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What changed in PINTEREST, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of PINTEREST, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+285 added−276 removedSource: 10-K (2024-02-08) vs 10-K (2023-02-06)

Top changes in PINTEREST, INC.'s 2023 10-K

285 paragraphs added · 276 removed · 217 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe enable our advertisers to meet their awareness, consideration and conversion objectives with a number of first-party tools to measure campaign effectiveness. We also have leading third-party measurement partners to validate Pinterest’s performance and measure advertiser results.
Biggest changeWe also have tools to help advertisers understand our contribution and drivers to conversion, and incremental impact. Advertisers can leverage our leading third-party measurement partners to validate Pinterest’s performance individually and across channels. Additionally, our API is integrated with other third -party partners to help increase adoption of our measurement tools.
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.
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 equal opportunities for development.
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”), including the California Privacy Rights Act (“CPRA”) and other state laws that may take effect in 2023.
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”), including the California Privacy Rights Act (“CPRA”) and other state laws that may take effect in 2024.
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, user intent and creative quality.
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.
To promote emotional wellbeing, we offer free access to mental health and wellbeing tools like Lyra, Ginger, Calm and Cleo. 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.
To promote emotional wellbeing, we offer free access to mental health and wellbeing tools like Lyra, Ginger, Calm and Cleo. 12 Part I 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.
Amongst other initiatives and avenues for raising concerns, we have 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.
Amongst other initiatives and avenues for raising concerns, we have a third-party 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.
Our principal executive offices are located at 505 Brannan Street, San Francisco, California 94107, and our telephone number is (415) 762-7100.
Our principal executive offices are located at 651 Brannan Street, San Francisco, California 94107, and our telephone number is (415) 762-7100.
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.
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 we believe helps 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 eleven directors is composed of eight independent directors. Our board as well as our leadership team is diverse in terms of gender, race, skills, expertise and experience. We have published a diversity report since 2015 which we make publicly available on our website.
Our board of directors includes directors from various backgrounds, industries, skills and experience. Our board of twelve directors is composed of nine independent directors. Our board as well as our leadership team is diverse in terms of gender, race, skills, expertise and experience. We have published a diversity report annually since 2015 which we make publicly available on our website.
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.
We are also dependent on third-party content, technology and intellectual property in connection with our business. We are presently involved in litigation related to our intellectual property, 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.
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, 2022, we had 3,987 full-time employees.
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, 2023, we had 4,014 full-time employees.
As of December 31, 2022, we had over 380 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 600 registered trademarks and trademark applications in the United States and foreign countries, including our “Pinterest” name and related logos.
As of December 31, 2023, we had over 400 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 660 registered trademarks and trademark applications in the United States and foreign countries, including our “Pinterest” name and related logos.
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 example, access to our service has been 11 Part I or is currently restricted in whole or in part in in certain countries. 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.
Marketing We have historically been able to mainly 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.
Marketing We have historically grown 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.
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 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.
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 data, increases requirements for security and confidentiality and provides for significant penalties for non-compliance.
In addition, various countries around the world have adopted and pending legislations, including the implementation of the EU Directive on Copyright in the Digital Single Market ("EU Copyright Directive") in EU Member States which may impose additional obligations or liability on us associated with content uploaded by users to our platform.
In addition, pending legislations, including the implementation of the EU Directive on Copyright in the Digital Single Market ("EU Copyright Directive") in EU Member States have and 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.
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 11 Part I existing laws and regulations, may require us to modify our data processing practices and policies and to incur substantial costs in order to comply.
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.
We compete to attract, engage and retain users and their time and attention. We also compete with other platforms to attract, retain and grow our base of creators and publishers. We also compete for advertisers and advertising revenue across a variety of formats and goals, which depends on our ability to deliver compelling returns on investment.
We also compete for advertisers and advertising revenue across a variety of formats and goals, which depends on our ability to deliver compelling returns on investment.
Our ad auction allows us to serve ads to users at relevant moments while optimizing business outcomes for advertisers.
Ad Auction The vast majority of our advertisers buy ads through an auction-based system. Our ad auction allows us to serve ads to users at relevant moments while optimizing business outcomes for advertisers. We offer ads across both upper and lower funnel.
Additionally, they can choose whether they want ads to show in users’ search surfaces, Home Feed or both. Measurement Measuring the effectiveness of digital spend is a high priority for our advertisers. Our measurement solutions are designed to help advertisers recognize the value of an investment on our platform across a variety of objectives.
Measurement Measuring the effectiveness of digital ad spend is a high priority for our advertisers. Our first-party measurement solutions leverage tools like APIs and clean rooms which are designed to help advertisers recognize the value of an investment on our platform across a variety of objectives.
Sales and marketing Our go-to-market approach The Pinterest platform enables a diverse group of advertisers to achieve a wide range of objectives, from building awareness to supporting consideration to driving purchases. We serve these advertisers in customized ways depending on their size, sophistication and objectives across the full funnel.
Sales and Marketing Our go-to-market approach The Pinterest platform enables a diverse group of advertisers to achieve a wide range of objectives, from building awareness to driving consideration and delivering conversions. We have advertisers across multiple verticals including retail, consumer packaged goods, travel, financial services, and auto.
We began reopening our offices in a phased manner following local government regulations and with proper 12 Part I additional safety measures for employees. We also announced our flexible work model that provides employees the autonomy to live and work flexibly in the locations we have offices in, while prioritizing intentional in-person collaboration at our offices.
We also announced our flexible work model that provides employees the autonomy to live and work flexibly in the locations we have offices in, while prioritizing intentional in-person collaboration at our offices. We provide robust compensation and benefits programs to help meet the needs of our employees.
We also use paid marketing campaigns, including brand marketing for awareness and comprehension, as well as performance 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.
We also use paid marketing to grow and retain our user base, build brand awareness, and attract advertisers through business marketing and scaled education tools for optimizing campaigns on our platform. Our technology innovation We believe we have one of the largest image-rich data sets ever assembled.
We compete with companies that are larger and more established such as Amazon, Meta (including Facebook and Instagram), Google (including YouTube), Snap, TikTok and Twitter. Many of these companies have significantly greater financial and human resources.
Many are larger and have significantly greater financial and human resources such as Amazon, Meta (including Facebook and Instagram), Google (including YouTube), Snap, TikTok and X (formerly known as Twitter), that offer users engaging content and commerce opportunities through similar technology or products to ours. We remain focused on emerging competition as well.
Relevant ads can provide our users with useful and actionable content, and gives advertisers the opportunity to authentically engage with consumers. We also believe that many in-market consumers on Pinterest tend to be early in their purchase cycle and may not yet know what they want to purchase.
We believe that in-market consumers on Pinterest tend to be early in their journey toward a purchase decision and do not yet know exactly what they want to purchase.
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 aim to continue innovating on our industry- leading work across AI to deepen our foothold in visual search and discovery. Our competition We primarily compete with consumer internet companies that are either tools (search, ecommerce) or media (newsfeeds, video, social networks), particularly ones focused on advertising.
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Item 1. Business Overview Our mission is to bring everyone the inspiration to create a life they love.
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Item 1. Business Overview Pinterest is a visual search and discovery platform, positioned at the intersection of search, social, and commerce. We offer a unique and differentiated experience that enables people to go from inspiration to action all on one consumer internet property. Our primary service, Pinterest, can be accessed through our mobile application or the web.
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Pinterest is where 450 million people around the world come each month to discover and visualize 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.
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People use Pinterest to find useful, relevant ideas—and then bring them to life. People don’t always have the words to describe what they’re looking for, but often know it when they see it. As they browse Pinterest content (called “Pins”), they fine-tune their tastes and find the perfect idea.
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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 convey with words. On Pinterest, people discover inspiring and personalized visual content, which we call Pins.
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Users interact with the platform in dynamic multi-session journeys to find inspiration, curate their latest look, plan their next project and shop from great brands. This happens at a massive scale, with billions of searches and saves per month. All of this allows us to use intent-based signals to show relevant and engaging content to our users.
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Pins are created when users, creators, publishers and businesses save or publish images and videos to Pinterest. Pins are saved and organized into collections, which we call boards and sections. When people use Pinterest, they interact with several surfaces, each of which offer distinct functionalities and experiences.
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This inspiration-to-action journey maps clearly to the advertiser marketing funnel and helps brands to reach customers at every point in their discovery-to-purchase journey through digital ads. We believe users and advertisers intentionally choose Pinterest because of our efforts to create a positive and more brand safe environment.
