in the ordinary course of our business, including intellectual property,
data privacy and data protection, privacy and other torts, illegal or objectionable content, consumer protection,
securities, stockholder derivative claims, employment, governance, workplace culture, contractual rights, civil rights
infringement, false or misleading advertising, or other legal claims relating to content or information that is provided to
us or published or made available on our service. Any proceedings, claims or inquiries involving us, whether
successful or not, may be time consuming, result in costly litigation, unfavorable outcomes, high indemnification
expenses, increased costs of business, may require us to change our business practices or products, require
significant amount of management’s time, may harm our reputation or otherwise harm our business and future
financial results.
We are currently involved in and have been subject to actual and threatened litigation with respect to third-party
patents, trademarks, copyrights and other intellectual property, and may continue to be subject to intellectual property
litigation and threats thereof. Companies in the internet, technology and media industries own large numbers of
patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on allegations of
infringement or other violations of intellectual property rights. As we face increasing competition, grow our business
and products, and become increasingly high profile, the possibility of receiving a larger number of intellectual property
claims against us grows. In addition, various “non-practicing entities” that own patents and other intellectual property
rights have asserted, and may in the future attempt to assert, intellectual property claims against us to extract value
through licensing or other settlements.
From time to time, we receive letters from patent holders alleging that some of our products infringe their patent rights
and from trademark holders alleging infringement of their trademark rights. We also receive letters from holders of
copyrighted content alleging infringement of their intellectual property rights, including DMCA take-down requests. Our
technologies and content, including the content that Pinners pin to our service, may not be able to withstand such
third-party claims.
With respect to any intellectual property claims, we may have to seek a license to continue using technologies or
engaging in practices found to be in violation of a third-party’s rights, which may not be available on reasonable terms
and may significantly increase our operating expenses. A license to continue such technologies or practices may not
be available to us at all and we may be required to discontinue use of such technologies or practices or to develop
alternative non-infringing technologies or practices. The development of alternative non-infringing technologies or
practices could require significant effort and expense or may not be achievable at all. Our business, revenue and
financial results could be harmed as a result.
If we are unable to protect our intellectual property, the value of our brand and other intangible assets may be
diminished, and our business, revenue and financial results could be harmed.
We rely, and expect to continue to rely, on a combination of confidentiality, invention assignment and license
agreements with our employees, consultants and other third parties with whom we have relationships, as well as
trademark, copyright, patent and trade secret protection laws, to protect our proprietary rights. We have filed various
applications for certain aspects of our intellectual property in the United States and other countries, and we currently
hold issued patents in multiple jurisdictions. Further, there can be no assurance that each of our patent applications
will result in the issuance of a patent. In addition, any resulting issued patents may have claims narrower than those in
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our patent applications. There can be no assurance that each of our trademark applications will result in the issuance
of a trademark or that each resulting trademark registration will be able to be maintained. In the future we may acquire
additional patents or patent portfolios, license patents from third parties or agree to license the use of our patents to
third parties, which could require significant cash expenditures. Additionally, our current and future patents,
trademarks and other intellectual property or other proprietary rights may be contested, circumvented or found
unenforceable or invalid.
Third parties may knowingly or unknowingly infringe or challenge our proprietary rights. Effective intellectual property
protection may not be available in every country in which we operate or intend to operate our business. We may not
be able to prevent infringement without incurring substantial time and expense, if at all. There can be no assurance
that others will not offer technologies, products, services, features or concepts that are substantially similar to ours
and compete with our business. Similarly, particularly as we expand the scope of our business and the countries in
which we operate, we may not be able to prevent third parties from infringing, or challenging our use of, our
intellectual property rights, including those used to build and distinguish the “Pinterest” brand. If the protection of our
proprietary rights is inadequate to prevent unauthorized use or appropriation by third parties, the value of our brand
and other intangible assets may be diminished and competitors may be able to more effectively mimic our
technologies, products, services or features or methods of operations. Any of these events could harm our business,
revenue and financial results.
Our use of “open source” software could subject us to possible litigation or could prevent us from offering
products that include open source software or require us to obtain licenses on unfavorable terms.
A portion of the technologies we use incorporates “open source” software, and we may incorporate open source
software in the future. Open source licenses may subject us to certain unfavorable conditions, including requirements
that we offer our products that incorporate the open source software for no cost, that we make publicly available the
source code for any modifications or derivative works we create based upon, incorporating or using the open source
software, or that we license such modifications or derivative works under the terms of the particular open source
license.
We also license to others some of our software through open source projects which requires us to make the source
code publicly available, and therefore can affect our ability to protect our intellectual property rights with respect to that
software. If an author or other third-party that distributes open source software that we use or license were to allege
that we had not complied with the conditions of the applicable license, we could be required to incur significant legal
expenses defending against such allegations and could be subject to significant damages, enjoined from offering our
products that contained the open source software, required to release proprietary source code, required to obtain
licenses from third parties or otherwise required to comply with the unfavorable conditions unless and until we can re-
engineer the product so that it complies with the open source license or does not incorporate the open source
software. Any of the foregoing could disrupt our ability to offer our products and harm our business, revenue and
financial results.
The interpretation and application of U.S. tax legislations or other changes in U.S. or non-U.S. taxation of our
operations could harm our business, revenue and financial results.
Tax reform has been a priority for governments worldwide and numerous proposals have been proposed or enacted.
For example, the 2017 Tax Cuts and Jobs Act (the “Tax Act”) changed how the United States imposes income tax on
multinational corporations in a number of ways. The issuance of additional regulatory or accounting guidance may
affect our analysis of the impact of the law on us and may harm our operating results and financial condition.
Additionally, further regulatory or legislative developments may also arise from the proposed U.S. tax reform under the
Biden Administration, the Build Back Better Act, which has proposed a new corporate alternative minimum tax and
increased taxation of international business operations. There is uncertainty regarding what changes will be enacted,
if any, and the effect on our business and financial results.
Additionally, in October 2020, the Organisation for Economic Co-operation and Development Inclusive Framework, as
part of its Base Erosion and Profit Shifting Action Plan, released proposals that provide a long-term, multilateral
framework on taxation of the digital economy. Recently, the Inclusive Framework jurisdictions announced they
reached agreement on the proposals endorsed by the Group of Twenty inter-governmental political forum, including a
global minimum tax to be implemented in 2023. Some jurisdictions have already enacted a tax on technology
companies that generate revenues from the provision of digital services, including the United Kingdom, France, Spain
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and Italy, to capture tax revenue more immediately. Although we do not know the exact impact, this legislation has and
may continue to result in additional tax exposure.
Further changes to the U.S. or non-U.S. taxation of our operations may increase our worldwide effective tax rate,
result in additional taxes or other costs or have other material consequences, which could harm our business,
revenue and financial results.
Risks relating to our Financial Statements and Performance
We have a limited operating history with the current scale of our business, and, as a result, our past results
may not be indicative of future operating performance.
We have a limited operating history with the current scale of our business, which makes it difficult to forecast our
future results. You should not rely on our past results of operations as indicators of future performance. You should
consider and evaluate our prospects in light of the risks and uncertainties frequently encountered by companies like
ours.
We have incurred operating losses in the past, anticipate increasing our costs and operating expenses, may
incur operating losses in the future and may not maintain profitability.
We have incurred significant net losses in the past and generated net income only recently. We generated net income
of $316.4 million for the year ended December 31, 2021 and net losses of $128.3 million and $1,361.4 million for the
years ended December 31, 2020 and 2019, respectively. As of December 31, 2021, we had an accumulated deficit of
$2,018.6 million. We have achieved profitability only recently and may not realize sufficient revenue to maintain
profitability in future periods.
We also anticipate that our operating expenses will increase substantially in the foreseeable future as we continue to
expand our operations domestically and internationally, enhance our product offerings, broaden our Pinner and
advertiser base, expand our marketing channels, hire additional employees and develop our technology. These efforts
may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue
sufficiently to offset these higher expenses. We may encounter unforeseen expenses, operating delays or other
unknown factors that may result in losses in future periods. We have significant unrecognized share-based
compensation expense, which we expect to recognize over the next several years. In addition, we have entered into
certain non-cancelable commitments that limit our ability to reduce our cost and expenses in the future. For more
information, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" and
"Notes to Financial Statements." Any failure to increase our revenue as we implement initiatives to grow our business
could prevent us from achieving or maintaining profitability on either a quarterly or annual basis.
Our operating results are likely to fluctuate from quarter to quarter, which makes them difficult to predict.
Our quarterly operating results are tied to certain key business metrics that have fluctuated in the past and are likely
to fluctuate in the future, which makes them difficult to predict. Our operating results depend on numerous factors,
many of which are outside of our control, including:
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our ability to generate revenue from our service;
our ability to improve or maintain gross margins;
the number and relevancy of advertisements shown to Pinners;
the relevancy of content shown to Pinners;
the manner in which Pinners engage with different products, where certain products may cause us to
generate less revenue
downward pressure on the pricing of our advertisements;
the timing, cost of and mix of new and existing marketing and promotional efforts as we grow and expand our
operations to remain competitive;
fluctuations (seasonal or otherwise) in spending by our advertisers and platform usage and engagement by
users, each of which may change as our product offerings and business evolves;
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fluctuations in spending by our advertisers and platform usage and engagement by users due to
macroeconomic conditions, such as the COVID-19 pandemic;
seasonal fluctuations in internet usage generally;
the success of technologies designed to block the display of ads;
development and introduction of new product offerings by us or our competitors;
existing, new and evolving regulations, both in the U.S. and internationally;
the ability of our third-party providers to scale effectively and provide the necessary technical infrastructure for
our service on a timely basis;
system failures, disruptions, breaches of security or data privacy or internet downtime, whether on our service
or on those of third parties;
the inaccessibility of our service due to third-party actions;
changes in measurement of our metrics;
costs associated with the technical infrastructure used to operate our business, including hosting services;
fluctuations in the amount of share-based compensation expense;
our ability to anticipate and adapt to the changing internet business or macroeconomic conditions; and the
other risks and uncertainties described in this Annual Report on Form 10-K.
If we are unable to obtain additional financing, if needed, or if we default on our credit obligations, our
operations may be interrupted and our business, revenue and financial results could be harmed.
We may require additional financing to maintain and grow our business. Our ability to obtain financing will depend on,
among other things, our development efforts, business plans, operating performance, investor demand and the
condition of the capital markets at the time we seek financing. We cannot assure you that additional financing will be
available to us on favorable terms when required, or at all. If we raise additional funds through the issuance of equity,
equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our
common stock, and our existing stockholders may experience dilution. If our access to capital is restricted or our
borrowing costs increase as a result of developments in financial markets, our operations and financial condition could
be adversely impacted.
Our revolving credit facility provides our lenders with a first-priority lien against substantially all of our domestic assets,
as well as certain domestic intellectual property, and contains financial covenants and other restrictions on our actions
that may limit our operational flexibility or otherwise adversely affect our results of operations. It contains a number of
covenants that limit our ability and our subsidiaries’ ability to, among other things, incur additional indebtedness, pay
dividends, make redemptions and repurchases of stock, make investments, loans and acquisitions, incur liens,
engage in transactions with affiliates, merge or consolidate with other companies, sell material businesses or assets,
or license or transfer certain of our intellectual property. We are also required to maintain certain financial covenants,
including a consolidated total assets covenant and a liquidity covenant. Complying with these covenants may make it
more difficult for us to successfully execute our business strategy and compete against companies who are not
subject to such restrictions.
If we fail to comply with the covenants under the revolving credit facility, lenders would have a right to, among other
things, terminate the commitments to provide additional loans under the facility, enforce any liens on collateral
securing the obligations under the facility, declare all outstanding loans and accrued interest and fees to be due and
payable and require us to post cash collateral to be held as security for any reimbursement obligations in respect of
any outstanding letters of credit issued under the facility. If any remedies under the facility were exercised, we may not
have sufficient cash or be able to borrow sufficient funds to refinance the debt or sell sufficient assets to repay the
debt, which could immediately materially and adversely affect our business, cash flows, operations and financial
condition. Even if we were able to obtain new financing, it may not be on commercially reasonable terms or on terms
that are acceptable to us.
Additionally, our revolving credit facility utilizes LIBOR or various alternative methods set forth in our revolving credit
facility to calculate the amount of accrued interest on any borrowings. In March 2017, regulators in certain jurisdictions
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including the United Kingdom and the United States announced that they would phase out the use of LIBOR by the
end of 2021. In March 2021, relevant regulators confirmed that the publication of the one-week and two-month U.S.
dollar LIBOR would cease after December 31, 2021, and all remaining U.S. dollar LIBOR tenors would cease after
June 30, 2023. If a published U.S. dollar LIBOR rate is unavailable, the interest rates on our debt indexed to LIBOR
will be determined using one of the alternative methods, any of which could, if the revolver is drawn, result in interest
obligations that are more than the current form, which could have a material adverse effect on our financing costs.
We may have greater than anticipated tax liabilities, which could harm our business, revenue and financial
results.
We operate in a number of tax jurisdictions globally, including in the United States at the federal, state and local
levels, and in many other countries, and plan to continue to expand the scale of our operations in the future. Thus, we
are subject to review and potential audit by a number of U.S. federal, state, local and non-U.S. tax authorities.
Significant judgment is required in determining our worldwide provision for income taxes and other tax liabilities.
Further, tax authorities may disagree with tax positions we take and challenge our tax positions. Successful unilateral
or multi-jurisdictional actions by various tax authorities, including in the context of our current or future corporate
operating structure and third-party and intercompany arrangements (including transfer pricing and the manner in
which we develop, value and use our intellectual property), may increase our worldwide effective tax rate, result in
additional taxes or other costs or have other material consequences, which could harm our business and financial
results. In December 2019, we completed an intra-entity asset transfer of certain of our intellectual property rights to
our Irish subsidiary, which resulted in an increase in foreign deferred tax assets. We cannot be certain that this
transfer will not lead to any unanticipated tax consequences which could harm our financial results.
Although we do not currently incur significant tax costs due to our history of operating losses, our tax liabilities may
increase if our profitability increases in the future. In addition, our effective tax rate may change from year to year
based on changes in the mix of activities and income allocated or earned among various jurisdictions, tax laws and
the applicable tax rates in these jurisdictions (including future tax laws that may become material), tax treaties
between countries, our eligibility for benefits under those tax treaties and the valuation of deferred tax assets and
liabilities. Such changes could result in an increase in the effective tax rate applicable to all or a portion of our income,
which would negatively affect our financial results.
Our ability to use or benefit from our net operating loss carryforwards and certain other tax attributes may be
limited.
As of December 31, 2021, we had federal, California and other state net operating loss carryforwards of $4,314.0
million, $500.8 million and $1,677.0 million, respectively. If not utilized, these will begin to expire in 2028, 2028 and
2026, respectively. Utilization of our net operating loss carryforwards and other tax attributes, such as research and
development tax credits, may be subject to annual limitations, or could be subject to other limitations on utilization or
benefit due to the ownership change limitations provided by Sections 382 and 383 of the Internal Revenue Code of
1986, as amended (the “Code”), and other similar provisions. Further, the Tax Act changed the federal rules governing
net operating loss carryforwards. For net operating loss carryforwards arising in tax years beginning after December
31, 2017, the Tax Act limits a taxpayer’s ability to utilize such carryforwards to 80% of taxable income. In addition, net
operating loss carryforwards arising in tax years ending after December 31, 2017 can be carried forward indefinitely,
but carryback is generally prohibited. Net operating loss carryforwards generated before January 1, 2018 will not be
subject to the Tax Act’s taxable income limitation and will continue to have a twenty-year carryforward period.
Nevertheless, our net operating loss carryforwards and other tax assets could expire before utilization and could be
subject to limitations, which could harm our business and financial results.
Risks Related to Ownership of Our Class A Common Stock
The dual class structure of our common stock has the effect of concentrating voting control with those
stockholders who held our capital stock prior to the completion of our initial public offering ("IPO"), including
our co-founders, executive officers, employees and directors, their affiliates, and all of our other pre-IPO
stockholders (including those unaffiliated with any of our co-founders, executive officers, employees or
directors). This will limit or preclude your ability to influence corporate matters.
Our Class B common stock has twenty votes per share, and our Class A common stock has one vote per share.
Because of the 20-to-1 voting ratio between our Class B and Class A common stock, the holders of our outstanding
Class B hold approximately 75.7% of the voting power of our outstanding capital stock as of December 31, 2021.
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Because the holders of our Class B common stock hold in the aggregate significantly more than a majority of the
combined voting power of our capital stock, such holders (which include our pre-IPO stockholders who have not
converted their Class B common stock to Class A common stock, including those holders unaffiliated with any of our
executive officers, employees or directors) control all matters submitted to our stockholders for approval. The holders
of Class B common stock will no longer hold in the aggregate over 50% of the voting power of our outstanding capital
stock once the Class B common stock represents in the aggregate less than approximately 4.76% of our outstanding
capital stock.
As a result, for the foreseeable future, holders of our Class B common stock could have significant influence over the
management and affairs of our company and over the outcome of all matters submitted to our stockholders for
approval, including the election of directors and significant corporate transactions, such as a merger, consolidation or
sale of substantially all of our assets, even though their stock holdings were to represent in the aggregate less than
50% of the outstanding shares of our capital stock. In addition, this may prevent or discourage unsolicited acquisition
proposals or offers for our capital stock that you may feel are in your best interest as one of our stockholders. These
holders of our Class B common stock may have interests that differ from yours and may vote in a way with which you
disagree and which may be adverse to your interests. This control may adversely affect the trading price of our Class
A common stock. Despite no longer being employed by us, Paul Sciarra, one of our co-founders, remains able to
exercise significant voting power. If we terminate our other co-founders’ relationship, they would also continue to have
the ability to exercise significant voting power to the extent they were to retain their Class B common stock while our
other existing holders disposed of their Class B common stock.
Transfers by holders of Class B common stock will generally result in those shares converting to Class A common
stock, except certain transfers to entities, including certain charities and foundations, to the extent the transferor
retains sole dispositive power and exclusive voting control with respect to the shares of Class B common stock, and
certain other transfers described in our amended and restated certificate of incorporation. In addition, all shares of
Class B common stock will automatically convert into shares of Class A common stock on (i) the seven-year
anniversary of the closing date of our IPO, except with respect to shares of Class B common stock held by any holder
that continues to beneficially own at least 50% of the number of shares of Class B common stock that such holder
beneficially owned immediately prior to completion of our IPO, and (ii) a date that is between 90 to 540 days, as
determined by the board of directors, after the death or permanent incapacity of Mr. Silbermann. Conversions of Class
B common stock to Class A common stock have already had and will continue to have the effect, over time, of
increasing the relative voting power of those holders of Class B common stock who retain their shares in the long
term.
Our dual class structure may depress the trading price of our Class A common stock.
We cannot predict whether our dual class structure will result in a lower or more volatile market price of our Class A
common stock or in adverse publicity or other adverse consequences. For example, certain index providers have
restrictions on including companies with multiple-class share structures in certain of their indexes. In addition, several
stockholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the
dual class structure of our common stock may cause stockholder advisory firms to publish negative commentary
about our corporate governance practices, recommend that stockholders vote against certain company annual
stockholder meeting proposals or otherwise seek to cause us to change our capital structure. Any such exclusion from
indices or any actions or publications by stockholder advisory firms critical of our corporate governance practices or
capital structure could adversely affect the value and trading market of our Class A common stock.
An active trading market for our Class A common stock may not be sustained.
Our Class A common is listed on the NYSE under the symbol “PINS.” However, we cannot assure you that an active
trading market for our Class A common stock will be sustained. Accordingly, we cannot assure you of the likelihood
that an active trading market for our Class A common stock will be maintained, the liquidity of any trading market, your
ability to sell your shares of our Class A common stock when desired or the prices that you may obtain for your
shares.
The trading price of our Class A common stock has been and may continue to be volatile, and you could lose
all or part of your investment.
The trading price of our Class A common stock has been, and is likely to continue to be volatile and could be subject
to fluctuations in response to various factors, some of which are beyond our control. These fluctuations could cause
you to lose all or part of your investment in our Class A common stock since you might be unable to sell your shares
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at or above the price you paid. Factors that could cause fluctuations in the trading price of our Class A common stock
include the following:
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price and volume fluctuations in the overall stock market from time to time;
volatility in the trading prices and trading volumes of technology stocks;
changes in operating performance and stock market valuations of other technology companies generally, or
those in our industry in particular;
sales, or anticipated sales, of shares of our Class A common stock by us or our stockholders, including when
stockholders sell shares of our Class A common stock into the market to cover taxes due upon the settlement
of restricted stock units ("RSUs") or the exercise of stock options, or conversions, or anticipated conversions,
of a substantial number of shares of our Class B common stock by our stockholders;
actions by institutional stockholders;
failure by industry or securities analysts to maintain coverage of us, downgrade of our Class A common stock
by analysts or provision of a more favorable recommendation of our competitors;
failure by analysts to regularly publish research reports or the publication of an unfavorable or inaccurate
report about our business;
changes by external analysts to their financial and operating estimates for our company or our performance
relative to third parties' estimates or the expectations;
forward-looking financial or operating information or financial projections we may provide to the public, any
changes in that information or projections or our failure to meet projections;
any indebtedness we may incur in the future;
• whether investors or securities analysts view our stock structure unfavorably, particularly our dual class
structure and the significant voting control of holders of our Class B common stock;
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announcements by us or our competitors of new products, features, services, technical innovations,
acquisitions, strategic partnerships, joint ventures or capital commitments;
announcements by us or estimates by third parties of actual or anticipated changes in the size of our user
base or level of engagement, or those of our competitors;
the public’s perception of the quality and accuracy of our key metrics on our user base and engagement;
the public’s reaction to our press releases, other public announcements and filings with the SEC;
rumors and market speculation involving us or other companies in our industry;
actual or anticipated fluctuations in our user growth, retention, engagement, revenue or other operating
results;
actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape
generally;
litigation involving us, our industry, or both, or investigations by regulators and other third parties into our
operations or those of our competitors;
developments or disputes concerning our intellectual property or other proprietary rights;
developments or disputes concerning our culture or other diversity, equity and inclusion practices and
initiatives;
announced or completed acquisitions of businesses, products, services or technologies by us or our
competitors;
existing, new and evolving regulations, both in the U.S. and internationally;
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changes in accounting standards, policies, guidelines, interpretations or principles;
any significant changes in our management;
stakeholder dissatisfaction if we are unable to meet stakeholders' expectations and requirements around
environmentally friendly, ethical, socially conscious, and sustainable business practices or disclosures;
if we are unable to address workplace culture related issues (including to meet the goals we set in our
implement our Special Committee's
Inclusion and Diversity Report
recommendations relating to workplace culture);
that we publish annually or
• macroeconomic events that are beyond our control, such as the global outbreak of the COVID-19 pandemic;
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general economic conditions and slow or negative growth of our markets.
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and
continue to affect the market prices of equity securities of many technology companies. Stock prices of many
technology companies, including ours, have fluctuated in a manner that may be unrelated or disproportionate to the
financial performance of such companies. Following periods of volatility in the overall market and the market price of a
particular company’s securities, securities class action and derivative litigation has often been instituted against these
companies, including against us. Such litigation could result in substantial costs and a diversion of our management’s
attention and resources. Further, when our revenue, users or operating results fall below the expectations of investors
or securities analysts or below any guidance we may provide to the market, the price of our Class A common stock
has declined and could likely decline in the future.
Future offerings of debt or equity securities by us or existing stockholders may adversely affect the market
price of our Class A common stock.
In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional
capital stock or offering debt or other securities, including commercial paper, medium-term notes, senior or
subordinated notes, debt securities convertible into equity or shares of preferred stock. Future acquisitions could also
require substantial additional capital in excess of cash from operations.
Issuing additional shares of capital stock or other securities, including securities convertible into equity, may dilute the
economic and voting rights of our existing stockholders, reduce the market price of our Class A common stock or both.
Upon liquidation, holders of debt securities and preferred shares, if issued, and lenders with respect to other
borrowings would receive a distribution of our available assets prior to the holders of our common stock. Debt
securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain
events may increase the number of equity securities issuable upon conversion. Preferred shares, if issued, could
have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could
limit our ability to pay dividends to the holders of our common stock. Our decision to issue securities in any future
offering will depend on market conditions and other factors beyond our control, which may adversely affect the
amount, timing or nature of our future offerings. In addition, the large number of shares of our common stock eligible
for public sale or subject to rights requiring us to register them for public sale could depress the market price of our
Class A common stock. The market price of our Class A common stock could decline as a result of sales of a large
number of shares of our Class A common stock in the market, and the perception that these sales could occur may
also depress the market price of our Class A common stock. As a result, holders of our Class A common stock bear
the risk that our future offerings or future sales of shares may reduce the market price of our Class A common stock
and dilute their stockholdings in our company.
Additional stock issuances, including in connection with settlement of equity awards, could result in
significant dilution to our stockholders.
Future issuances of shares of our Class A common stock or the conversion of a substantial number of shares of our
Class B common stock to Class A common stock, or the perception that these sales or conversions may occur, could
depress the market price of our Class A common stock and result in significant dilution for holders of our Class A
common stock. We currently have Class B common stock that may be issued upon exercise of outstanding stock
options or upon settlement of outstanding restricted stock units, shares of Class A common stock that may be issued
upon settlement of outstanding RSUs or outstanding restricted stock awards ("RSAs"). For more information, see
“Notes to Financial Statements”. We have 5,917,451,052 shares of authorized but unissued Class A common stock
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that are currently not reserved for issuance under our equity incentive plans or charitable giving program. We may
issue all of these shares of Class A common stock without any action or approval by our stockholders, subject to
certain exceptions. We also intend to continue to evaluate acquisition opportunities and may issue Class A common
stock or other securities in connection with these acquisitions. Any common stock issued in connection with our equity
incentive plans, acquisitions, the exercise of outstanding stock options, settlement of RSUs and RSAs or otherwise
would dilute the percentage ownership held by our Class A common stockholders.
Delaware law and provisions in our amended and restated certificate of incorporation and amended and
restated bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the market
price of our Class A common stock.
Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law (the
“DGCL”) may discourage, delay or prevent a change in control by prohibiting us from engaging in a business
combination with an interested stockholder for a period of three years after the person becomes an interested
stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our amended and
restated certificate of incorporation and amended and restated bylaws contain provisions that may make the
acquisition of our company more difficult, including the following:
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our dual class common stock structure, which provides our holders of Class B common stock with the ability
to significantly influence the outcome of matters requiring stockholder approval, even if they own significantly
less than a majority of the shares of our outstanding common stock;
our board of directors is classified into three classes of directors with staggered three-year terms and
directors are only able to be removed from office for cause;
certain amendments to our amended and restated certificate of incorporation will require the approval of
662⁄3% of the then-outstanding voting power of our capital stock;
approval of 662⁄3% of the then-outstanding voting power of our capital stock, voting as a single class, is
required for stockholders to amend or adopt any provision of our bylaws;
our stockholders can take action only at a meeting of stockholders and not by written consent;
vacancies on our board of directors can be filled only by our board of directors and not by stockholders;
no provision in our amended and restated certificate of incorporation or amended and restated bylaws
provides for cumulative voting, which limits the ability of minority stockholders to elect director candidates;
only our chairman of the board of directors, our chief executive officer, our president or another officer
selected by a majority of the board of directors are authorized to call a special meeting of stockholders;
certain litigation against us can only be brought in Delaware;
nothing in our amended and restated certificate of incorporation precludes future issuances without
stockholder approval of the authorized but unissued shares of our Class A common stock;
our amended and restated certificate of incorporation authorizes undesignated preferred stock, the terms of
which may be established and shares of which may be issued, without the approval of the holders of our
capital stock; and
advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring
matters before an annual meeting of stockholders.