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Users can discover relevant and personalized Pins, boards, creators and brands on our Home Feed, as well as by typing a query in the search bar. Users also visually search within images by selecting specific objects inside an inspiring scene e.g., a pair of shoes in a street fashion scene.
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As a result, we make deliberate decisions through our policies and product development and aim to deliver on that experience, creating value for advertisers who can showcase their product and services in an inspiring and positive environment.
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Additionally, users can search what they see in the world around them by using the Pinterest Lens camera feature to upload images to our platform - for example, taking a picture of a lighting fixture. Subsequently, users are shown Pins that are visually similar to the specific object and that may be shoppable.
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Our Users and Our Platform 498 million monthly active users from around the world come to Pinterest to find new ideas, curate and refine their tastes, and turn those ideas into reality. Our platform particularly resonates with women, who comprise roughly two-thirds of our total user base.
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This experience is powered by computer vision (that can identify objects and attributes within scenes) as well as by our catalog of shoppable inventory. Pinterest also offers organizing and planning tools so users can also curate the content they see on Pinterest.
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In addition, our platform also resonates with the younger generation, as Gen Z users represent over 40% of our user base. Geographically, we have a diverse user set, representing over 100 countries globally. Content on Pinterest comes from a variety of sources, including retailers, brands, creators, publishers and users.
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Using boards and features like sections, users can save Pins so they can easily get back to them later. Saving to boards is not only useful to a user in a planning mindset, but it brings us a depth of understanding of our user tastes and preferences that powers our organic recommendations and advertising engine.
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We acquire that content via a wide range of methods including product catalog uploads, direct publishing, and user curation. Content formats include images that allow you to click into an idea to learn more, videos that provide the steps of an idea, and products that brands and merchants upload from catalogs.
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We help users take action by connecting them to shoppable products or linking to blogs and other sites that enable them to fulfill their vision. Whether users are browsing, searching or saving ideas, there are multiple ways they can discover shoppable product Pins, which display information like price, color and size.
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On Pinterest, users interact with several surfaces, each of which offers distinct functionalities and experiences. Users often move between these surfaces various times in a single session, and across multiple sessions.
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Additionally, product Pins click through directly to a retailer's website, resulting in traffic to merchants or advertisers. Pinterest is unique because, through our policies and product development, we've designed it to be an inspiring platform that promotes positivity and emotional well-being.
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Saving content and creating boards are highly unique and beneficial to our ecosystem, as we utilize the signals from the curation to help serve users even more relevant content recommendations.
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These efforts also create unique value for businesses and advertisers who use our platform since they connect to users in a more inspiring, positive environment throughout the consumer journey. Our advertising products Pinterest reaches 450 million monthly active users.
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Home Feed: When users 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.
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We believe the value of Pinterest’s audience to advertisers is driven not only by the number of users on our platform or their demographics, but also by how they use Pinterest. By facilitating the consumer journey from inspiration to action, Pinterest offers a full-funnel marketing solution, creating value for businesses seeking new audiences and sales.
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As users interact with more content - through searching, saving, and curating - their Home Feed is designed to become even more representative of their interests. Search Page: On the Search surface, users find Pins they are looking for by typing a query in the search bar.
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Users come to Pinterest to be inspired – to gain inspiration for things like home decor, style or travel. This means that users come to the Pinterest platform with commercial intent, and they are often actively looking for products or services.
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The search functionality allows users to see many relevant possibilities that are personalized for their individual taste and interests. Users often come to Pinterest with a vague idea of what they’re looking for, and use our visual search functionality to narrow their focus. As such, over 90% of our searches are unbranded.
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Accordingly, we believe that consumers are open to engaging with, and learning about, brands and products with which they have less awareness. 8 Part I Our full funnel advertising solution maps to the consumer buying journey on Pinterest, from building awareness and comprehension at the top of the funnel, to supporting consideration and engagement with brands in the middle of the funnel, to driving purchases at the bottom of the funnel.
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Related Pins: Visual discovery on Pinterest also happens when a user taps on a Pin 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 users springboard off a point of inspiration to explore deeper into an interest or narrow in on the perfect product.
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We help advertisers engage with consumers across a variety of verticals, with a range of consideration cycles which can be as short as the purchase of a health and beauty product to as long as planning a wedding or remodeling project. Advertisers can also use multiple ad objectives in combination to amplify the impact of their investments on the platform.
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Our related pins surface is powered by our recommendation models that use computer vision designed to identify products in the Pin, and show other relevant organic or ads content that the user might find valuable to their inspiration to action journey. 8 Part I Boards: Users save and organize Pins onto virtual “boards.” Boards often are labeled with topical categories like “Hawaiian vacation,” ”spring outfits” or “living room furniture,” and are a collection of Pins that help users organize the vast amount of visual content that they interact with on the platform.
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Our pricing is based on campaign objectives, and advertisers measure the effectiveness of their campaigns using first and third party measurement solutions depending on their goals. Building awareness Our upper-funnel advertising solutions are typically utilized by advertisers looking to build their brand and drive awareness through views and impressions.
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How we monetize the inspiration to action journey: Our Flywheel Our users often come to the platform to get inspiration for many of life’s moments, which can lead to discovering new products and brands. As a result, commercial content from brands, retailers and advertisers is central to Pinterest.
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Ads appear in all major surfaces, including the Home Feed, related Pins and on search. They mirror the visual style of organic Pins and are fully integrated into the design. Advertisers can leverage image and video (long and short form) ads in support of awareness objectives to capture users’ attention with sight, sound, motion and rich visual storytelling.
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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.
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Supporting consideration Our mid-funnel performance advertising solutions support consideration objectives, typically measured by clicks. When a user clicks on an ad, she will either be taken directly to the product listing or directly to the product listing page on the advertisers website.
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This creates a unique flywheel where relevant ads can not only enhance the user experience, but also drive more value for advertisers in the form of increased views, clicks, and conversions.
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For retailers with a significant owned e-commerce property and large product catalogs, we also support mobile deep linking, enabling Pinterest mobile app users to click from a Pin directly to a product detail page within a retailer’s e-commerce app. There, a user can also pursue deeper consideration (by exploring available products and services or signing-up for memberships) and potentially transact.
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Our Advertising System Ad Formats We have a number of advertising products to help advertisers meet users across the full funnel, from upper funnel brand advertising to lower funnel performance advertising. Many of our ad formats can be leveraged by advertisers across upper and lower funnel objectives.
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Advertisers frequently leverage collections ads, which further support consideration by displaying products in action using lifestyle imagery and video. Finally, by using multiple images within a single ad, Pinterest’s carousel ads format enables advertisers to help users imagine multiple interactions with, and uses of, their product or service.
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Additionally, many of these formats are enabled with mobile deep links and/or direct link capabilities for a seamless, one-click handoff from ad to merchant product page. • 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. • Shopping ad : Used by advertisers who wish to promote specific products in their catalogs to reach users who are deciding what to buy. • Carousel ad : Multiple static images or videos 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. • Interactive ad : Used by advertisers to engage with their users through interactive formats.
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Driving purchases Our lower-funnel performance advertising solutions are typically utilized by advertisers looking to drive purchases of products or services. Advertisers frequently leverage shopping ads and standard image ads, which run in a variety of surfaces across the Pinterest website and app, to showcase content in a simple format and drive purchases.
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Upper funnel “brand” revenue is billed when an advertiser optimizes an ad campaign around “brand” objectives like impressions ("CPM") or video views ("CPV"). Lower funnel revenue is billed when an advertiser optimizes an ad campaign around “performance” objectives like clicks ("CPC"), actions (“CPA”) or conversion events ("oCPM") such as a checkout or add-to-cart.
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Additionally, features such as Shoppable Pins and search ads, as well as product alerts and related products, provide advertisers with more ways to drive users to action. Our advertising system Ad auction Advertisers on Pinterest primarily buy ads through an auction-based system.
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Campaign Management Advertisers can set up campaigns, track results and improve performance over time through our Ads Manager or the Pinterest API. Advertisers can also buy our Premiere Spotlight ad format directly through a Pinterest relationship manager on a cost per day (“CPD”) basis.
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Today, our advertisers can optimize their campaigns across the full funnel, including upper funnel impressions on a cost per thousand impressions (“CPM”) basis and video views on a cost per view (“CPV”) basis, mid funnel clicks ("CPC") and lower funnel conversion objectives on a cost per action (“CPA") or on an optimized cost per thousand impressions ("oCPM”) basis.