These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our
company. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect
directors of their choosing and to cause us to take other corporate actions they desire, any of which, under certain
circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of our common
stock, and could also affect the price that some investors are willing to pay for our Class A common stock.
Our amended and restated certificate of incorporation designates a state or federal court located within the
State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders,
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which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors,
officers or employees.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an
alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii)
any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or
other employees to us or our stockholders, (iii) any action arising pursuant to any provision of the DGCL, or as to
which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) any other action
asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of
Delaware (or, if the Court of Chancery does not have jurisdiction, any state or federal district court in the state of
Delaware), in all cases subject to the court’s having jurisdiction over indispensable parties named as defendants.
Nothing in our amended and restated certificate of incorporation precludes stockholders that assert claims under the
Securities Act or Exchange Act from bringing such claims in federal court, subject to applicable law.
Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of
and consented to this provision. This exclusive forum provision may limit a stockholder’s ability to bring a claim in a
judicial forum of its choosing. If a court were to find the exclusive forum provision in our amended and restated
certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated
with resolving the dispute in other jurisdictions, which could harm our results of operations.
The requirements of being a public company have and may continue to strain our resources, divert
management’s attention and may result in more litigation.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the
Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the NYSE and other
applicable securities rules and regulations. Complying with these rules and regulations has increased and will
continue to increase our legal and financial compliance costs, make some activities more difficult, time-consuming or
costly, and increase demand on our systems and resources.
As a public company we are required to publicly disclose additional details about our business and financial condition
information, which may result in threatened or actual litigation, including by competitors, regulators and other third
parties. If those claims are successful, our business, revenue and financial results could be harmed. Even if the
claims do not result in litigation or are resolved in our favor, the time and resources needed to resolve them could
divert our management’s resources and harm our business, revenue and financial results.
We do not intend to pay dividends for the foreseeable future.
We have never declared or paid dividends on our capital stock. We currently intend to retain any future earnings, and
we do not expect to declare or pay any dividends in the foreseeable future. As a result, stockholders must rely on
sales of their Class A common stock after price appreciation as the only way to realize any future gains on their
investment. In addition, our revolving credit facility contains restrictions on our ability to pay dividends.
General Risks
Adverse global economic and financial conditions could harm our business and financial condition.
Adverse macroeconomic developments could negatively impact our business and financial condition. Adverse global
economic and financial events, such as inflation and the COVID-19 pandemic, have caused, and could, in the future
continue to cause disruptions and volatility in global financial markets. Such conditions have resulted in or may result
in, among other things, an adverse impact on the ability and willingness of companies to spend on advertising,
volatility in our stock price and an adverse impact on the financial condition of the institutions with whom we hold
deposits or the credit quality of the issuers of our cash equivalents and marketable securities. We cannot assure you
that we will perform well in adverse macroeconomic conditions. Since the majority of our revenue is derived from
advertisers within the U.S., economic conditions in the U.S. have a greater impact on us.
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Our financial results may be adversely affected by changes in accounting principles generally accepted in the
United States.
Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting
Standards Board, the American Institute of Certified Public Accountants, the SEC and various bodies formed to
promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could harm
our revenue and financial results and could affect the reporting of transactions completed before the announcement of
a change.
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Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Facilities
Our corporate headquarters is located in San Francisco, California. As of December 31, 2021, we maintained offices
in various locations in the United States and internationally totaling approximately 677,000 square feet, including
approximately 397,000 square feet for our corporate headquarters and in the surrounding areas. We believe that our
facilities are sufficient for our existing needs.
Item 3. Legal Proceedings
We are currently involved in, and may in the future be involved in, actual and threatened legal proceedings, claims,
investigations and government inquiries arising in the ordinary course of our business, including legal proceedings,
claims, investigations and government inquiries involving intellectual property, data privacy and data protection,
privacy and other torts, illegal or objectionable content, consumer protection, corporate governance, securities,
employment, workplace culture, contractual rights, civil rights infringement, false or misleading advertising, or other
legal claims relating to content or information that is provided to us or published or made available on our service. This
risk is enhanced in certain jurisdictions outside of the United States where our protection from liability for content
published on our platform by third parties may be unclear and where we may be less protected under local laws than
we are in the United States.
For information on certain litigation we are involved in, see "Legal Matters" in Note 7 of the accompanying notes to our
consolidated financial statements, which is incorporated herein by reference.
Although the results of the actual and threatened legal proceedings, claims, investigations and government inquiries
in which we currently are involved cannot be predicted with certainty, we do not believe that there is a reasonable
possibility that the final outcome of these matters will have a material adverse effect on our business or financial
results. Regardless of the final outcome, however, litigation can have an adverse impact on us because of defense
and settlement costs, diversion of management resources, harm to our reputation and brand, and other factors.
Item 4 - Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Market Information for Common Stock
Our Class A common stock, par value $0.00001 per share, is listed on the New York Stock Exchange, under the
symbol “PINS” and began trading on April 18, 2019. Prior to that date, there was no public trading market for our
Class A common stock. There is no public trading market for our Class B common stock, par value $0.00001 per
share.
Holders of Record
As of January 28, 2022, there were 132 stockholders of record of our Class A common stock and 64 stockholders of
record of our Class B common stock. The actual number of holders of our Class A and Class B common stock is
greater than the number of record holders and includes stockholders who are beneficial owners but whose shares are
held in street name by brokers or other nominees. The number of holders of record presented here also does not
include stockholders whose shares may be held in trust by other entities.
Dividend Policy
We have never declared or paid dividends on our capital stock and do not intend to pay any dividends in the
foreseeable future. Any future determination to declare dividends will be made at the discretion of our board of
directors, subject to applicable laws, and will depend on then existing conditions, including our financial condition,
operating results, capital requirements, general business conditions and other factors that our board of directors may
deem relevant. In addition, the terms of our revolving credit facility place certain limitations on the amount of dividends
we can pay, even if no amounts are currently outstanding.
Unregistered Sales of Equity Securities
None.
Stock Performance Graph
This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section
18 of the Securities Exchange Act of 1934, as amended ("Exchange Act"), or otherwise subject to the liabilities under
that Section, and shall not be deemed to be incorporated by reference into any filing of Pinterest, Inc. under the
Securities Act of 1933, as amended, or the Exchange Act.
The following graph shows a comparison of the cumulative total return for our Class A common stock, the Standard &
Poor's 500 Stock Index (S&P 500 Index) and the Dow Jones Internet Composite Index (DJINET Composite Index). An
investment of $100 and reinvestment of all dividends is assumed to have been made in our Class A common stock
and in each index on April 18, 2019, the date our Class A common stock began trading on the NYSE, and its relative
performance is tracked through December 31, 2021. The graph uses the closing market price on April 18, 2019 of
$24.40 per share as the initial value of our common stock. The stock price performance of the following graph is not
necessarily indicative of future stock price performance.
46
Item 6. [Reserved]
47
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with
our consolidated financial statements and related notes and other financial information appearing elsewhere in this
Annual Report on Form 10-K. This discussion and analysis contains forward-looking statements that involve risks,
uncertainties and assumptions, including risks and uncertainties regarding the duration, scope and impact of the
COVID-19 pandemic. Our actual results could differ materially from these forward-looking statements as a result of
many factors, including those discussed in “Risk Factors” and “Note About Forward-Looking Statements” included
elsewhere in this Annual Report on Form 10-K.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2021
compared to the year ended December 31, 2020 is presented below. A discussion regarding our financial condition
and results of operations for the year ended December 31, 2020 compared to the year ended December 31, 2019 is
included under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our
Annual Report on Form 10-K for the year ended December 31, 2020.
Overview of 2021 Results
Our key financial and operating results as of and for the year ended December 31, 2021 are as follows:
•
Revenue was $2,578.0 million, an increase of 52% compared to 2020.
• Monthly active users ("MAUs") were 431 million, a decrease of 6% compared to December 31, 2020.
•
•
•
•
•
•
•
Share-based compensation expense was $415.4 million, an increase of $94.4 million compared to 2020.
Total costs and expenses were $2,251.8 million.
Income from operations was $326.2 million.
Net income was $316.4 million.
Adjusted EBITDA was $814.4 million.
Cash, cash equivalents and marketable securities were $2,480.1 million.
Headcount was 3,225.
Update on the COVID-19 Pandemic
The COVID-19 pandemic, which resulted in authorities implementing numerous preventative measures to contain or
mitigate the outbreak of the virus, such as travel bans and restrictions, limitations on business activity, quarantines
and shelter-in-place orders, continues to have an impact globally. These measures have caused, and are continuing
to cause, business slowdowns or shutdowns in affected areas, both regionally and worldwide. These measures
initially positively impacted Pinner engagement and user growth in both the U.S. and international geographies as
people spent more time at home and sought online inspiration for some of our core use cases. Starting in mid-March
2021, the easing of the restrictions related to the COVID-19 pandemic began to slow our global MAU growth and
lowered Pinner engagement as compared to 2020 as Pinners began spending less time at home. This behavior
reversed some of the MAU gains we saw during 2020, and, as a result, we saw a decline in global MAUs in the fourth
quarter as compared to the same period in 2020.
Since the impact of the COVID-19 pandemic on our results of operations and overall financial performance remains
unprecedented and unpredictable, our past results may not be indicative of our future performance. Given the
uncertainty, we are unable to predict the extent and duration of the impact of the COVID-19 pandemic on advertiser
demand, Pinner engagement, and our business, operations and financial results. See "Risk Factors" and "Note About
Forward-Looking Statements” for additional details.
48
Trends in User Metrics
Monthly Active Users. We define a monthly active user as an authenticated Pinterest user who visits our website,
opens our mobile application or interacts with Pinterest through one of our browser or site extensions, such as the
Save button, at least once during the 30-day period ending on the date of measurement. We present MAUs based on
the number of MAUs measured on the last day of the current period. We calculate average MAUs based on the
average of the number of MAUs measured on the last day of the current period and the last day prior to the beginning
of the current period. MAUs are the primary metric by which we measure the scale of our active user base.
Quarterly Monthly Active Users
(in millions)
Note: United States and International may not sum to Global due to rounding.
A portion of our MAUs visit Pinterest on a weekly basis. We define a weekly active user (“WAU”) as an authenticated
Pinterest user who visits our website, opens our mobile application or interacts with Pinterest through one of our
browser or site extensions, such as the Save button, at least once during the seven-day period ending on the date of
measurement. We actively monitor the relationship of WAUs to MAUs, which has stayed relatively consistent over
time. As of December 31, 2021, the proportion of WAUs to MAUs was 58%.
49
Global265291300322335367416442459478454444431Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21050100150200250300350400450500United States82858587889096989898918986Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21050100150200250300350400International184206215235247277321343361380363356346Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21050100150200250300350400 As of December 31, 2021, we have experienced a decline in our global MAUs as compared to December 31, 2020
due to the easing of the restrictions related to the COVID-19 pandemic and lower search traffic driven by changes in
search engine algorithms. As a result, we are unable to predict the extent to which we will be able to attract new
Pinners, retain existing Pinners, recover past Pinners or maintain or increase the frequency and duration of Pinners'
engagement as uncertainties around restrictions resulting from the COVID-19 pandemic continue.
Trends in Monetization Metrics
Revenue. We calculate revenue by user geography based on our estimate of the geographic location of our users
when they perform a revenue-generating activity. The geography of our users affects our revenue and financial results
because we currently only monetize certain countries and currencies and because we monetize different geographies
at different average rates. Our revenue in the United States is higher primarily due to our decision to focus our earliest
monetization efforts there and also due to the relative size and maturity of the U.S. digital advertising market.
Quarterly Revenue
(in millions)
50
Global$273$202$261$280$400$272$272$443$706$485$613$633$847Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21$0$100$200$300$400$500$600$700$800$900 Note: Revenue by geography in the charts above is geographically apportioned based on our estimate of the geographic location of our users when
they perform a revenue-generating activity. This allocation differs from our disclosure of revenue disaggregated by geography in the notes to our
consolidated financial statements where revenue is geographically apportioned based on our customers’ billing addresses. United States and
International may not sum to Global and quarterly amounts may not sum to annual due to rounding.
Average Revenue per User (“ARPU”). We measure monetization of our platform through our average revenue per
user metric. We define ARPU as our total revenue in a given geography during a period divided by average MAUs in
that geography during the period. We calculate ARPU by geography based on our estimate of the geography in which
revenue-generating activities occur. We present ARPU on a U.S. and international basis because we currently
monetize users in different geographies at different average rates. U.S. ARPU is higher primarily due to our decision
to focus our earliest monetization efforts there and also due to the relative size and maturity of the U.S. digital
advertising market.
Quarterly Average Revenue per User
51
United States$257$187$238$251$350$237$232$374$582$390$480$498$648Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21$0$100$200$300$400$500$600$700International$17$15$24$28$50$35$41$69$123$95$133$135$199Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21$0$100$200$300$400$500$600$700Global$1.06$0.73$0.88$0.90$1.22$0.77$0.70$1.03$1.57$1.04$1.32$1.41$1.93Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21$0.00$0.50$1.00$1.50$2.00 For the year ended December 31, 2021, global ARPU was $5.79, which represents an increase of 36% compared to
the year ended December 31, 2020. For the year ended December 31, 2021, U.S. ARPU was $21.98 and
international ARPU was $1.59, which represent increases of 43% and 80%, respectively, compared to the year ended
December 31, 2020.
We use MAUs and ARPU to assess the growth and health of our overall business and believe that these metrics best
reflect our ability to attract, retain, engage and monetize our users, and thereby drive revenue.
52
United States$3.16$2.25$2.80$2.93$4.00$2.66$2.50$3.85$5.94$3.99$5.08$5.55$7.43Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00International$0.09$0.08$0.11$0.13$0.21$0.13$0.14$0.21$0.35$0.26$0.36$0.38$0.57Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00 Non-GAAP Financial Measure
To supplement our consolidated financial statements presented in accordance with GAAP, we consider Adjusted
EBITDA, a financial measure which is not based on any standardized methodology prescribed by GAAP.
We define 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, for the third quarter of 2020, a one-time payment for the
termination of a future lease contract.
We use Adjusted EBITDA to evaluate our operating results and for financial and operational decision-
making purposes. We believe Adjusted EBITDA helps identify underlying trends in our business that could otherwise
be masked by the effect of the income and expenses that it excludes. We also believe Adjusted EBITDA provides
useful information about our operating results, enhances the overall understanding of our past performance and future
prospects, and allows
financial and
operational decision-making. We are presenting Adjusted EBITDA to assist investors in seeing our operating results
through the eyes of management, and because we believe that this measure provides an additional tool for investors
to use in comparing our core business operating results over multiple periods with other companies in our industry.
However, our definition of Adjusted EBITDA may not be the same as similarly titled measures used by other
companies.
transparency with respect
to key metrics we use
for greater
for
Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in
accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA rather than net
income (loss), the nearest GAAP equivalent. For example, Adjusted EBITDA excludes:
•
•
certain recurring, non-cash charges such as depreciation of fixed assets and amortization of acquired
intangible assets, although these assets may have to be replaced in the future; and
share-based compensation expense, which has been, and will continue to be for the foreseeable future, a
significant recurring expense and an important part of our compensation strategy.
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures,
including net income (loss) and our other financial results presented in accordance with GAAP. The following table
presents a reconciliation of net income (loss), the most directly comparable financial measure calculated and
presented in accordance with GAAP, to Adjusted EBITDA (in thousands):
Net income (loss)
Depreciation and amortization
Share-based compensation
Interest income
Interest expense and other (income) expense, net
Provision for income taxes
Non-cash charitable contributions
Termination of future lease contract
Adjusted EBITDA (1)
Year Ended December 31,
2020
2019
2021
$
316,438 $
(128,323) $
(1,361,371)
27,500
415,382
36,988
321,020
27,791
1,377,781
(4,204)
(16,119)
(30,164)
9,420
4,533
45,300
—
635
1,303
—
89,500
2,137
532
—
—
$
814,369 $
305,004 $
16,706
(1)
Non-cash charitable contributions of $2.7 million were not excluded from Adjusted EBITDA for the year ended December 31, 2020 as these
were not material.
53
Components of Results of Operations
Revenue. We generate revenue by delivering ads on our website and mobile application. Advertisers purchase ads
directly with us or through their relationships with advertising agencies. 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.
Cost of Revenue. Cost of revenue consists primarily of expenses associated with the delivery of our service,
including the cost of hosting our website and mobile application. Cost of revenue also includes personnel-related
expense, including salaries, benefits and share-based compensation for employees on our operations teams,
payments associated with partner arrangements, credit card and other transaction processing fees, and allocated
facilities and other supporting overhead costs.
Research and Development. Research and development consists primarily of personnel-related expense, including
salaries, benefits and share-based compensation for our engineers and other employees engaged in the research
and development of our products, and allocated facilities and other supporting overhead costs.
Sales and Marketing. Sales and marketing consists primarily of personnel-related expense, including salaries,
commissions, benefits and share-based compensation for our employees engaged in sales, sales support, marketing,
and customer service functions, advertising and promotional expenditures, professional services and allocated
facilities and other supporting overhead costs. Our marketing efforts also include user- and advertiser-focused
marketing expenditures.
General and Administrative. General and administrative consists primarily of personnel-related expense, including
salaries, benefits and share-based compensation for our employees engaged in finance, legal, human resources and
other administrative functions, professional services, including outside legal and accounting services, charitable
contributions and allocated facilities and other supporting overhead costs.
Other Income (Expense), Net. Other income (expense), net consists primarily of foreign currency exchange gains
and losses and interest earned on our cash equivalents and marketable securities.
Provision for Income Taxes. Provision for income taxes consists primarily of income taxes in foreign jurisdictions
and U.S. federal and state income taxes adjusted for discrete items.
Adjusted EBITDA. We define 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, for the third quarter of 2020, a one-
time payment for the termination of a future lease contract. See “Non-GAAP Financial Measure” for more information
and for a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented
in accordance with GAAP, to Adjusted EBITDA.
54
Results of Operations
The following tables set forth our consolidated statements of operations data (in thousands):
Revenue
Costs and expenses (1):
Cost of revenue
Research and development
Sales and marketing
General and administrative
Total costs and expenses
Income (loss) from operations
Interest income
Interest expense and other income (expense), net
Income (loss) before provision for income taxes
Provision for income taxes
Net income (loss)
Adjusted EBITDA (2)
(1)
Includes share-based compensation expense as follows (in thousands):
Cost of revenue
Research and development
Sales and marketing
General and administrative
Year Ended December 31,
2021
2020
2019
$
2,578,027 $
1,692,658 $
1,142,761
529,320
780,264
641,279
300,977
449,358
606,194
442,807
336,803
358,903
1,207,059
611,590
354,075
2,251,840
1,835,162
2,531,627
326,187
4,204
(142,504)
(1,388,866)
16,119
(9,420)
(635)
30,164
(2,137)
320,971
4,533
(127,020)
(1,360,839)
1,303
532
316,438 $
(128,323) $
(1,361,371)
814,369 $
305,004 $
16,706
$
$
Year Ended December 31,
2021
2020
2019
$
7,438 $
7,865 $
309,715
52,691
45,538
218,718
35,645
58,792
31,758
867,191
239,315
239,517
Total share-based compensation
$
415,382 $
321,020 $
1,377,781
(2)
See “Non-GAAP Financial Measure” for more information and for a reconciliation of net income (loss), the most directly comparable financial
measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.
55
The following table sets forth our consolidated statements of operations data (as a percentage of revenue):
Revenue
Costs and expenses:
Cost of revenue
Research and development
Sales and marketing
General and administrative
Total costs and expenses
Income (loss) from operations
Interest income
Interest expense and other income (expense), net
Income (loss) before provision for income taxes
Provision for income taxes
Net income (loss)
Years Ended December 31, 2021 and 2020
Revenue
Revenue
Year Ended December 31,
2021
2020
2019
100 %
100 %
100 %
21
30
25
12
87
13
—
—
12
—
27
36
26
20
108
(8)
1
—
(8)
—
12 %
(8) %
31
106
54
31
222
(122)
3
—
(119)
—
(119) %
Year Ended December 31,
2021
2020
% change
(in thousands)
$
2,578,027 $
1,692,658
52 %
Revenue for the year ended December 31, 2021 increased by $885.4 million compared to the year ended December
31, 2020. Revenue growth was driven by a 36% increase in ARPU supported by a 12% increase in average MAUs for
the year ended December 31, 2021 as compared to the year ended December 31, 2020. These resulted in a 13%
increase in the number of advertisements served and a 35% increase in the price of advertisements.
For the year ended December 31, 2021 compared to the year ended December 31, 2020, revenue based on our
estimate of the geographic location of our users increased by 42% in the United States to $2,015.9 million driven by a
43% increase in U.S. ARPU offset by a 1% decrease in average U.S. MAUs. International revenue increased by 110%
to $562.1 million driven by an 80% increase in international ARPU supported by a 16% increase in average
international MAUs.
Cost of Revenue
Cost of revenue
Percentage of revenue
Year Ended December 31,
2021
2020
% change
(in thousands)
$
529,320
$
449,358
18 %
21 %
27 %
Cost of revenue for the year ended December 31, 2021 increased by $80.0 million compared to the year ended
December 31, 2020. The increase was primarily due to higher absolute hosting costs due to user growth.
56
Research and Development
Research and development
Percentage of revenue
Year Ended December 31,
2021
2020
% change
(in thousands)
$
780,264
$
606,194
29 %
30 %
36 %
Research and development for the year ended December 31, 2021 increased by $174.1 million compared to the year
ended December 31, 2020. The increase was primarily due to a $91.0 million increase in share-based compensation
expense, including $48.6 million relating to our Co-founder and Chief Design and Creative Officer's transition into a
consulting role, a 14% increase in average headcount, which drove higher personnel expenses, as well as higher
consulting expenses.
Sales and Marketing
Sales and marketing
Percentage of revenue
Year Ended December 31,
2021
2020
% change
(in thousands)
$
641,279
$
442,807
45 %
25 %
26 %
Sales and marketing for the year ended December 31, 2021 increased by $198.5 million compared to the year ended
December 31, 2020. The increase was primarily due to a $85.9 million increase in marketing expenses, a 26%
increase in average headcount, which drove higher personnel expenses, higher consulting expenses and a $17.0
million increase in share-based compensation expense.
General and Administrative
General and administrative
Percentage of revenue
Year Ended December 31,
2021
2020
% change
(in thousands)
$
300,977
$
336,803
(11) %
12 %
20 %
General and administrative for the year ended December 31, 2021 decreased by $35.8 million compared to the year
ended December 31, 2020. The decrease was primarily due to a one-time payment of $89.5 million for the termination
of a future lease contract in August 2020 and a $13.3 million decrease in share-based compensation, offset by a
$42.6 million increase in non-cash charitable contributions and a 30% increase in average headcount, which drove
higher personnel expenses.
Other Income (Expense, Net)
Interest income
Interest expense and other income (expense)
Other income (expense), net
Year Ended December 31,
2021
2020
% change
(in thousands)
4,204 $
(9,420)
16,119
(635)
(5,216) $
15,484
$
$
(74) %
1,383 %
(134) %
Other income (expense), net for the year ended December 31, 2021 decreased by $20.7 million compared to the year
ended December 31, 2020. The decrease was primarily due to lower returns on our marketable securities as a result
of lower interest rates and foreign currency exchange losses.
57
Provision for Income Taxes
Provision for income taxes
Year Ended December 31,
2021
2020
% change
(in thousands)
4,533 $
$
1,303
248 %
Provision for income taxes was primarily due to income generated in our foreign jurisdictions and U.S. states for each
of the periods presented.
Net Income (Loss) and Adjusted EBITDA
Net income (loss)
Adjusted EBITDA
Year Ended December 31,
2021
2020
% change
(in thousands)
$
$
316,438 $
(128,323)
814,369 $
305,004
347 %
167 %
Net income (loss) for the year ended December 31, 2021 was $316.4 million, as compared to $(128.3) million for the
year ended December 31, 2020. Adjusted EBITDA was $814.4 million for the year ended December 31, 2021, as
compared to $305.0 million for the year ended December 31, 2020, due to the factors described above. See “Non-
GAAP Financial Measure” for more information and for a reconciliation of net income (loss), the most directly
comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.
58
Liquidity and Capital Resources
We have historically financed our operations primarily through sales of our stock and payments received from our
customers. Our primary uses of cash are personnel-related costs and the cost of hosting our website and mobile
application. As of December 31, 2021, we had $2,480.1 million in cash, cash equivalents and marketable securities.
Our cash equivalents and marketable securities are primarily invested in short-duration fixed income securities,
including government and investment-grade corporate debt securities and money market funds. As of December 31,
2021, $95.9 million of our cash and cash equivalents was held by our foreign subsidiaries.
In November 2018, we entered into a five-year $500.0 million revolving credit facility with an accordion option which, if
exercised, would allow us to increase the aggregate commitments by the greater of $100.0 million and 10% of our
consolidated total assets, provided we are able to secure additional lender commitments and satisfy certain other
conditions. Interest on any borrowings under the revolving credit facility accrues at either LIBOR plus 1.50% or at an
alternative base rate plus 0.50%, at our election, and we are required to pay an annual commitment fee that accrues
at 0.15% per annum on the unused portion of the aggregate commitments under the revolving credit facility.
The revolving credit facility also allows us to issue letters of credit, which reduce the amount we can borrow. We are
required to pay a fee that accrues at 1.50% per annum on the average aggregate daily maximum amount available to
be drawn under any outstanding letters of credit.
The revolving credit facility contains customary conditions to borrowing, events of default and covenants, including
covenants that restrict our ability to incur indebtedness, grant liens, make distributions to holders of our stock or the
stock of our subsidiaries, make investments or engage in transactions with our affiliates. The revolving credit facility
also contains two financial maintenance covenants: a consolidated total assets covenant and a minimum liquidity
balance of $350.0 million, which includes any available borrowing capacity. The obligations under the revolving credit
facility are secured by liens on substantially all of our domestic assets, including certain domestic intellectual property
assets. We are in compliance with all covenants and there were no amounts outstanding under this facility as of
December 31, 2021.
We believe our existing cash, cash equivalents and marketable securities and amounts available under our revolving
credit facility will be sufficient to meet our working capital and capital expenditure needs over at least the next 12
months, though we may require additional capital resources in the future. We may elect to raise additional capital
through the sale of additional equity to fund our future needs beyond the next 12 months.
Our material cash requirements include our $2,949.1 million commitment with Amazon Web Services, for which we
are not subject to annual purchase commitments, and our $323.6 million of operating lease obligations, of which
$57.9 million is due within the next 12 months.
For the years ended December 31, 2021, 2020 and 2019, our net cash flows were as follows (in thousands):
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Operating Activities
Year Ended December 31,
2021
2020
2019
$
$
$
752,907 $
28,826 $
657
(25,858) $
(47,623) $
(586,501)
22,162 $
19,638 $
1,128,198
Cash flows from operating activities consist of our net income (loss) adjusted for certain non-cash reconciling items,
such as share-based compensation expense, depreciation and amortization, non-cash charitable contributions and
changes in our operating assets and liabilities. Net cash provided by operating activities increased by $724.1 million
for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to an increase
in our net income (loss) after adjusting for non-cash reconciling items and an increase in collections of accounts
receivable.