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To help maximize performance, advertisers can target specific groups of users based on 9 Part I interests, demographics and search keywords. We are continuing to make significant investments in AI to automate our ads platform. As of the year-ended December 31, 2023, the vast majority of our revenue flowed through our AI-enabled automated bidding tool.
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Ad relevance Because ads are content on Pinterest, ad relevance is powered by the same principles that drive organic recommendations.
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We serve these advertisers in customized ways depending on their size, sophistication and objectives across the full funnel. The majority of our advertisers utilize our Ads Manager platform to initiate and manage their campaigns.
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Our unique understanding of our users' taste, interests and preferences, as well as where they are in their purchase journey allows advertisers to target highly relevant ads across the full funnel. 9 Part I Advertisers can also target their ads to specific demographics (locations, languages, gender, age), device types, audiences (such as existing customers or users who recently engaged with their content) and interests or keywords.
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We also have a global sales force presence in 14 countries who work directly with advertisers and ad agencies to provide additional support through the campaign management cycle. In some geographies, we work with other third-parties to support our sales efforts.
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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 advertisers across a wide range of verticals and advertising goals.
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Using our proprietary AI technology and computer vision, we can leverage our data sets to analyze trends, understand intent and predict consumer behavior at a massive scale, to help serve personalized and relevant recommendations for users and improved ads delivery for our customers.
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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.
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We face competition across almost every aspect of our business. We compete to attract, engage and retain users and their time and attention. We also compete with other platforms to attract, retain and grow our base of creators and publishers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur advertising revenue could be harmed by many other factors, including: • 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 user demographics that make us less attractive to advertisers; 14 Part I • 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 users 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; • users 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, fear of recession, inflation, supply chain issues, and inventory and labor shortages, 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.
Biggest changeOur advertising revenue could be harmed by many other factors, including: • 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; • if our partnerships for third party advertisement demand do not yield expected business impact; • 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 and their advertising objectives; 14 Part I • changes in user 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 users 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; • users 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 fear of recession, inflation, supply chain issues, and inventory and labor shortages, 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; • adverse publicity, whether or not accurate, relating to us or to social media platforms in general, may tarnish our reputation and erode advertisers’ confidence in our platform; and • the other risks and uncertainties described in this Annual Report on Form 10-K.
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, some 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.
We believe that our ability to compete for advertisers depends upon many factors both within and beyond our control, including: • sales, marketing, customer service and support efforts; 18 Part I • 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; • the ease with which our advertising products fit into existing advertiser budgets compared to those of our competitors; • positions or actions taken by us, users, 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.
We believe that our ability to compete for advertisers depends upon many factors both within and beyond our control, including: • 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; 18 Part I • 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; • the ease with which our advertising products fit into existing advertiser budgets compared to those of our competitors; • positions or actions taken by us, users, 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.
In addition, third-party log-in providers may institute policies that restrict us from both communicating with users or identifying with users. As a result of these actions, user growth, retention and engagement on our platform has been and could be adversely affected in the future, even if for a temporary period.
In addition, third-party log-in providers may institute policies that restrict us from both communicating with users or identifying users. As a result of these actions, user growth, retention and engagement on our platform has been and could be adversely affected in the future, even if for a temporary period.
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.
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 block the display of our ads.
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.
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 changing or decreasing from prior periods or not being comparable to prior periods.
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, aimed at limiting the scope of protections available to online services and/or that further impose new obligations in areas affecting our business, such as liability for copyright infringement, content moderation, distributing targeted and other advertisements to minors, and other forms of unlawful content and/or online harm.
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, aimed at limiting the scope of protections available to online services and/or that further impose new obligations in are as affecting our business, such as liability for copyright infringement, content moderation, distributing targeted and other advertisements to minors, and other forms of unlawful content and/or online harm.
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: • 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 66⅔% of the then-outstanding voting power of our capital stock; • approval of 66⅔% 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; 38 Part I • 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.
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: • 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 66⅔% of the then-outstanding voting power of our capital stock; • approval of 66⅔% 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.
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 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.
Additionally, 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 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.
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.
Any proceedings, claims or inquiries involving us, whether successful or not, can 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.
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.
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 38 Part I 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.
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 users, creators, publishers and advertisers from using our platform. Any of these occurrences could harm our business, revenue and financial results.
Concerns over our information security or data privacy practices, whether actual or unfounded, can subject us to negative publicity and damage our brand and reputation and deter users, creators, publishers and advertisers from using our platform. Any of these occurrences could harm our business, revenue and financial results.
If we are unable to collect and use data either because of data privacy laws and regulations, it could 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.
If we are unable to collect and use data because of data privacy laws and regulations, it could 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.
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.
Further, when our revenue, users or other 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.
Our new future work strategy, including our efforts related to employee onboarding, training and development and retention may not be successful. Further, our future work strategy may continue 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.
Our work strategy, including our efforts related to employee onboarding, training and development and retention may not be successful. Further, our work strategy may continue 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.
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.
Additionally, in October 2020, the Organisation for Economic Co-operation and Development, 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.
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.
We rely on software, technologies and related services from third 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.
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 currently have Class B common stock that may be issued upon exercise of outstanding stock options or upon settlement of outstanding RSUs, 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”.
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.
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 35 Part I 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.
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.
Companies in the technology industry have recently experienced increased regulatory scrutiny relating to data privacy and data protection, and we have become subject to enhanced scrutiny and enforcement actions from regulators to ensure compliance with data privacy and data protection laws and regulations.
Maintaining the trust of users, creators, publishers 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.
Maintaining the trust of users, creators, publishers and advertisers is important to sustain user growth, retention and engagement, and we may incur significant costs in an effort to detect and prevent security incidents.
Factors that could cause fluctuations in the trading price of our Class A common stock include the following: • 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 and investment positions taken by institutional and other stockholders, including activist investors; • 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; 36 Part I • 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; • 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; • 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 or our publicly announced goals around environmentally friendly, ethical, socially conscious, and sustainable business practices or disclosures; • adoption and trading under a stock repurchase program; • if we are unable to address any workplace culture related issues (including to meet the goals we set in our Inclusion and Diversity Report that we publish periodically); • macroeconomic events that are beyond our control, such as the global outbreak of the COVID-19 pandemic; and • general economic conditions and slow or negative growth of our markets.
Factors that could cause fluctuations in the trading price of our Class A common stock include the following: • 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 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 and investment positions taken by institutional and other stockholders, including activist investors; • 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; • 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; 36 Part I • 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; • 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 or our publicly announced goals around environmentally friendly, ethical, socially conscious, and sustainable business practices or disclosures; • adoption and trading under a stock repurchase program; • if we are unable to address any workplace culture related issues (including to meet the goals we set in our Inclusion and Diversity Report that we publish periodically); • macroeconomic events that are beyond our control; and • general economic conditions and slow or negative growth of our markets.
Further, if we fail to identify and keep off our platform advertisers and merchants who offer poor quality goods or fail to deliver goods to their customers, we may lose user confidence.
If we fail to identify and keep off our platform advertisers and merchants who offer poor quality goods or fail to deliver goods to their customers, we may lose user confidence.
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 users, 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.
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 users, such as the boycott of Facebook and X (formerly 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 our users that are deemed to be hostile or inappropriate to other users, by the actions of our users 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 platform for illicit, illegal or objectionable ends.
Our brand and reputation can also be negatively affected by the content or actions of our users that are deemed to be hostile or inappropriate to other users, by the actions of our users 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 platform for illicit, illegal or objectionable ends.
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.
Advertisers will not do, or continue to do, business with us if they do not believe that advertisements on our platform 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.
In addition, controversies regarding content on other social media platforms, such as the boycott of Facebook and Twitter by some advertisers and the 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.
In addition, controversies regarding content on other social media platforms, such as the boycott of Facebook and X (formerly Twitter) by some advertisers and the 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.
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 users, advertisers, content creators, employees or our community, and therefore benefit our business.
We frequently make decisions regarding our business and platform 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 users, advertisers, content creators, employees or our community, and therefore benefit our business.
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. We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term stockholder value.
A change in these principles or interpretations could impact our revenue and financial results and could affect the reporting of transactions completed before the announcement of a change. We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term stockholder value.
These risks include: • political, social and economic instability, including armed conflict or hostilities, such as Russia's invasion of Ukraine; • 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; • 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.