59
Investing Activities
Cash flows from investing activities consist of capital expenditures for improvements to new and existing office spaces
and acquisitions of businesses. We also actively manage our operating cash and cash equivalent balances and invest
excess cash in short-duration marketable securities, sales and maturities of which we use to fund our ongoing working
capital requirements. Net cash used in investing activities decreased by $21.8 million for the year ended December
31, 2021 compared to the year ended December 31, 2020, primarily due to decreased purchases of marketable
securities, offset by a decrease in proceeds from maturities of marketable securities.
Financing Activities
Cash flows from financing activities consist of net proceeds from our IPO, tax withholdings on release of RSUs and
proceeds from the exercise of stock options. Net cash provided by financing activities increased by $2.5 million for the
year ended December 31, 2021 compared to the year ended December 31, 2020 primarily due to the absence of tax
remittances on release of RSUs offset by a decrease in proceeds from the exercise of stock options.
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in accordance with GAAP. Preparing our consolidated financial
statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenue and expenses as well as related disclosures. Because these estimates and judgments may change from
period to period, actual results could differ materially, which may negatively affect our financial condition or results of
operations. We base our estimates and judgments on historical experience and various other assumptions that we
consider reasonable, and we evaluate these estimates and judgments on an ongoing basis. We refer to such
estimates and judgments, discussed further below, as critical accounting policies and estimates.
Refer to Note 1 to our consolidated financial statements for further information on our other significant accounting
policies.
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 CPC basis, views an ad contracted on a CPM basis or views a video ad contracted on a 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.
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 at inception and record lease liabilities and right-of-use assets on our 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.
60
Item 7a. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks, including changes in foreign currency exchange and interest rates, in the ordinary
course of our business.
Foreign Currency Exchange Risk
Our reporting currency is the U.S. dollar, and the functional currency of our subsidiaries is either their local currency or
the U.S. dollar, depending on the circumstances. While the majority of our revenue and operating expenses are
denominated in U.S. dollars, we have foreign currency risks related to our revenue and operating expenses
denominated in currencies other than the U.S. dollar. We have experienced and will continue to experience
fluctuations in our net income (loss) as a result of transaction gains or losses related to revaluing certain current asset
and current liability balances denominated in currencies other than the functional currency of the subsidiaries in which
they are recorded. To date, these fluctuations have not been material. We have not engaged in hedging activities
relating to our foreign currency exchange risk, although we may do so in the future. We do not believe a 10% increase
or decrease in the relative value of the U.S. dollar would have materially affected our consolidated financial
statements as of and for the years ended December 31, 2021, 2020 and 2019.
Interest Rate Risk
As of December 31, 2021, we held cash, cash equivalents and marketable securities of $2,480.1 million. Our cash
equivalents and marketable securities primarily consist of short-duration fixed income securities, including government
and investment-grade corporate debt securities and money market funds, and our investment policy is meant to
preserve capital and maintain liquidity. Changes in interest rates affect the interest income we earn on our cash, cash
equivalents and marketable securities and the fair value of our cash equivalents and marketable securities. A
hypothetical 100 basis point increase in interest rates would have decreased the market value of our cash equivalents
and marketable securities by $8.1 million and $7.6 million as of December 31, 2021 and 2020, respectively.
61
Item 8. Financial Statements and Supplementary Data
PINTEREST, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42)
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
63
66
67
68
69
70
71
62
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Pinterest, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Pinterest, Inc. (the Company) as of December 31,
2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), redeemable
convertible preferred stock and stockholders' equity (deficit) and cash flows for each of the three years in the period
ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) and our report dated February 3, 2022, expressed an unqualified opinion
thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements. We believe that our
audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion
on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter
below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
63
Description of the
Matter
Revenue Recognition
As described in Note 1 to the consolidated financial statements, the Company generates
substantially all of its revenues by delivering ads on the Pinterest website and mobile
application. Revenue is recognized after transferring control of the promised goods or
services to customers, which occurs when a user clicks on an ad contracted on a cost per
click basis, views an ad contracted on a cost per thousand impressions basis or views a
video ad contracted on a cost per view basis.
The Company’s revenue recognition process utilizes complex proprietary systems and tools
for the initiation, processing, delivery and recording of advertising transactions which includes
a high volume of transactions. This process is dependent on the effective design and
operation of multiple systems, processes, data sources and controls which require significant
audit effort. Also, the identification and evaluation of non-standard terms and conditions
requires incremental judgements to determine the distinct performance obligations and
potential impact to the timing of revenue recognition.
How We Addressed
the Matter in Our
Audit
With the support of our information technology professionals, we identified and tested the
relevant systems and tools used for the determination of initiation, processing, delivery of
advertisements and recording of revenue, which included processes and controls related to
access to the relevant systems and data, changes to the relevant systems and interfaces,
and configuration of the relevant systems. We further obtained an understanding, evaluated
the design, and tested the operating effectiveness of the Company’s internal controls over
the identification and evaluation of non-standard terms and conditions and the resulting
impact on timing and amount of revenue recognition.
To test the Company’s recognition of revenue, our audit procedures included, among others,
testing the completeness and accuracy of the underlying data within the Company’s revenue
systems, and comparing revenue recognized to accounts receivables and cash receipts.
Additionally, we examined standard customer terms and conditions and we selected a
sample of non-standard contractual arrangements
that all material distinct
performance obligations were identified and to test the timing and amount of revenue
recognition.
test
to
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2013.
San Francisco, California
February 3, 2022
64
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Pinterest, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Pinterest, Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission 2013 framework (the COSO criteria). In our opinion, Pinterest, Inc. (the Company) maintained,
in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the
COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related
consolidated statements of operations, comprehensive income (loss), redeemable convertible preferred stock and
stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2021, and
the related notes and our report dated February 3, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ Ernst & Young LLP
San Francisco, California
February 3, 2022
65
PINTEREST, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
ASSETS
Current assets:
Cash and cash equivalents
Marketable securities
Accounts receivable, net of allowances of $8,282 and $8,811 as of December 31, 2021
and 2020, respectively
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
Operating lease right-of-use assets
Goodwill and intangible assets, net
Other assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
Accrued expenses and other current liabilities
Total current liabilities
Operating lease liabilities
Other liabilities
Total liabilities
Commitments and contingencies
Stockholders’ equity:
Class A common stock, $0.00001 par value, 6,666,667 shares authorized, 568,228
and 530,140 shares issued and outstanding as of December 31, 2021 and 2020,
respectively; Class B common stock, $0.00001 par value, 1,333,333 shares
authorized, 88,644 and 96,232 shares issued and outstanding as of December 31,
2021 and 2020, respectively
Additional paid-in capital
Accumulated other comprehensive income (loss)
Accumulated deficit
Total stockholders’ equity
Total liabilities and stockholders’ equity
December 31,
2021
2020
$
1,419,630 $
669,230
1,060,488
1,091,076
653,355
48,090
563,733
33,502
3,181,563
2,357,541
53,401
227,912
61,115
13,247
69,375
155,916
13,562
13,065
$
3,537,238 $
2,609,459
$
17,675 $
242,131
259,806
209,181
29,508
498,495
49,491
155,340
204,831
139,321
22,936
367,088
7
6
5,059,528
4,574,934
(2,181)
2,480
(2,018,611)
(2,335,049)
3,038,743
2,242,371
$
3,537,238 $
2,609,459
The accompanying notes are an integral part of these consolidated financial statements.
66
PINTEREST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Revenue
Costs and expenses:
Cost of revenue
Research and development
Sales and marketing
General and administrative
Total costs and expenses
Income (loss) from operations
Interest income
Interest expense and other income (expense), net
Income (loss) before provision for income taxes
Provision for income taxes
Net income (loss)
Net income (loss) per share attributable to common stockholders:
Basic
Diluted
Weighted-average shares used in computing net income (loss) per share
attributable to common stockholders:
Basic
Diluted
Year Ended December 31,
2021
2020
2019
$
2,578,027 $
1,692,658 $
1,142,761
529,320
780,264
641,279
300,977
449,358
606,194
442,807
336,803
358,903
1,207,059
611,590
354,075
2,251,840
1,835,162
2,531,627
326,187
4,204
(142,504)
(1,388,866)
16,119
(9,420)
(635)
30,164
(2,137)
320,971
4,533
(127,020)
(1,360,839)
1,303
532
316,438 $
(128,323) $
(1,361,371)
0.49 $
0.46 $
(0.22) $
(0.22) $
(3.24)
(3.24)
$
$
$
640,030
691,651
596,264
596,264
420,473
420,473
The accompanying notes are an integral part of these consolidated financial statements.
67
PINTEREST, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
Net income (loss)
Other comprehensive income (loss), net of taxes:
Year Ended December 31,
2021
2020
2019
$
316,438 $
(128,323) $
(1,361,371)
Change in unrealized gain (loss) on available-for-sale marketable
securities
Change in foreign currency translation adjustment
(4,252)
(409)
1,670
163
2,057
11
Comprehensive income (loss)
$
311,777 $
(126,490) $
(1,359,303)
The accompanying notes are an integral part of these consolidated financial statements.
68
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T
PINTEREST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Operating activities
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
Share-based compensation
Non-cash charitable contributions
Other
Changes in assets and liabilities:
Accounts receivable
Prepaid expenses and other assets
Operating lease right-of-use assets
Accounts payable
Accrued expenses and other liabilities
Operating lease liabilities
Net cash provided by operating activities
Investing activities
Purchases of property and equipment and intangible assets
Purchases of marketable securities
Sales of marketable securities
Maturities of marketable securities
Acquisition of business, net of cash acquired
Other investing activities
Net cash used in investing activities
Financing activities
Proceeds from initial public offering, net of underwriters' discounts and commissions
Proceeds from exercise of stock options, net
Shares repurchased for tax withholdings on release of restricted stock units
Payment of deferred offering costs and other financing activities
Net cash provided by financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Net increase in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of period
Cash, cash equivalents and restricted cash, end of period
Supplemental cash flow information
Accrued property and equipment
Year Ended December 31,
2021
2020
2019
$
316,438 $
(128,323) $
(1,361,371)
27,500
415,382
45,300
9,607
(88,862)
(14,727)
43,995
(33,451)
82,435
36,988
321,020
2,748
8,332
27,791
1,377,781
—
(3,990)
(253,173)
(94,224)
4,128
41,898
15,721
23,647
7,161
32,378
11,636
31,890
(50,710)
(44,160)
(28,395)
752,907
28,826
657
(9,031)
(17,401)
(33,783)
(1,104,087)
(1,216,260)
(1,075,875)
274,654
849,520
(36,914)
—
265,422
920,300
—
316
162,198
360,959
—
—
(25,858)
(47,623)
(586,501)
—
1,573,200
—
23,912
—
(1,750)
22,162
(1,058)
748,153
678,911
78,282
(56,894)
(1,750)
19,638
327
1,168
677,743
$
$
1,427,064 $
678,911 $
2,875 $
820 $
41,344
(475,015)
(11,331)
1,128,198
99
542,453
135,290
677,743
4,772
76,387
Operating lease right-of-use assets obtained in exchange for operating lease liabilities $
118,977 $
15,089 $
Reconciliation of cash, cash equivalents and restricted cash to consolidated balance sheets
Cash and cash equivalents
Restricted cash included in prepaid expenses and other current assets
Restricted cash included in other assets
Total cash, cash equivalents and restricted cash
$
1,419,630 $
669,230 $
649,666
1,137
6,297
571
9,110
2,738
25,339
$
1,427,064 $
678,911 $
677,743
The accompanying notes are an integral part of these consolidated financial statements.
70
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. 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 consolidated financial statements in accordance with generally accepted accounting
principles in the United States ("GAAP"). The consolidated financial statements include the accounts of Pinterest, Inc.
and its wholly owned subsidiaries. We have eliminated all intercompany balances and transactions.
Reclassifications
We have reclassified certain amounts in prior periods to conform with current presentation.
Use of Estimates
Preparing our consolidated financial statements in conformity with GAAP requires us to make estimates and
judgments that affect amounts reported in the 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 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.
Segments
We operate as a single operating segment. Our chief operating decision maker is our Chief Executive Officer ("CEO"),
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 as incurred because we would amortize these over a period of
less than one year.
Deferred revenue was not material as of December 31, 2021 and 2020.
71
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cost of Revenue
Cost of revenue consists primarily of expenses associated with the delivery of our service, including the cost of
hosting our website and mobile application. Cost of revenue also includes personnel-related expense, including
salaries, benefits and share-based compensation, for employees on our operations teams, payments associated with
partner arrangements, credit card and other transaction processing fees, and allocated facilities and other supporting
overhead costs.
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 initial public offering ("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.
Income Taxes
We account for income taxes using the asset and liability method. We recognize deferred tax assets and liabilities for
temporary differences between the financial reporting and tax bases of assets and liabilities using the enacted
statutory tax rates in effect for the years in which we expect the differences to reverse. We establish valuation
allowances to reduce deferred tax assets to the amounts we believe it is more likely than not we will be able to realize.
We recognize tax benefits from uncertain tax positions when we believe it is more likely than not that the tax position
is sustainable on examination by tax authorities based on its technical merits. We recognize taxes on Global
Intangible Low-Taxed Income ("GILTI") as a current period expense when incurred.
Advertising Expenses
We record advertising expenses as incurred and include these in sales and marketing in the consolidated statements
of operations. Advertising expenses were $94.7 million, $30.3 million and $55.0 million for the years ended December
31, 2021, 2020 and 2019, respectively.
Marketable Securities
We invest in highly liquid corporate debt securities, U.S. treasury securities, asset-backed securities, U.S. government
agency securities, municipal securities, non-U.S. government and supranational bonds and certificates of deposit. We
classify marketable investments with stated maturities of ninety days or less from the date of purchase as cash
equivalents and those with stated maturities greater than ninety days from the date of purchase as marketable
securities.