These risks include: 19 Part I • political, social and economic instability, including armed conflict or hostilities, such as Russia's invasion of Ukraine and the war in the Middle East; • 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; • difficulties in staffing and managing global operations and the increased travel, infrastructure and legal and tax 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.
There are many other factors that could negatively affect user growth, retention and engagement, including if: • our competitors mimic our products or product features or create more engaging platforms or products, causing users to utilize their products instead of, or more frequently than, our products; • we do not provide a compelling user experience because of the decisions we make regarding our products or the type and frequency of advertisements that we display; 15 Part I • our content is not relevant to users’ personal taste and interests; • search queries by users do not yield relevant results; • third parties do not permit or continue to permit their content to be displayed on our platform; • users have difficulty or are blocked from installing, updating or otherwise accessing our platform on mobile devices or web browsers; • there are changes in the amount of time users spend across all applications and platforms, including ours; • users use or spend more time on other platforms that they feel are more relevant or engaging; • we are unable to attract creators or publishers to create engaging and relevant content on our platform; • technical or other problems frustrate the user experience, particularly if those problems prevent us from delivering our service in a fast and reliable manner; • we are unable to successfully educate users how to utilize new products and product features that we introduce, such as live stream content, video and shopping features; • 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 platform; • we are unable to address user and advertiser concerns regarding the content, privacy and security of our platform; • 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; • users adopt new technologies that block our products or services or 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 platform, including low-cost or discounted data plans, are discontinued; • merchants on Pinterest do not provide users with positive shopping experiences, for example, if products are not of the quality depicted on the platform or not readily available for purchase; • there are macro level conditions that are beyond our control, such as the COVID-19 pandemic and Russia’s invasion of Ukraine that cause users to spend less time on our platform; or • the other risks and uncertainties described in this Annual Report on Form 10-K.
There are many other factors that could negatively affect user growth, retention and engagement, including if: • our competitors mimic our products or product features or create more engaging platforms or products, causing users to utilize their products instead of, or more frequently than, our products; • we do not provide a compelling user 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 users’ personal taste and interests; 15 Part I • search queries by users do not yield relevant results; • third parties do not permit or continue to permit their content to be displayed on our platform; • users have difficulty or are blocked from installing, updating or otherwise accessing our platform on mobile devices or web browsers; • there are changes in the amount of time users spend across all applications and platforms, including ours; • users use or spend more time on other platforms that they feel are more relevant or engaging; • we are unable to attract creators or publishers to create engaging and relevant content on our platform; • technical or other problems frustrate the user experience, particularly if those problems prevent us from delivering our service in a fast and reliable manner; • we are unable to successfully educate users how to utilize new products and product features that we introduce, such as live stream content, video and shopping features; • 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 platform; • we are unable to address user and advertiser concerns regarding the content, privacy and security of our platform; • 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; • users adopt new technologies that block our products or services or 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 platform, including low-cost or discounted data plans, are discontinued; • merchants on Pinterest do not provide users with positive shopping experiences, for example, if products are not of the quality depicted on the platform or not readily available for purchase; • there are macro level conditions that are beyond our control, such as those arising from the end of the COVID-19 pandemic and public health emergency declarations that caused users to spend less time on our platform; or • the other risks and uncertainties described in this Annual Report on Form 10-K occur.
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.
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 technology and/or expand our sales force, and there can be no assurance that those efforts will be successful.
Risks related to our Business Operations 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 users, content creators and advertisers is dependent upon the reliable performance of our service and our underlying technology infrastructure and content delivery processes.
Risks related to our Business Operations 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 users, content creators and advertisers are dependent upon the reliable performance of our service and our underlying technology infrastructure and content delivery processes.
There are numerous federal, state, local and foreign laws and regulations regarding matters central to our business, data privacy and the collection, 23 Part I 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.
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.
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.
To offset some of the impact on our user growth, we have and may continue to 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.
We may not correctly or timely identify and serve content that is useful and relevant to users.
We may not always correctly or timely identify and serve content that is useful and relevant to users.
If a third-party gains unauthorized access to our platform, they may, among other things, post malicious spam and other content on our platform using a user’s, creator's, publishers' 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 a third-party gains unauthorized access to our platform, they may, among other things, post malicious spam and other content on our platform using a user’s, creator's, publishers' or advertiser’s account, that could negatively affect our products and our business. 22 Part I Some third parties, including advertisers and vendors, store information that we share with them on their networks.
This risk is particularly heightened in an environment where companies, including us, slow down hiring or reduce their workforce and will continue to find ways to further reduce costs due to macroeconomic conditions. 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.
This risk is particularly heightened in an environment where companies, including us, slow down hiring or reduce their workforce and will continue to find ways to further reduce costs due to macroeconomic conditions. In addition, it is important to our business to attract and retain highly talented personnel, particularly engineers with expertise in computer vision, AI and machine learning.
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.
It contains a number of covenants that limit our ability and our subsidiaries’ ability to, among other things, incur additional indebtedness, pay 33 Part I 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.
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 34 Part I continue to have a twenty-year carryforward period.
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.
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.
Any other restriction, whether by law, regulation, policy (including third-party policies) or otherwise, on our ability to collect and share data that our advertisers find useful, our ability to use or benefit from tracking and measurement technologies, including cookies, or that further reduces our ability to measure the effectiveness of advertising on our platform would impede our ability to attract, grow and retain advertisers.
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, certain third parties offer browser extensions that give users 26 Part I the option to remove Pinterest from their search engine recommendations.
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, certain third parties offer browser extensions that give users the option to remove Pinterest from their search engine recommendations.
We expect that our ability to identify and respond 21 Part I to this content in a consistently applied manner and on a timely basis or at all may decrease as the number of users 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.
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 users 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.
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 33 Part I may limit our operational flexibility or otherwise adversely affect our results of operations.
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.
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. 22 Part I 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.
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.
Further, if policy-violating content is found on our platform, we may be in violation of the terms of certain of 28 Part I 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.
Further, if policy-violating content is found on our platform, 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.
Any failure or perceived failure by us to comply with our privacy policies, data privacy-related obligations to users 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 user or advertiser growth or damage to our brand and reputation.
Any failure or perceived failure by us to comply with our privacy policies, data privacy-related obligations to users 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 24 Part I regulations, or regulatory scrutiny, can 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 user or advertiser growth or damage to our brand and reputation.
For example, the EU Directive on Copyright in the Digital Single Market (EU Copyright Directive) has been implemented in several EU member states and expands the liability scheme for online sharing-content platforms and imposes additional requirements for the content uploaded by their users to protect copyright owners against unlicensed use of their work.
For example, the EU Directive on Copyright in the Digital Single Market (EU Copyright Directive) has been implemented in several EU member states and expands the liability scheme for online content sharing service providers and imposes additional requirements for the content uploaded by their users to protect copyright owners against unlicensed use of their work.
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 16 Part I which may result in lower users engagement with such content.
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 users engagement with such content.
User engagement has and will continue to fluctuate depending on factors beyond our control. For example, although we saw a higher number of users and higher user engagement during the peak of the COVID-19 pandemic in 2020, we experienced declines in the number of users and lower levels of user engagement as the COVID-19 pandemic began to subside.
User engagement has and will continue to fluctuate depending on factors beyond our control. For example, although we saw a higher number of users and higher user engagement during the peak of the COVID-19 pandemic in 2020, we experienced declines in the number of users and lower levels of user engagement as the COVID-19 pandemic subsided.
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, users or advertisers or other issues, may harm our brand and reputation.
Any scrutiny, inquiry, investigation or action, including regarding our data 21 Part I 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, users or advertisers or other issues, may harm our brand and reputation.
We compete with large, established companies and companies that offer widely used products, such as Amazon, Meta (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.
We compete with large, established companies and companies that offer widely used products, such as Amazon, Meta (including Instagram), Google (including YouTube), Snap, TikTok and X (formerly Twitter), which provide their users with a variety of online products, services, content (including video), and offerings, and advertising offerings, including web search engines, social networks and other means of discovering, using or acquiring goods and services.
If prohibitions or restrictions are imposed on our platform, or if our competitors are able to successfully penetrate new geographic markets or capture a greater share of 29 Part I 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.
If additional prohibitions or restrictions are imposed on our platform, 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.
For example, we have been investing in publishing native content and short form video content on our platform. User engagement has declined and may continue to decline as we continue to learn to distribute this native and short form video content efficiently and as users learn new ways to use and navigate our platform.
For example, we have invested in publishing native content and short form video content on our platform. User engagement has declined and may continue to decline as we continue to learn to distribute this native and short form video content efficiently and as users learn new ways to use and navigate our platform.
Alternatively, we may plan to enter new international markets and expand in existing markets where we have limited or no experience in deploying our service or selling advertisements.
Alternatively, we may enter new international markets and expand in existing markets where we have limited or no experience in deploying our service or selling advertisements.
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 inflation, labor shortage and the COVID-19 pandemic which had an impact on the pace of our global expansion; • 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.
Bribery Act and similar laws in other jurisdictions; • compliance with laws governing supply chains and related business operations; • compliance with environmental, social and governance (ESG) laws and 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 inflation and labor shortage which had an impact on the pace of our global expansion; • 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.
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 27 Part I competitive products, could harm usage of our platform.
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 platform.
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 invalidation of 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.
These actions grow our users due to signups of new users and increase retention and engagement of existing users. Our ability to maintain and increase the number of users directed to our platform from search engines is not within our control.
These actions grow our users due to signups of new users and increase retention and engagement of existing users. 26 Part I Our ability to maintain and increase the number of users directed to our platform from search engines is not within our control.
Our operating results depend on numerous factors, many of which are outside of our control, including: • our ability to generate revenue from our platform; • our ability to improve or maintain gross margins; • the number and relevancy of advertisements shown to users; • the relevancy of content shown to users; • the manner in which users 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; • seasonal fluctuations in engagement on our platform, specifically we have historically experienced lower engagement in our second quarter; • fluctuations in spending by our advertisers and platform usage and engagement by users due to macroeconomic conditions, such as the COVID-19 pandemic, current inflationary environment and Russia’s invasion of Ukraine; • 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; 32 Part I • 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; • fluctuations, caused by stock price volatility, in the amount we spend to fund tax withholding and remittance obligations related to the vesting and settlement of RSUs as we transitioned to net settle such RSUs; and • 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.
Our operating results depend on numerous factors, many of which are outside of our control, including: • our ability to generate revenue from our platform; • our ability to improve or maintain gross margins; • the number and relevancy of advertisements shown to users; • the relevancy of content shown to users; • the manner in which users 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 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; • seasonal fluctuations in engagement on our platform, including our historical experience of lower engagement in our second quarter; • fluctuations in spending by our advertisers and platform usage and engagement by users due to macroeconomic conditions, such as the stress in the banking industry and current inflationary environment; • 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; 32 Part I • 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; • fluctuations, caused by stock price volatility, in the amount we spend to fund tax withholding and remittance obligations related to the vesting and settlement of restricted stock units ("RSUs") as we continue to net settle such RSUs; and • 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.
We may not be able to effectively compete for content on our platform or may get content that is not relevant, useful or inspiring to our users. Users engage with content that is relevant to their country, language and gender preferences as well as their personal interests and intent.
We may not be able to effectively compete for content on our platform, may not be able to effectively partner with third-party content publishers or may get content that is not relevant, useful or inspiring to our users. Users engage with content that is relevant to their country, language and gender preferences as well as their personal interests and intent.
We have incurred operating losses in the past, may increase 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 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 may need to introduce new products or updates to existing products that require users to agree to new terms of service that users do not like, which may negatively affect our brand and reputation.
From time to time, we introduce new products or updates to existing products that require users to agree to new terms of service that users may not like, which may negatively affect our brand and reputation.
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.
We are continuing to develop and improve 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.
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 users, especially in non-U.S. markets.
As a result, we do not always 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 users, especially in 16 Part I non-U.S. markets.
Further, due to challenging macroeconomic conditions, we may make decisions to save costs in certain ways that adversely affect our business, operations, revenue and financial results. Over the years, our organization has grown in number of employees and offices. We also recently announced a flexible work model and a majority of our employees are working remotely.
Further, due to challenging macroeconomic conditions, we may make decisions to save costs in certain ways that adversely affect our business, operations, revenue and financial results.Over the years, our organization has grown in number of employees and offices. We utilize a flexible work model and, as a result, a majority of our employees work remotely.
Governmental authorities outside the United States have restricted, and may in the future seek to restrict access to our platform 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 countries such as China, India and Kazakhstan.
Governmental authorities outside the United States have restricted, and may in the future seek to restrict access to our platform if they consider us to be in violation of their laws or for other reasons. For example, access to our service has been 29 Part I or is currently restricted in whole or in part in certain countries.
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.
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. We do not intend to pay dividends for the foreseeable future.
Any of these factors could result in decrease in user growth, retention or engagement. We regularly monitor how our advertising affects users’ experiences in our effort to avoid delivering too many advertisements or irrelevant advertisements to users. Therefore, we may decide to change the number of advertisements or eliminate certain types of advertisements to maintain users’ satisfaction in the service.
Any of these factors could decrease our user growth, retention or engagement. We regularly monitor how our advertising affects users’ experiences in our effort to avoid delivering too many advertisements or irrelevant advertisements to users, and will, from time to time, change the number of advertisements or eliminate certain types of advertisements to maintain users’ satisfaction in the service.
In addition, third parties may attempt to induce our employees, users, creators, publishers, advertisers or vendors to disclose information to gain access to our data, advertisers' data or users’ data.
In addition, third parties have in the past and may in the future may attempt to induce our employees, users, creators, publishers, advertisers or vendors to disclose information to gain access to our data, advertisers' data or users’ data.
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. Adverse global economic and financial conditions could harm our business and financial condition.
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.
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 COVID-19 pandemic, terrorist attacks, acts of war, earthquakes, the effects of climate change and other events beyond our control.
In addition, our systems and operations are vulnerable to damage, delays or interruptions from fire, flood, power loss, telecommunications failure, spikes in usage volume, epidemics, pandemics and other public health emergencies, terrorist attacks, acts of war, earthquakes, the effects of climate change and other events beyond our control.
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 75.0% of the voting power of our outstanding capital stock as of December 31, 2022.
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 74.5% of the voting power of our outstanding capital stock as of December 31, 2023.
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 platform. We endeavor to keep divisive, disturbing or unsafe content off our platform.
Some of the actions that we may take to make our platform more positive and inspiring and 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 platform.
If our platform is unavailable when users, content creators or advertisers attempt to access it, if it does not load as quickly as they expect or if their content is not saved, users may not return to our platform as often in the future, or at all.
From time to time, we experience interruptions in or disruptions of our systems. If our platform is unavailable when users, content creators or advertisers attempt to access it, if it does not load as quickly as they expect or if their content is not saved, users may not return to our platform as often in the future, or at all.
We currently depend on the continued services and performance of our key personnel, including Benjamin Silbermann, Bill Ready and others. Mr. Silbermann’s and Mr. Ready's employment, and the employment of our other key personnel, is at 25 Part I will, which means they may resign or be terminated for any reason at any time.
We currently depend on the continued services and performance of our key personnel, including William Ready and others. Mr. Ready'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. Similarly, Mr.
We could also face fines or orders restricting or blocking our service in particular countries as a result of content on our platform.
We are also subject to fines or orders restricting or blocking our service in particular countries as a result of content on our platform.
We generated net losses of $96.0 million and $128.3 million for the years ended December 31, 2022 and 2020, respectively and net income of $316.4 million for the year ended December 31, 2021. As of December 31, 2022, we had an accumulated deficit of $2,114.7 million.
We generated net losses of $35.6 million and $96.0 million for the years ended December 31, 2023 and 2022, respectively and net income of $316.4 million for the year ended December 31, 2021. As of December 31, 2023, we had an accumulated deficit of $2,150.3 million.
We have 5,882,494,249 shares of authorized but unissued Class A common stock 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.
As of December 31, 2023, we had 5,870,385,588 shares of authorized but unissued Class A common stock 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.
Our business, revenue and financial results could be harmed by the loss 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 business, revenue and financial results could be harmed by the loss 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. In addition, a portion of our revenue is derived from partnerships with third-party advertising platforms.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Facilities Our corporate headquarters is located in San Francisco, California, where we occupy approximately 350,000 square feet of leased office space, excluding leases we have ceased to use. As of December 31, 2022, we maintained offices in various locations in the United States and internationally totaling approximately 681,000 square feet.
Biggest changeItem 2. Properties Facilities Our corporate headquarters is located in San Francisco, California, where we occupy approximately 120,000 square feet of leased office space, excluding leases we have ceased to use. As of December 31, 2023, we maintained offices in various 40 Part I locations in the United States and internationally totaling approximately 506,000 square feet.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeLegal 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.