We classify our marketable securities as available-for-sale investments in our current assets because they are
available for use to support current operations. We carry our marketable investments at fair value and record
unrealized gains or losses, net of taxes, in accumulated other comprehensive income (loss) in stockholders’ equity
(deficit). We determine realized gains and losses on the sale of marketable investments using a specific identification
method and record these and any expected credit losses in interest expense and other income (expense), net.
72
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Restricted Cash
Our restricted cash primarily consists of certificates of deposit underlying secured letters of credit issued in connection
with our operating leases. Restrictions typically lapse at the end of the lease term, and we classify restricted cash as
current or non-current based on the remaining term of the restriction.
Fair Value Measurements
We account for certain assets and liabilities at fair value, which is the amount we believe market participants would
receive to sell an asset or pay to transfer a liability in an orderly transaction. We categorize these assets and liabilities
into the three levels below based on the degree to which the inputs we use to measure their fair values are
observable in active markets. We use the most observable inputs available to us when measuring fair value.
•
•
•
Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets
Level 2: Observable inputs such as quoted prices for similar assets or liabilities in active markets, quoted
prices for identical assets or liabilities in inactive markets, or inputs that are derived principally from or
corroborated by observable market data or other means
Level 3: Unobservable inputs that are supported by little or no market activity and are significant to the fair
value of the assets or liabilities
Accounts Receivable, Net of Allowances
We record accounts receivable at the original invoiced amount. We maintain an allowance for credit losses for any
receivables we may be unable to collect. We estimate uncollectible receivables based on our receivables’ age, our
customers’ credit quality and current economic conditions, among other factors that may affect our customers’ ability
to pay. We also maintain an allowance for sales credits, which we determine based on historical credits issued to
customers. We include the allowances for credit losses and sales credits in accounts receivable, net in the
consolidated balance sheets.
Property and Equipment
We carry property and equipment at cost less accumulated depreciation and calculate depreciation using the straight-
line method over our assets’ estimated useful lives, which are generally:
Property and Equipment
Computer and network equipment
Furniture and fixtures
Leasehold improvements
Useful Life
3 years
4 years
Lesser of estimated useful life or remaining lease term
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 at inception and record lease liabilities and right-of-use assets on our 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 consolidated statements of operations on a straight-line basis
over the lease term and record variable lease payments as incurred.
73
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Business Combinations
We include the results of operations of businesses that we acquire in our consolidated financial statements beginning
on their respective acquisition dates. We allocate the fair value of the purchase consideration to the assets acquired
and liabilities assumed based on their estimated fair values. When the fair value of the purchase consideration
exceeds the fair values of the identifiable assets and liabilities acquired, we record the excess as goodwill. Our
estimates of fair value are based on assumptions we believe to be reasonable but which are inherently uncertain and
unpredictable, and as a result, actual results may differ from estimates. During the measurement period, which is one
year from the acquisition date, we may record adjustments to the assets and liabilities acquired with the
corresponding offset to goodwill. Any adjustments after the measurement period are reflected in our consolidated
statements of operations.
Long-Lived Assets, Including Goodwill and Intangible Assets
We record definite-lived intangible assets at fair value less accumulated amortization. We calculate amortization using
the straight-line method over the assets’ estimated useful lives of up to ten years.
We review our property and equipment and intangible assets for impairment whenever events or circumstances
indicate that an asset’s carrying value may not be recoverable. We measure recoverability by comparing an asset’s
carrying value to the future undiscounted cash flows that we expect it to generate. If this test indicates that the asset’s
carrying value is not recoverable, we record an impairment charge to reduce the asset’s carrying value to its fair
value. We did not record material property and equipment or intangible asset impairments during the periods
presented.
We review goodwill for impairment at least annually or more frequently if current circumstances or events indicate that
the fair value of our single reporting unit may be less than its carrying value. We did not record any goodwill
impairment during the periods presented.
Website Development Costs
We capitalize costs to develop our website and mobile application when preliminary development efforts are
successfully completed, management has authorized and committed project funding, and it is probable that the
project will be completed and the software will be used as intended. Due to the iterative process by which we perform
upgrades and the relatively short duration of our development projects, development costs meeting our capitalization
criteria were not material during the periods presented.
Loss Contingencies
We are involved in various lawsuits, claims and proceedings that arise in the ordinary course of business. We record a
liability for these when we believe it is probable that we have incurred a loss and can reasonably estimate the loss.
We regularly evaluate current information to determine whether we should adjust a recorded liability or record a new
one.
Foreign Currency
The functional currency of our international subsidiaries is generally their local currency. We translate these
subsidiaries’ financial statements into U.S. dollars using month-end exchange rates for assets and liabilities and
average exchange rates for revenue and costs and expenses. We record translation gains and losses in accumulated
other comprehensive income (loss) in stockholders’ equity (deficit). We record foreign exchange gains and losses in
interest expense and other income (expense), net. Our net foreign exchange gains and losses were not material for
the periods presented.
Concentration of Business Risk
We have an agreement with Amazon Web Services (“AWS”) to provide the cloud computing infrastructure we use to
host our website, mobile application and many of the internal tools we use to operate our business. We are currently
required to maintain a substantial majority of our monthly usage of certain compute, storage, data transfer and other
services on AWS. Any transition of the cloud services currently provided by AWS to another cloud services provider
would be difficult to implement and would cause us to incur significant time and expense.
74
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Concentration of Credit Risk
Financial instruments that may potentially expose us to concentrations of credit risk primarily consist of cash, cash
equivalents, marketable securities and restricted cash. Our investment policy is meant to preserve capital and
maintain liquidity. The policy limits our marketable investments to investment-grade securities and limits our credit
exposure by limiting our concentration in any one corporate issuer or sector and by establishing a minimum credit
rating for marketable investments we purchase. Although we deposit cash and marketable investments with multiple
financial institutions, our deposits may exceed insurable limits.
No customer accounted for more than 10% of our revenue for the years ended December 31, 2021 and December
31, 2020. One customer accounted for 10% of our revenue for the year ended December 31, 2019.
Our accounts receivable are generally unsecured. We monitor our customers’ credit quality on an ongoing basis and
maintain reserves for estimated credit losses. Bad debt expense was not material for the years ended December 31,
2021, 2020 and 2019.
Recently Adopted Accounting Pronouncements
In October 2021, the Financial Accounting Standards Board issued ASU No. 2021-08, Business Combinations (Topic
805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an entity
to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance
with Topic 606, Revenue from Contracts with Customers. We elected to early adopt ASU 2021-08 prospectively as of
October 1, 2021, and the effects of adoption on our consolidated financial statements were not material.
75
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Cash, Cash Equivalents and Marketable Securities
Cash, cash equivalents and marketable securities consist of the following (in thousands):
Cash and cash equivalents:
Cash
Money market funds
Commercial paper
Corporate bonds
Total cash and cash equivalents
Marketable securities:
Corporate bonds
Commercial paper
U.S. treasury securities
Certificates of deposit
Municipal securities
Non-U.S. government and supranational bonds
U.S. agency bonds
December 31, 2021
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
$
589,156 $
— $
— $
589,156
711,188
114,972
4,310
1,419,626
450,746
247,623
189,325
82,504
49,470
41,812
1,000
—
4
—
4
—
—
—
—
711,188
114,976
4,310
1,419,630
181
(1,510)
15
19
19
11
3
—
(78)
(334)
(37)
(150)
(131)
—
449,417
247,560
189,010
82,486
49,331
41,684
1,000
Total marketable securities
1,062,480
248
(2,240)
1,060,488
Total
$
2,482,106 $
252 $
(2,240) $
2,480,118
Cash and cash equivalents:
Cash
Money market funds
Commercial paper
U.S. treasury securities
Certificates of deposit
Total cash and cash equivalents
Marketable securities:
Corporate bonds
U.S. treasury securities
Commercial paper
Certificates of deposit
Municipal securities
U.S. agency bonds
Non-U.S. government and supranational bonds
Asset-backed securities
December 31, 2020
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
$
352,061 $
— $
— $
352,061
225,643
48,530
39,997
2,996
669,227
452,723
202,795
234,170
134,828
17,604
16,012
15,938
14,752
—
2
1
—
3
1,782
260
86
57
22
6
13
61
—
—
—
—
—
(18)
(1)
(3)
(3)
(7)
—
(1)
—
225,643
48,532
39,998
2,996
669,230
454,487
203,054
234,253
134,882
17,619
16,018
15,950
14,813
Total marketable securities
1,088,822
2,287
(33)
1,091,076
Total
$
1,758,049 $
2,290 $
(33) $
1,760,306
Our allowance for credit losses for our marketable securities was not material as of December 31, 2021 and 2020.
76
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The fair value of our marketable securities by contractual maturity is as follows (in thousands):
Due in one year or less
Due after one to five years
Total
December 31, 2021
$
$
716,132
344,356
1,060,488
Net realized gains and losses from sales of available-for-sale securities were not material for any period presented.
3. 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):
Cash equivalents:
Money market funds
Commercial paper
Corporate bonds
Marketable securities:
Corporate bonds
Commercial paper
U.S. treasury securities
Certificates of deposit
Municipal securities
Non-U.S. government and supranational bonds
U.S. agency bonds
Prepaid expenses and other current assets:
Certificates of deposit
Restricted cash:
December 31, 2021
Level 1
Level 2
Level 3
Total
$
711,188 $
— $
— $
711,188
—
—
—
—
189,010
—
—
—
—
—
114,976
4,310
449,417
247,560
—
82,486
49,331
41,684
1,000
1,137
—
—
—
—
—
—
—
—
—
—
114,976
4,310
449,417
247,560
189,010
82,486
49,331
41,684
1,000
1,137
Certificates of deposit
$
— $
6,297 $
— $
6,297
77
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cash equivalents:
Money market funds
Commercial paper
U.S. treasury securities
Certificates of deposit
Marketable securities:
Corporate bonds
Commercial paper
U.S. treasury securities
Certificates of deposit
Municipal securities
U.S. agency bonds
Non-U.S. government and supranational bonds
Asset-backed securities
Prepaid expenses and other current assets:
Certificates of deposit
Restricted cash:
December 31, 2020
Level 1
Level 2
Level 3
Total
$
225,643 $
— $
— $
225,643
—
39,998
—
—
—
203,054
—
—
—
—
—
—
48,532
—
2,996
454,487
234,253
—
134,882
17,619
16,018
15,950
14,813
571
—
—
—
—
—
—
—
—
—
—
—
—
48,532
39,998
2,996
454,487
234,253
203,054
134,882
17,619
16,018
15,950
14,813
571
Certificates of deposit
$
— $
9,110 $
— $
9,110
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.
4. Other Balance Sheet Components
Property and Equipment, Net
Property and equipment, net consists of the following (in thousands):
Leasehold improvements
Furniture and fixtures
Computer and network equipment
Total property and equipment
Less: accumulated depreciation
Construction in progress
Property and equipment, net
December 31,
2021
2020
$
101,214 $
101,242
25,956
32,020
159,190
(108,159)
2,370
$
53,401 $
24,516
27,230
152,988
(83,770)
157
69,375
Depreciation expense was $26.2 million, $36.0 million and $26.3 million for the years ended December 31, 2021,
2020 and 2019, respectively.
78
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consists of the following (in thousands):
Accrued hosting expenses
Accrued compensation
Operating lease liabilities
Other accrued expenses
December 31,
2021
2020
$
84,105 $
37,154
41,693
79,179
39,233
33,215
43,633
39,259
Accrued expenses and other current liabilities
$
242,131 $
155,340
5. Acquisition
On December 3, 2021, we acquired all outstanding shares of BLBW Limited ("Vochi"), a video creation and editing
app that offers tools for creators. The acquisition of Vochi is expected to bring more video creation tools and quality
content to our Pinners and help us further our vision to create a place where Pinners can go from inspiration to
realization.
The total purchase consideration was $45.9 million in cash, including an indemnification holdback of $8.6 million. Of
the total purchase consideration, $14.8 million was attributed to developed technology and other related intangible
assets, which will be amortized over their useful lives of 5 years, and the remaining $33.3 million was attributed to
goodwill. Goodwill represents the synergies we expect to realize from the acquisition and the assembled workforce.
Goodwill is not deductible for tax purposes.
We included the results of Vochi's operations in our consolidated financial statements beginning on the acquisition
date. The acquisition did not have a material impact on our consolidated financial statements so we have not
presented historical and pro forma disclosures.
6. Goodwill and Intangible Assets, Net
Changes in goodwill for the periods presented are as follows (in thousands):
Balance as of December 31, 2020
Acquisitions
Balance as of December 31, 2021
$
$
6,905
33,303
40,208
79
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Intangible assets, net consists of the following (in thousands):
Acquired patents
Acquired technology and other intangibles
Total intangible assets, net
Acquired patents
Acquired technology and other intangibles
Total intangible assets, net
December 31, 2021
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
$
$
9,037 $
19,970
29,007 $
(3,389) $
(4,711)
(8,100) $
5,648
15,259
20,907
December 31, 2020
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
$
$
9,037 $
4,385
13,422 $
(2,380) $
(4,385)
(6,765) $
6,657
—
6,657
Weighted-
Average Useful
Life (1)
9.1 years
4.2 years
Weighted-
Average Useful
Life (1)
9.1 years
1.5 years
(1)
Based on the weighted-average useful life established as of acquisition date.