Biggest changeLegal 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, securities, corporate governance, 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.
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. 40 Part II
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. 41 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnregistered sales of equity securities and use of proceeds The following table shows information about our purchases of equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934 for the year ended December 31, 2022: 41 Part II Period Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under publicly announced plans or programs April 1 - April 30, 2022 — $ — — $ — May 1 - May 31, 2022 17,941 22.91 — — June 1 - June 30, 2022 40,978 18.18 — — July 1 - July 31, 2022 — — — — August 1 - August 31, 2022 17,942 21.77 — — September 1 - September 30, 2022 (2) 121,970 24.76 — — October 1 - October 31, 2022 22,430 22.97 — — November 1 - November 30, 2022 17,941 24.38 — — December 1 - December 31, 2022 131,749 24.44 — — Total 370,951 $ 23.56 — $ — (1) We withheld shares from employees to satisfy tax withholding obligations on release of restricted stock awards.
Biggest changePurchases of equity securities by issuer The following table shows information about our purchases of equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934 for the three months ended December 31, 2023: Period Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under publicly announced plans or programs October 1 - October 31, 2023 28,976 $ 25.96 — — November 1 - November 30, 2023 17,942 $ 32.13 — — December 1 - December 31, 2023 87,425 $ 37.12 — — Total 134,343 — — (1) We withheld shares from employees to satisfy tax withholding obligations on release of restricted stock awards.
Under the stock repurchase program, we are authorized to repurchase, from time-to-time, shares of our Class A common stock through open market purchases, in privately negotiated transactions or in other such manner as permitted by securities law and as determined by management at such time and in such amounts as management may decide.
Under the stock repurchase program, we are authorized to repurchase, from time-to-time, shares of our Class A common stock through open market purchases, in privately negotiated transactions or in such other manner as permitted by securities law and as determined by management at such time and in such amounts as management may decide.
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.
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 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.
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, 2022.
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, 2023.
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. 42 Part II Item 6. [Reserved] 43 Part II
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. Item 6. [Reserved] Not applicable. 43 Part II
Holders of record As of January 31, 2023, there were 137 stockholders of record of our Class A common stock and 57 stockholders of record of our Class B common stock.
Holders of record As of February 2, 2024, there were 130 stockholders of record of our Class A common stock and 49 stoc kholders of record of our Class B common stock.
The program does not obligate us to repurchase any specific number of shares and may be modified, suspended or discontinued at any time.
The program does not obligate us to repurchase any specific number of shares and may be modified, suspended or discontinued at any time. The timing, manner, price and amount of any repurchases are determined by management in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions.
On February 2, 2023, our board of directors authorized a stock repurchase program of up to $500 million of our Class A common stock over the next 12 months.
The value of the common stock was based on the closing price of our Class A common stock on the vesting date. 42 Part II On September 16, 2023, our board of directors authorized a new stock repurchase program of up to $1.0 billion of our Class A common stock.
Removed
The value of the common stock was based on the closing price of our Class A common stock on the vesting date. (2) The average price paid per share was incorrectly disclosed as $23.30 in Form 10-Q for the quarterly period ended September 30, 2022.
Added
As of December 31, 2023, $1.0 billion remains available for repurchases under the stock repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

50 edited+9 added−11 removed27 unchanged
Biggest changeThe 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): Year Ended December 31, 2022 2021 2020 Net income (loss) $ (96,047) $ 316,438 $ (128,323) Depreciation and amortization 46,489 27,500 36,988 Share-based compensation 497,123 415,382 321,020 Interest income (30,943) (4,204) (16,119) Interest expense and other (income) expense, net 15,210 9,420 635 Provision for income taxes 10,103 4,533 1,303 Non-cash charitable contributions — 45,300 — Termination of future lease contract — — 89,500 Adjusted EBITDA (1) $ 441,935 $ 814,369 $ 305,004 (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. 49 Part II Components of results of operations Revenue.
Biggest changeThe 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): Year Ended December 31, 2023 2022 2021 Net income (loss) $ (35,610) $ (96,047) $ 316,438 Depreciation and amortization 21,509 46,489 27,500 Share-based compensation 647,860 497,123 415,382 Interest (income) expense, net (105,439) (30,235) (3,075) Other (income) expense, net (3,799) 14,502 8,291 Provision for income taxes 19,170 10,103 4,533 Restructuring charges 126,882 — — Non-cash charitable contributions 12,890 — 45,300 Adjusted EBITDA $ 683,463 $ 441,935 $ 814,369 50 Part II Components of results of operations Revenue.
Quarterly monthly active users (in millions) 45 Part II Note: U.S. and Canada, Europe and Rest of World may not sum to Global due to rounding. Europe includes Russia and Turkey for our reporting of Revenue, MAUs and ARPU by geographic region. A portion of our MAUs visit Pinterest on a weekly basis.
Quarterly monthly active users (in millions) Note: U.S. and Canada, Europe and Rest of World may not sum to Global due to rounding. Europe includes Russia and Turkey for our reporting of Revenue, MAUs and ARPU by geographic region. 45 Part II A portion of our MAUs visit Pinterest on a weekly basis.
Other income (expense), net consists primarily of interest earned on our cash equivalents and marketable securities and foreign currency exchange gains and losses. 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 EBITDA.
Interest and other income (expense), net consists primarily of interest earned on our cash equivalents and marketable securities and foreign currency exchange gains and losses. 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 EBITDA.
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.
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. Interest and other income (expense), net.
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. 56 Part II
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. 57 Part II
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.
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 cost per day ("CPD") basis or views a video ad contracted on a cost per view ("CPV") 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. 55 Part II Revenue recognition We generate revenue by delivering ads on our website and mobile application.
We refer to such estimates and judgments, discussed further below, as critical accounting policies and estimates. 56 Part II 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.
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 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, 2021.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021 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, 2022.
Interest on any borrowings under the 2022 revolving credit facility accrues at either an adjusted term SOFR plus 0.10% and a margin of 1.50% or at an alternative base rate plus a margin of 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 2022 revolving credit facility.
Interest on any borrowings under the 2022 revolving credit facility accrues at either an adjusted term Secured Overnight Financing Rate ("SOFR") plus 0.10% and a margin of 1.50% or at an alternative base rate plus a margin of 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 2022 revolving credit facility.
Under the stock repurchase program, we are authorized to repurchase, from time-to-time, shares of our Class A common stock through open market purchases, in privately negotiated transactions or 54 Part II in other such manner as permitted by securities law and as determined by management at such time and in such amounts as management may decide.
Under the stock repurchase program, we are authorized to repurchase, from time-to-time, shares of our Class A common stock through open market purchases, in privately negotiated transactions or in such other manner as permitted by securities law and as determined by management at such time and in such amounts as management may decide.
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 define a MAU 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.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021 is presented below.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 is presented below.
Our primary uses of cash are personnel-related costs and the cost of hosting our website and mobile application. As of December 31, 2022, we had $2,698.2 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.
Our primary uses of cash are personnel-related costs and the cost of hosting our website and mobile application. As of December 31, 2023, we had $2,511.1 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.
Macroeconomic conditions, such as inflation, supply chain issues, changes in foreign currency exchange rates, competition from other platforms and other risks and uncertainties have impacted, and all or some of these factors may continue to impact, advertiser demand, user growth, user engagement, and our business, operations and financial results.
Macroeconomic conditions, such as inflation, supply chain issues, changes in foreign currency exchange rates, competition from other platforms and other risks and uncertainties have impacted, and all or some of these factors may continue to impact, advertiser demand, user growth, user engagement, and our business, operations and financial results. See "Risk Factors" and "Note About Forward-Looking Statements” for additional details.
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 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.
Revenue growth was driven by a 10% increase in ARPU and offset by a 1% decrease in average MAUs for the year ended December 31, 2022 as compared to the year ended December 31, 2021. The number of advertisements served increased by 17% while the price of advertisements decreased 7% as compared to the year ended December 31, 2021.
Revenue growth was driven by an 8% increase in average MAUs and a 1% increase in ARPU for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The number of advertisements served increased by 31% while the price of advertisements decreased by 17% as compared to the year ended December 31, 2022.
Financing activities Cash flows from financing activities consist of tax remittances on release of RSUs and RSAs and proceeds from the exercise of stock options.