Amortization expense was $1.3 million, $1.0 million and $1.5 million for the years ended December 31, 2021, 2020
and 2019, respectively. Estimated future amortization expense as of December 31, 2021, is as follows (in thousands):
2022
2023
2024
2025
2026
Thereafter
Total
Intangible Asset
Amortization
$
4,126
4,126
4,126
4,116
3,424
989
$
20,907
7. Commitments and Contingencies
As of December 31, 2021, our non-cancelable contractual commitments are as follows (in thousands):
2022
2023
2024
2025
2026
Thereafter
Total
Purchase Commitments
Purchase
Commitments
Operating
Leases
Total
Commitments
$
— $
57,877 $
—
—
—
—
56,601
34,520
29,736
30,382
57,877
56,601
34,520
29,736
30,382
2,949,100
114,511
3,063,611
$
2,949,100 $
323,626 $
3,272,727
In April 2021, we entered into a new private pricing addendum with AWS, which governs our use of cloud computing
infrastructure provided by AWS. Under the new pricing addendum, we are required to purchase at least $3,250.0
million of cloud services from AWS through April 2029. If we fail to do so, we are required to pay the difference
between the amount we spend and the required commitment amount. As of December 31, 2021, our remaining
contractual commitment is $2,949.1 million. We expect to meet our remaining commitment.
80
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Legal Matters
We are involved in various lawsuits, claims and proceedings that arise in the ordinary course of business, including
those described below. While the results of legal matters are inherently uncertain, we do not believe there is a
reasonable possibility that 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.
On November 23, 2020, Pinterest and our Chief Executive Officer and Chief Financial Officer were named as
defendants in a putative securities class action filed in the U.S. District Court for the Northern District of California. The
lawsuit alleged claims under Sections 10(b) and 20(a) of the Exchange Act and alleged that defendants made material
false and misleading public statements about our revenue and user growth in 2019. The complaint sought damages,
litigation costs, and interest. On September 23, 2021, the court granted Pinterest’s motion to dismiss plaintiff’s
complaint with leave to amend and plaintiff notified the court on October 12, 2021 that they do not intend to file an
amended complaint. The court entered judgment on behalf of Pinterest and other defendants on October 12, 2021
and this matter is no longer pending.
In November and December 2020, certain of our executives and members of our board of directors were named as
defendants in shareholder derivative lawsuits filed in the U.S. District Court for the Northern District of California.
Pinterest was also named as a nominal defendant. The lawsuits purport to assert claims for breach of fiduciary duty in
connection with allegations of gender and racial discrimination at Pinterest. In addition, the lawsuits purport to assert
claims for waste, abuse of control, aiding and abetting breaches of fiduciary duties, unjust enrichment, and violations
of Section 14(a) of the Exchange Act. The complaints seek declaratory and injunctive relief, corporate governance
changes, monetary damages, interest, disgorgement, and fees and costs. On April 22, 2021, the defendants moved to
dismiss this complaint. On July 14, 2021, another shareholder derivative complaint with similar allegations was filed in
the same court and was subsequently related to the earlier action. The cases were referred to a magistrate judge for
mediation, and the proceedings were stayed during the pendency of that mediation. On November 24, 2021, the
parties entered into a stipulation of settlement and plaintiffs filed a motion for preliminary settlement approval. We
continue to evaluate these claims but do not believe this litigation will have a material impact on our financial position
or results of operations.
In March 2021, certain of our executives and members of our board of directors were named as defendants in a
shareholder derivative lawsuit filed in the Delaware Chancery Court. Pinterest was also named as a nominal
defendant. The complaint alleges that executives and members of the board breached their fiduciary duties to the
company in connection with allegations of gender and racial discrimination at Pinterest. On May 10, 2021, the court
stayed this lawsuit in light of the related pending case in the Northern District of California. The complaint seeks
damages, litigation costs, and interest. We continue to evaluate these claims but do not believe this litigation will have
a material impact on our financial position or results of operations.
Revolving Credit Facility
In November 2018, we entered into a five-year $500.0 million revolving credit facility with an accordion option which, if
exercised, would allow us to increase the aggregate commitments by the greater of $100.0 million and 10% of our
consolidated total assets, provided we are able to secure additional lender commitments and satisfy certain other
conditions. Interest on any borrowings under the revolving credit facility accrues at either LIBOR plus 1.50% or at an
alternative base rate plus 0.50%, at our election, and we are required to pay an annual commitment fee that accrues
at 0.15% per annum on the unused portion of the aggregate commitments under the revolving credit facility.
The revolving credit facility also allows us to issue letters of credit, which reduce the amount we can borrow. We are
required to pay a fee that accrues at 1.50% per annum on the average aggregate daily maximum amount available to
be drawn under any outstanding letters of credit.
The revolving credit facility contains customary conditions to borrowing, events of default and covenants, including
covenants that restrict our ability to incur indebtedness, grant liens, make distributions to holders of our stock or the
stock of our subsidiaries, make investments or engage in transactions with our affiliates. The revolving credit facility
also contains two financial maintenance covenants: a consolidated total assets covenant and a minimum liquidity
balance of $350.0 million, which includes any available borrowing capacity. The obligations under the revolving credit
facility are secured by liens on substantially all of our domestic assets, including certain domestic intellectual property
assets.
81
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Our total borrowing capacity under the revolving credit facility is $500.0 million as of December 31, 2021. We have not
issued any letters of credit against the revolving credit facility and are in compliance with all covenants under the
revolving credit facility as of December 31, 2021.
8. Leases
We have entered into various non-cancelable office space operating leases with original lease periods expiring
between 2022 and 2033. These do not contain material variable rent payments, residual value guarantees, covenants
or other restrictions. Operating lease costs for the years ended December 31, 2021, 2020 and 2019, are as follows (in
thousands):
Lease cost:
Operating lease cost
Short-term lease cost
Total
Year Ended December 31,
2021
2020
2019
$
$
53,691 $
51,285 $
1,434
3,933
55,125 $
55,218 $
40,257
3,456
43,713
The weighted-average remaining term of our operating leases was 7.5 years and 8.1 years, and the weighted-
average discount rate used to measure the present value of our operating lease liabilities was 4.2% and 4.8% as of
December 31, 2021 and 2020, respectively.
Maturities of our operating lease liabilities, which do not include short-term leases, as of December 31, 2021, are as
follows (in thousands):
2022
2023
2024
2025
2026
Thereafter
Total lease payments
Less imputed interest
Total operating lease liabilities
Operating
Leases
57,393
56,601
34,520
29,736
30,382
114,511
323,143
(72,269)
250,874
$
$
Cash payments included in the measurement of our operating lease liabilities were $59.0 million, $54.3 million and
$38.4 million for the years ended December 31, 2021, 2020 and 2019, respectively.
As of December 31, 2021, we have $20.8 million of undiscounted future payments under operating leases that have
not yet commenced, which are excluded from the table above.
9. 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
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 December 31, 2021.
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
82
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
less than 100% of the fair market value of our common stock on the date of grant. 126,949,622 shares of our Class A
common stock were reserved for future issuance under our 2019 Plan as of December 31, 2021.
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 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 through 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 year ended December 31, 2021, was as follows (in thousands, except per share
amounts):
Stock Options Outstanding
Shares
Weighted-
Average
Exercise Price
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value (1)
Outstanding as of December 31, 2020
Exercised
Outstanding as of December 31, 2021
Exercisable as of December 31, 2021
23,947 $
(7,806)
16,141 $
15,576 $
3.15
3.06
3.19
2.50
2.9 $
1,502,604
1.9 $
1.7 $
535,118
527,204
(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 years ended December 31, 2021, 2020 and 2019,
was $3.2 million, $3.3 million and $2.2 million, respectively. The aggregate intrinsic value of stock options exercised
during the years ended December 31, 2021, 2020 and 2019, was $511.4 million, $1,023.9 million and $425.1 million,
respectively.
No stock options were granted during the years ended December 31, 2021 and December 31, 2019. The total grant-
date fair value of stock options granted during the year ended December 31, 2020 was not material.
Restricted Stock Unit and Restricted Stock Award Activity
RSU and RSA activity during the year ended December 31, 2021, was as follows (in thousands, except per share
amounts):
Outstanding as of December 31, 2020
Granted(1)
Released
Forfeited(1)
Outstanding as of December 31, 2021
(1)
Includes the effects of awards modified during the year ended December 31, 2021.
83
Restricted Stock Units and Restricted
Stock Awards Outstanding
Shares
Weighted
Average Grant
Date Fair Value
54,079 $
9,931
(21,991)
(5,761)
36,258 $
20.45
67.27
23.28
25.02
30.84
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Share-Based Compensation
Share-based compensation expense during the years ended December 31, 2021, 2020 and 2019, was as follows (in
thousands):
Cost of revenue
Research and development
Sales and marketing
General and administrative
Year Ended December 31,
2021
2020
2019
$
7,438 $
7,865 $
309,715
52,691
45,538
218,718
35,645
58,792
31,758
867,191
239,315
239,517
Total share-based compensation
$
415,382 $
321,020 $
1,377,781
As of December 31, 2021, we had $851.2 million of unrecognized share-based compensation expense, which we
expect to recognize over a weighted-average period of 2.7 years.
On October 15, 2021, our Co-founder and Chief Design and Creative Officer transitioned into a consulting role
pursuant to a consulting agreement dated October 13, 2021. He will also continue to serve on our Board of Directors,
and his existing RSU award will continue vesting after the transition to the consulting role. For accounting purposes,
we treated this as a modification of his RSU award and recorded a one-time charge of $48.6 million, including
incremental compensation cost of $40.8 million, in share-based compensation expense for the year ended December
31, 2021.
10. Net Income (Loss) Per Share Attributable to Common Stockholders
We present net income (loss) per share attributable to common stockholders using the two-class method required for
multiple classes of common stock. 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 income or 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 income (loss) per share attributable to common stockholders by dividing net income (loss)
attributable to common stockholders by the weighted-average number of shares of common stock outstanding during
the period.
Diluted net income (loss) per share 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 and RSUs to the extent these are dilutive. The calculation of diluted net income (loss)
of Class A common stock assumes the conversion of our Class B common stock to Class A common stock, while the
diluted net income (loss) of Class B common stock does not assume the conversion of those shares to Class A
common stock.
84
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We calculated basic and diluted net income (loss) per share attributable to common stockholders as follows (in
thousands, except per share amounts):
Year Ended December 31,
2021
2020
2019
Class A
Class B
Class A
Class B
Class A
Class B
Basic net income (loss) per share attributable to
common stockholders:
Numerator:
Net income (loss) attributable to common
stockholders
Denominator:
Weighted-average shares used in computing
net income (loss) per share attributable to
common stockholders, basic
Basic net income (loss) per share attributable to
common stockholders
Diluted net income (loss) per share attributable to
common stockholders:
Numerator:
Net income (loss) attributable to common
stockholders
Reallocation of net income as a result of
conversion of Class B to Class A common
stock
Reallocation of net income to Class B
common stock
Diluted net income (loss) attributable to
common stockholders
Denominator:
Weighted-average shares used in computing
net income (loss) per share
Conversion of Class B to Class A common
stock
Weighted average effect of dilutive potential
common stock
Weighted-average shares used in computing
net income (loss) per share attributable to
common stockholders, diluted
$ 274,699 $ 41,739 $ (96,499) $ (31,824) $ (459,412) $ (901,959)
555,608
84,422
448,392
147,872
141,894
278,579
$
0.49 $
0.49 $
(0.22) $
(0.22) $
(3.24) $
(3.24)
$ 274,699 $ 41,739 $ (96,499) $ (31,824) $ (459,412) $ (901,959)
41,739
—
—
(3,115)
—
—
—
—
—
—
—
—
$ 316,438 $ 38,624 $ (96,499) $ (31,824) $ (459,412) $ (901,959)
555,608
84,422
448,392
147,872
141,894
278,579
84,422
51,621
—
—
—
—
—
—
—
—
—
—
691,651
84,422
448,392
147,872
141,894
278,579
Diluted net income (loss) per share attributable to
common stockholders
$
0.46 $
0.46 $
(0.22) $
(0.22) $
(3.24) $
(3.24)
Basic net loss per share is the same as diluted net loss per share for the periods we reported net losses. We excluded
the following weighted-average potential shares of common stock from our calculation of diluted net income (loss) per
share attributable to common stockholders because these would be anti-dilutive (in thousands):
Redeemable convertible preferred stock
Outstanding stock options
Unvested restricted stock units and restricted stock awards
Redeemable convertible preferred stock warrants
Total
Year Ended December 31,
2021
2020
2019
—
—
3,271
—
3,271
—
40,067
63,603
—
95,469
72,999
69,800
77
103,670
238,345
85
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. Income Taxes
The components of income (loss) before provision for income taxes are as follows (in thousands):
United States
Foreign
Income (loss) before provision for income taxes
Year Ended December 31,
2021
2020
2019
$
$
331,447 $
49,973 $
(1,266,677)
(10,476)
(176,993)
(94,162)
320,971 $
(127,020) $
(1,360,839)
Provision for income taxes consists of the following (in thousands):
Year Ended December 31,
2021
2020
2019
Current:
Federal
State
Foreign
Total current tax expense
Deferred:
Federal
State
Foreign
Total deferred tax expense (benefit)
$
— $
— $
2,303
2,957
5,260
6
6
(739)
(727)
79
691
770
654
5
(126)
533
Provision for income taxes
$
4,533 $
1,303 $
—
—
1,677
1,677
(555)
(76)
(514)
(1,145)
532
The difference between income taxes computed at the statutory federal income tax rate and the provision for income
taxes is attributable to the following (in thousands):
Tax at U.S. statutory rate
State income taxes, net of benefit
Foreign losses not benefited
Permanent book/tax differences
Legal settlement
Share-based compensation
Change in valuation allowance
Tax credits
Other
Provision for income taxes
Year Ended December 31,
2021
2020
2019
$
67,404 $
(26,674) $
(285,776)
2,307
4,448
954
—
84
37,716
1,051
2,290
(269,009)
(303,245)
278,761
352,410
(79,787)
(63,205)
$
(545)
4,533 $
876
1,303 $
(77)
20,932
2,453
—
(84,366)
422,315
(74,399)
(550)
532
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.
86
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Significant components of our deferred tax assets and liabilities are as follows (in thousands):
Deferred tax assets:
Net operating loss carryforwards
Research tax credits
Reserves, accruals, and other
Lease obligation
Share-based compensation
Total deferred tax assets
Less: valuation allowance
Deferred tax assets, net of valuation allowance
Deferred tax liabilities:
Depreciation and amortization
Prepaid expenses
Total deferred tax liabilities
Deferred tax assets (liabilities)
December 31,
2021
2020
$
1,036,254 $
401,219
29,641
58,860
63,798
784,721
269,658
18,106
44,446
96,932
1,589,772
1,213,863
(1,539,889)
(1,176,910)
49,883
36,953
(47,952)
(2,036)
(49,988)
$
(105) $
(34,576)
(1,523)
(36,099)
854
Due to our history of losses we believe it is more likely than not that our U.S. and Irish deferred tax assets will not be
realized as of December 31, 2021. Accordingly, we have established a full valuation allowance on our U.S. and Irish
deferred tax assets. Our valuation allowance increased by $363.0 million and $439.9 million during the years ended
December 31, 2021 and 2020, respectively, primarily due to U.S. federal and state tax losses and credits incurred
during the period.
As of December 31, 2021, we had federal, California and other state net operating loss carryforwards of $4,314.0
million, $500.8 million and $1,677.0 million, respectively. If not utilized, these will begin to expire in 2028, 2028 and
2026, respectively. Utilization of our net operating loss carryforwards may be subject to annual limitations due to the
ownership change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. Our
net operating loss carryforwards could expire before utilization if subject to annual limitations. As of December 31,
2021, we had $51.9 million and $2.0 million of Irish and Other Foreign net operating loss carryforwards, respectively
that can be carried forward indefinitely.
As of December 31, 2021, we had federal and California research and development credit carryforwards of $355.6
million and $275.4 million, respectively. If not utilized, our federal carryforwards will begin to expire in 2030. Our
California carryforwards do not expire.
Changes in gross unrecognized tax benefits were as follows (in thousands):
Balance as of December 31, 2019
Increases for tax positions of prior years
Decreases for tax positions of prior years
Increases for tax positions of current year
Balance as of December 31, 2020
Increases for tax positions of prior years
Increases for tax positions of current year
Balance as of December 31, 2021
Gross Unrecognized
Tax Benefits
$
$
$
129,185
886
(37,250)
47,339
140,160
2,906
61,993
205,059
Recognizing the $205.1 million of gross unrecognized tax benefits we had as of December 31, 2021 would affect our
effective tax rate by $2.6 million. The remaining $202.5 million of gross unrecognized tax benefits would be offset by
87
PINTEREST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the reversal of related deferred tax assets, which are subject to a full valuation allowance. We do not expect our gross
unrecognized tax benefits to change significantly within the next 12 months. We recognize interest and penalties
related to uncertain tax positions in provision for income taxes. Accrued interest and penalties are not material as of
December 31, 2021 and 2020.
We are subject to taxation in the U.S. and various other state and foreign jurisdictions. As we have net operating loss
carryforwards for U.S. federal and state jurisdictions, the statute of limitations is open for all tax years. For material
foreign jurisdictions, the tax years open to examination include the years 2016 and forward. We are currently under
examination of our U.S. consolidated federal income tax return by the Internal Revenue Service for calendar years
2018 and 2019. We believe that we have adequately reserved for any adjustments to the provision for income taxes
or other tax items that may ultimately result from these examinations.
We have not recognized deferred taxes for the difference between the financial reporting basis and the tax basis of
our investment in our foreign subsidiaries because we have the ability and intent to maintain our investments for the
foreseeable future. If we were to remit earnings as of December 31, 2021, the residual taxes would not be material.
12. Geographical Information
Revenue disaggregated by geography based on our customers’ billing addresses is as follows (in thousands):
United States
International(1)
Total revenue
Year Ended December 31,
2021
2020
2019
$
$
2,003,642 $
1,404,282 $
1,010,186
574,385
288,376
132,575
2,578,027 $
1,692,658 $
1,142,761
(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):
United States
International(1)
Total property and equipment, net and operating lease right-of-use assets
December 31,
2021
2020
$
$
247,975 $
33,338
281,313 $
213,831
11,460
225,291
(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.
88
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer ("CEO") and chief financial officer ("CFO"), has
evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended ("Exchange Act"), as of the end of the period covered by this
Annual Report on Form 10-K. Based on such evaluation, our CEO and CFO have concluded that as of December 31,
2021, our disclosure controls and procedures are effective to provide reasonable assurance that information we are
required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in the rules and forms of the Securities and Exchange Commission ("SEC"),
and that such information is accumulated and communicated to our management, including our CEO and CFO, as
appropriate, to allow timely decisions regarding required disclosure.
Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as
defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of
our internal control over financial reporting based on the criteria set forth in Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on the
assessment, management has concluded that its internal control over financial reporting was effective as of
December 31, 2021 to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements in accordance with U.S. GAAP. Our independent registered public accounting firm, Ernst &
Young LLP, has issued an audit report with respect to our internal control over financial reporting, which appears in
Part II, Item 8 of this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d)
under the Exchange Act) during the period covered by this Annual Report on Form 10-K that has materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting. Further, while the majority of our
employees are working remotely, we have not experienced any material impact in our internal control over financial
reporting as a result of the COVID-19 pandemic. We continue to monitor for and assess any effects the COVID-19
pandemic may have on the design or operating effectiveness of our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures and internal control over financial reporting,
management recognizes that any controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls
and procedures and internal control over financial reporting must reflect the fact that there are resource constraints
and that management is required to apply judgment in evaluating the benefits of possible controls and procedures
relative to their costs.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
89
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated by reference to the sections titled “Proposal 1 - Election of
Directors” and “Other Matters” that will be included in our Definitive Proxy Statement for the 2022 Annual Meeting of
Stockholders to be filed with the Securities and Exchange Commission (SEC) within 120 days of December 31, 2021
(the "2022 Proxy Statement).
Item 11. Executive Compensation
The information required by this item is incorporated by reference to the section titled “Proposal 3 – Advisory Non-
Binding Vote on our Named Executive Officers' Compensation” that will be included in our 2022 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated by reference to the section titled “Other Matters” that will be
included in our 2022 Proxy Statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference to the sections titled “Proposal 1 – Election of
Directors” and “Other Matters” that will be included in our 2022 Proxy Statement.
Item 14. Principal Accountant Fees and Services
The information required by this item is incorporated by reference to the sections titled “Proposal 2 – Ratification of
Selection of Independent Auditor” that will be included in our 2022 Proxy Statement.
90
PART IV
Item 15. Exhibits and Financial Statement Schedules
The following documents are filed as part of this Annual Report on Form 10-K:
1. Consolidated Financial Statements
The consolidated financial statements are filed as part of this Annual Report on Form 10-K under “Item 8.
Financial Statements and Supplementary Data.”
2. Financial Statement Schedules
The financial statement schedules are omitted because they are either not applicable or the information
required is presented in the financial statements and notes thereto under “Item 8. Financial Statements and
Supplementary Data.”
3. Exhibits
The exhibits listed in the following Exhibit Index are filed, furnished, or incorporated by reference as part of
this Annual Report on Form 10-K.
Exhibit
Number
Exhibit Description
Amended and Restated Certificate of Incorporation of the
Company.
Amended and Restated Bylaws of the Company.
Certificate of Change of Registered Agent
Amended and Restated Investor Rights Agreement among
the Company and certain holders of its capital stock, dated
as of June 2, 2017.
Incorporated by Reference
Form
File No.
Exhibit
Filing Date
8-K
8-K
8-K
001-38872
001-38872
001-38872
3.2
3.2
3.1
April 23, 2019
December 15, 2021
December 15, 2021
S-1
333-230458
4.2
March 22, 2019
Description of our Common Stock.
10-K
001-38872
4.2
February 7, 2020
Form of Indenture.
Form of Indemnification Agreement between the Company
and each of its directors and executive officers.
Form of Executive Severance & Change in Control
Agreement (CEO).
Form of Amended and Restated Executive Severance &
Change in Control Agreement (Non-CEO).
Revolving Credit Agreement, by and among the Company,
the Guarantors and JP Morgan Chase Bank, N.A., as
administrative agent, dated as of November 15, 2018.
Employment Agreement by and between Cold Brew Labs
Inc. and Benjamin Silbermann, dated as of July 14, 2009.
Confidential Information and Invention Assignment
Agreement by and between Cold Brew Labs Inc. and
Benjamin Silbermann, dated as of October 28, 2008.
Offer Letter and Confidential Agreement and Invention
Assignment Agreement by and between the Company and
Todd Morgenfeld, dated as of September 19, 2016.
S-1/A
333-230458
10.1
April 8, 2019
S-1/A
333-230458
10.14
April 8, 2019
S-1
333-230458
10.2
March 22, 2019
S-1/A
333-230458
10.3
March 29, 2019
S-1/A
333-230458
10.4
March 29, 2019
S-1/A
333-230458
10.5
March 29, 2019
10.8+
Pinterest, Inc. 2009 Stock Plan, as amended.
S-1
333-230458
10.7
March 22, 2019
10.9+
Pinterest, Inc. 2009 Stock Plan Notice of Stock Option
Grant and Stock Option Agreement by and between the
Company and Benjamin Silbermann, dated as of April 25,
2013.
S-1
333-230458
10.8
March 22, 2019
91
3.1
3.2
3.3
4.1
4.2
4.3
10.1
10.2+
10.3+
10.4
10.5+
10.6+
10.7+
10.10+
Form of Pinterest, Inc. 2009 Stock Plan Restricted Stock
Unit Grant Notice and Restricted Stock Unit Agreement
S-1
333-230458
10.9
March 22, 2019
Acceleration Addendum to Pinterest, Inc. 2009 Stock Plan
Restricted Stock Unit Grant Notice and Agreement by and
between the Company and Todd Morgenfeld, dated as of
December 20, 2017.
S-1
333-230458
10.10
March 22, 2019
Pinterest, Inc. 2019 Omnibus Incentive Plan.
S-1/A
333-230458
10.11
March 29, 2019
S-1/A
333-230458
10.12
April 8, 2019
10-K
001-38872
10.14
February 7, 2020
10-K
10-Q
001-38872
10.15
February 7, 2020
001-38872
10.1
April 28, 2021
S-8
333-230999
4.3
April 23, 2019
10-Q
001-38872
10.2
April 28, 2021
10-Q
001-38872
10.3
April 28, 2021
10-Q
001-38872
10.2
November 4, 2021
10.11+
10.12+
10.13+
10.14+
10.15+
Form of Pinterest, Inc. 2019 Omnibus Incentive Plan
Restricted Stock Unit Grant Notice and Agreement.
Form of Pinterest, Inc. 2019 Omnibus Incentive Plan
Restricted Stock Grant Notice and Agreement.
Form of Pinterest, Inc. 2019 Omnibus Incentive Plan Stock
Option Grant Notice and Agreement.
10.16+
Non-Employee Director Compensation Policy.
10.17+
10.18+
10.19+
10.20+
21.1
23.1
24.1
31.1
31.2
32.1
Pinterest, Inc. 2009 Stock Plan Notice of Stock Option Grant
and Stock Option Agreement.
Employment Agreement between Pinterest, Inc. and
Christine Flores dated as of February 27, 2017
Employment Agreement between Cold Brew Labs Inc. and
Evan Sharp dated as of May 13, 2011
Consulting Agreement dated October 13th, 2021 and
effective October 15, 2021, Evan Sharp
List of Subsidiaries of Pinterest, Inc.
Consent of Ernst & Young LLP, Independent Registered
Public Accounting Firm.
Power of Attorney.
Certification of Principal Executive Officer pursuant to
Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Principal Financial Officer pursuant to
Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(a) and 15d-14(a),
Certifications of Principal Executive Officer and Principal
Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
Inline XBRL Instance Document (the instance document
does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL document)
101.INS
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL
101.DEF
Inline XBRL Taxonomy Extension Calculation Linkbase
Document
Inline XBRL Taxonomy Extension Definition Linkbase
Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase
Document
104
Cover Page Interactive Data File (formatted as Inline XBRL
and contained in Exhibit 101)
+ Indicates a management contract or compensatory plan
Item 16. Form 10-K Summary
None.
92
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized.
SIGNATURES
Date: February 3, 2022
PINTEREST, INC.
By:
/s/ Todd Morgenfeld
Todd Morgenfeld
Chief Financial Officer and Head of Business Operations
(Principal Financial Officer and Principal Accounting Officer)
93
POWER OF ATTORNEY
The undersigned directors and officers of Pinterest, Inc. hereby constitute and appoint Benjamin Silbermann,
Todd Morgenfeld and Christine Flores, and each of them, any of whom may act without joinder of the other, the
individual’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for the
person and in his or her name, place and stead, in any and all capacities, to sign any or all amendments to this
Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and all other documents in connection
therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been
signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Name
Title
Date
/s/ Benjamin Silbermann
Benjamin Silbermann
Chairman, Co-Founder, President and Chief Executive Officer
(Principal Executive Officer)
February 3, 2022
/s/ Jeffrey Jordan
Jeffrey Jordan
Director
/s/ Leslie J. Kilgore
Director
Leslie J. Kilgore
/s/ Jeremy S. Levine
Director
Jeremy S. Levine
/s/ Evan Sharp
Evan Sharp
Director
/s/ Fredric G. Reynolds
Director
Fredric G. Reynolds
/s/ Gokul Rajaram
Director
Gokul Rajaram
/s/ Andrea Wishom
Director
Andrea Wishom
/s/ Salaam Coleman Smith
Director
Salaam Coleman Smith
February 3, 2022
February 3, 2022
February 3, 2022
February 3, 2022
February 3, 2022
February 3, 2022
February 3, 2022
February 3, 2022
/s/ Todd Morgenfeld
Chief Financial Officer and Head of Business Operations
February 3, 2022
Todd Morgenfeld
(Principal Financial Officer and Principal Accounting Officer)
94
BR72352L-0322-COMBO