Financing activities Cash flows from financing activities consist of tax remittances on release of RSUs and RSAs, repurchases of our Class A common stock and proceeds from the exercise of stock options.
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 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") or cost per day ("CPD") basis or views a video ad contracted on a cost per view ("CPV") basis.
Adjusted EBITDA was $441.9 million for the year ended December 31, 2022, as compared to $814.4 million for the year ended December 31, 2021, due to the factors described above.
Adjusted EBITDA was $683.5 million for the year ended December 31, 2023, as compared to $441.9 million for the year ended December 31, 2022, due to the factors described above.
For the years ended December 31, 2022, 2021 and 2020, our net cash flows were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Net cash provided by (used in): Operating activities $ 469,202 $ 752,907 $ 28,826 Investing activities $ (128,245) $ (25,858) $ (47,623) Financing activities $ (148,927) $ 22,162 $ 19,638 Operating activities 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.
For the years ended December 31, 2023 and 2022, our net cash flows were as follows (in thousands): Year Ended December 31, 2023 2022 Net cash provided by (used in): Operating activities $ 612,961 $ 469,202 Investing activities $ (36,993) $ (128,245) Financing activities $ (826,763) $ (148,927) Operating activities 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.
The following table sets forth our consolidated statements of operations data (as a percentage of revenue): Year Ended December 31, 2022 2021 2020 Revenue 100 % 100 % 100 % Costs and expenses: Cost of revenue 24 21 27 Research and development 34 30 36 Sales and marketing 33 25 26 General and administrative 12 12 20 Total costs and expenses 104 87 108 Income (loss) from operations (4) 13 (8) Interest income 1 — 1 Interest expense and other income (expense), net (1) — — Income (loss) before provision for income taxes (3) 12 (8) Provision for income taxes — — — Net income (loss) (3) % 12 % (8) % 51 Part II Years Ended December 31, 2022 and 2021 Revenue Year Ended December 31, 2022 2021 % change (in thousands) Revenue $ 2,802,574 $ 2,578,027 9% Revenue for the year ended December 31, 2022 increased by $224.5 million compared to the year ended December 31, 2021.
The following table sets forth our consolidated statements of operations data (as a percentage of revenue): Year Ended December 31, 2023 2022 2021 Revenue 100 % 100 % 100 % Costs and expenses: Cost of revenue 23 24 21 Research and development 35 34 30 Sales and marketing 30 33 25 General and administrative 17 12 12 Total costs and expenses 104 104 87 Income (loss) from operations (4) (4) 13 Interest income (expense), net 3 1 — Other income (expense), net — (1) — Income (loss) before provision for income taxes (1) (3) 12 Provision for income taxes 1 — — Net income (loss) (1 %) (3 %) 12 % 52 Part II Years Ended December 31, 2023 and 2022 Revenue Year Ended December 31, 2023 2022 % change (in thousands) Revenue $ 3,055,071 $ 2,802,574 9% Revenue for the year ended December 31, 2023 increased by $252.5 million compared to the year ended December 31, 2022 primarily due to growth in demand from our awareness and conversion objectives.
Quarterly average revenue per user 47 Part II For the year ended December 31, 2022, global ARPU was $6.36, which represents an increase of 10% compared to the year ended December 31, 2021.
Quarterly average revenue per user For the year ended December 31, 2023, global ARPU was $6.44, which represents an increase of 1% compared to the year ended December 31, 2022.
Net cash provided by operating activities decreased by $283.7 million for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to decrease in our net income (loss) offset by an increase in collections of accounts receivable.
Net cash provided by operating activities increased by $143.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to decrease in our net income (loss) after adjusting reconciling items offset by an increase in collections of accounts receivable.
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 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.
Provision for income taxes Year Ended December 31, 2022 2021 % change (in thousands) Provision for income taxes $ 10,103 $ 4,533 123% Provision for income taxes was primarily due to income generated in U.S. federal, state and certain foreign jurisdictions for each of the periods presented and for the year ended December 31, 2022 includes the effects of the capitalization and amortization of research and development expenses as required by the 2017 Tax Cuts and Jobs Act. 53 Part II Net income (loss) and adjusted EBITDA Year Ended December 31, 2022 2021 % change (in thousands) Net income (loss) $ (96,047) $ 316,438 (130) % Adjusted EBITDA $ 441,935 $ 814,369 (46) % Net loss for the year ended December 31, 2022 was $96.0 million, as compared to net income of $316.4 million for the year ended December 31, 2021.
Provision for i ncome t axes Year Ended December 31, 2023 2022 % change (in thousands) Provision for income taxes $ 19,170 $ 10,103 90% Provision for income taxes was primarily due to income generated in U.S. federal, state and certain foreign jurisdictions, and includes the effects of the capitalization and amortization of research and development expenses as required by the 2017 Tax Cuts and Jobs Act, for each of the periods presented. 54 Part II Net income (loss) and adjusted EBITDA Year Ended December 31, 2023 2022 % change (in thousands) Net income (loss) $ (35,610) $ (96,047) 63% Adjusted EBITDA $ 683,463 $ 441,935 55% Net income (loss) for the year ended December 31, 2023 was $(35.6) million, as compared to $(96.0) million for the year ended December 31, 2022.
We use MAUs and ARPU to assess the growth and health of the overall business and believe that these metrics best reflect our ability to attract, retain, engage and monetize our users, and thereby drive revenue. 48 Part II 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.
For the year ended December 31, 2023, U.S. and Canada ARPU was $25.52, an increase of 5%, Europe ARPU was $3.73, an increase of 15%, and Rest of World ARPU was $0.50, an increase of 17% compared to the year ended December 31, 2022. 48 Part II We use MAUs and ARPU to assess the growth and health of the overall business and believe that these metrics best reflect our ability to attract, retain, engage and monetize our users, and thereby drive revenue. 49 Part II 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.
Net cash used in investing activities increased by $102.4 million for the year ended December 31, 2022 compared to the year ended December 31, 2021 due to the acquisition of The Yes Platform, Inc., increased purchases of property and equipment and intangible assets, and a net increase in marketable securities.
Net cash used in investing activities decreased by $91.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 due to the acquisition of The Yes in the second quarter of 2022, and a decrease in purchases of property and equipment and intangible assets, offset by an increase in net purchases of marketable securities.
Net cash used in financing activities increased by $171.1 million for the year ended December 31, 2022 compared to the year ended December 31, 2021 primarily due to our transition to net settling the tax remittances on release of RSUs and RSAs in the second quarter of 2022.
Net cash used in financing activities increased by $677.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to the $500.0 million repurchase of Class A common stock during the year ended December 31, 2023, as well as our transition to net settling the tax remittances on release of RSUs and RSAs in the second quarter of 2022.
The obligations under the 2022 revolving credit facility are secured by liens on substantially all of our domestic assets, including certain domestic intellectual property assets. There are no amounts outstanding under this facility as of December 31, 2022.
The obligations under the 2022 revolving credit facility are secured by liens on substantially all of our domestic assets, including certain domestic intellectual property assets. Our total borrowing capacity under the revolving credit facility is $500.0 million as of December 31, 2023.
Overview of 2022 results Our key financial and operating results as of and for the year ended December 31, 2022 are as follows: • Revenue was $2,802.6 million, an increase of 9% compared to 2021. • Monthly active users ("MAUs") were 450 million, an increase of 4% compared to December 31, 2021. • Share-based compensation expense was $497.1 million, an increase of $81.7 million compared to 2021. • Total costs and expenses were $2,904.3 million. • Loss from operations was $101.7 million. • Net loss was $96.0 million. • Adjusted EBITDA was $441.9 million. • Cash, cash equivalents and marketable securities were $2,698.2 million. • Headcount was 3,987.
Overview of 2023 results Our key financial and operating results as of and for the year ended December 31, 2023 are as follows: • Revenue was $3,055.1 million, an increase of 9% compared to 2022. • Monthly active users ("MAUs") were 498 million, an increase of 11% compared to December 31, 2022. • Share-based compensation expense was $647.9 million, an increase of $150.7 million compared to 2022. • Total costs and expenses were $3,180.7 million, including $126.9 million of restructuring charges . • Loss from operations was $125.7 million. • Net loss was $35.6 million. • Adjusted EBITDA was $683.5 million. • Cash, cash equivalents and marketable securities were $2,511.1 million. • Headcount was 4,014 .
The 2022 revolving credit facility also contains an accordion option which, if exercised, would allow us to increase the aggregate commitments by up to $405.0 million provided we are able to secure additional lender commitments and satisfy certain other conditions.
In October 2022, we replaced the $500.0 million revolving credit facility entered into in November 2018 with an amended and restated five-year $400.0 million revolving credit facility (the “2022 revolving credit facility”) that contained an accordion option which, if exercised, would allow us to increase the aggregate commitments by up to $405.0 million provided we are able to secure additional lender commitments and satisfy certain other conditions.
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. 50 Part II Results of operations The following tables set forth our consolidated statements of operations data (in thousands): Year Ended December 31, 2022 2021 2020 Revenue $ 2,802,574 $ 2,578,027 $ 1,692,658 Costs and expenses (1) : Cost of revenue 678,597 529,320 449,358 Research and development 948,980 780,264 606,194 Sales and marketing 933,133 641,279 442,807 General and administrative 343,541 300,977 336,803 Total costs and expenses 2,904,251 2,251,840 1,835,162 Income (loss) from operations (101,677) 326,187 (142,504) Interest income 30,943 4,204 16,119 Interest expense and other income (expense), net (15,210) (9,420) (635) Income (loss) before provision for income taxes (85,944) 320,971 (127,020) Provision for income taxes 10,103 4,533 1,303 Net income (loss) $ (96,047) $ 316,438 $ (128,323) Adjusted EBITDA (2) $ 441,935 $ 814,369 $ 305,004 (1) Includes share-based compensation expense as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenue $ 7,629 $ 7,438 $ 7,865 Research and development 324,161 309,715 218,718 Sales and marketing 99,467 52,691 35,645 General and administrative 65,866 45,538 58,792 Total share-based compensation $ 497,123 $ 415,382 $ 321,020 (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.
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. 51 Part II Results of operations The following tables set forth our consolidated statements of operations data (in thousands): Year Ended December 31, 2023 2022 2021 Revenue $ 3,055,071 $ 2,802,574 $ 2,578,027 Costs and expenses (1) : Cost of revenue 688,760 678,597 529,320 Research and development 1,068,416 948,980 780,264 Sales and marketing 911,166 933,133 641,279 General and administrative 512,407 343,541 300,977 Total costs and expenses 3,180,749 2,904,251 2,251,840 Income (loss) from operations (125,678) (101,677) 326,187 Interest income (expense), net 105,439 30,235 3,075 Other income (expense), net 3,799 (14,502) (8,291) Income (loss) before provision for income taxes (16,440) (85,944) 320,971 Provision for income taxes 19,170 10,103 4,533 Net income (loss) $ (35,610) $ (96,047) $ 316,438 Adjusted EBITDA (2) $ 683,463 $ 441,935 $ 814,369 (1) Includes share-based compensation expense as follows (in thousands): Year Ended December 31, 2023 2022 2021 Cost of revenue $ 11,117 $ 7,629 $ 7,438 Research and development 422,964 324,161 309,715 Sales and marketing 96,798 99,467 52,691 General and administrative 116,981 65,866 45,538 Total share-based compensation $ 647,860 $ 497,123 $ 415,382 (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.
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 define Adjusted EBITDA as net income (loss) adjusted to exclude depreciation and amortization expense, share-based compensation expense, interest income (expense), net, other income (expense), net, provision for income taxes, restructuring charges and non-cash charitable contributions.
General and administrative Year Ended December 31, 2022 2021 % change (in thousands) General and administrative $ 343,541 $ 300,977 14% Percentage of revenue 12 % 12 % General and administrative for the year ended December 31, 2022 increased by $42.6 million compared to the year ended December 31, 2021.
General and a dministrative Year Ended December 31, 2023 2022 % change (in thousands) General and administrative $ 512,407 $ 343,541 49% Percentage of revenue 17 % 12 % General and administrative for the year ended December 31, 2023 increased by $168.9 million compared to the year ended December 31, 2022.
Research and development Year Ended December 31, 2022 2021 % change (in thousands) Research and development $ 948,980 $ 780,264 22% Percentage of revenue 34 % 30 % Research and development for the year ended December 31, 2022 increased by $168.7 million compared to the year ended December 31, 2021.
Research and d evelopment Year Ended December 31, 2023 2022 % change (in thousands) Research and development $ 1,068,416 $ 948,980 13% Percentage of revenue 35 % 34 % Research and development for the year ended December 31, 2023 increased by $119.4 million compared to the year ended December 31, 2022.
For the year ended December 31, 2022 compared to the year ended December 31, 2021, revenue based on our estimate of the geographic location of our users increased by 8% in the U.S. and Canada to $2,309.3 million driven by a 16% increase in U.S. and Canada ARPU offset by a 6% decrease in average U.S. and Canada MAUs.
For the year ended December 31, 2023 compared to the year ended December 31, 2022, revenue based on our estimate of the geographic location of our users increased by 6% in the U.S. and Canada to $2,447.3 million, Europe revenue increased by 21% to $483.4 million and Rest of World revenue increased by 31% to $124.4 million.
Cost of revenue Year Ended December 31, 2022 2021 % change (in thousands) Cost of revenue $ 678,597 $ 529,320 28% Percentage of revenue 24 % 21 % Cost of revenue for the year ended December 31, 2022 increased by $149.3 million compared to the year ended December 31, 2021.
Cost of r evenue Year Ended December 31, 2023 2022 % change (in thousands) Cost of revenue $ 688,760 $ 678,597 1% Percentage of revenue 23 % 24 % Cost of revenue for the year ended December 31, 2023 increased by $10.2 million compared to the year ended December 31, 2022.
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. U.S. and Canada, Europe and Rest of World may not sum to Global and quarterly amounts may not sum to annual due to rounding. Average Revenue per User (“ARPU”).
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.
Our material cash requirements include our $2,357.1 million commitment with Amazon Web Services, for which we are not subject to annual purchase commitments, and our $270.6 million of operating lease obligations, of which $59.0 million is due within the next 12 months.
Our material cash requirements include our $1,754.6 million commitment with Amazon Web Services, for which we are not subject to annual purchase commitments, and our $241.0 million of operating lease obligations, of which $42.9 million is due within the next 12 months. 55 Part II On September 16, 2023, our board of directors authorized a new stock repurchase program of up to $1.0 billion of our Class A common stock.
Our revenue in U.S. and Canada and, to a lesser extent, Europe is higher primarily due to the relative size and maturity of the digital advertising markets in these geographies.
Our revenue in U.S. and Canada and, to a lesser extent, Europe is higher primarily due to the relative size and maturity of the digital advertising markets in these geographies. Quarterly revenue (in millions) Note: Revenue by geography in the charts above is geographically apportioned based on our estimate of users' geographic location when they perform a revenue-generating activity.
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 recognize revenue only after satisfying our contractual performance obligations. We occasionally offer customers free ad inventory.
We recognize revenue over the service period for ads contracted on a CPD basis, which do not contain minimum impression guarantees. We typically bill customers on a CPC, CPM, CPV, or CPD basis, and our payment terms vary by customer type and location. The term between billing and payment due dates is not significant.
The increase was primarily due to a 20% increase in average headcount, which drove higher personnel expenses, a $14.4 million increase in share-based compensation expense, as well as higher allocated facilities costs and outsourced services. 52 Part II Sales and marketing Year Ended December 31, 2022 2021 % change (in thousands) Sales and marketing $ 933,133 $ 641,279 46% Percentage of revenue 33 % 25 % Sales and marketing for the year ended December 31, 2022 increased by $291.9 million compared to the year ended December 31, 2021.
The increase was primarily due to a $98.8 million increase in share-based compensation expense and a 13% increase in personnel expenses, partially offset by a $17.1 million decrease in allocated facilities costs and lower outsourced services costs. 53 Part II Sales and marketing Year Ended December 31, 2023 2022 % change (in thousands) Sales and marketing $ 911,166 $ 933,133 (2%) Percentage of revenue 30 % 33 % Sales and marketing for the year ended December 31, 2023 decreased by $22.0 million compared to the year ended December 31, 2022.
The increase was primarily due to an $82.0 million increase in marketing expenses; higher personnel expenses due to a 24% increase in average headcount and $11.1 million of severance and related payments resulting from the departure of certain key employees of The Yes; $46.8 million of share-based compensation expense, which includes $22.9 million of share-based compensation expense resulting from the departure of certain key employees of The Yes; higher outsourced services costs; and a $15.5 million increase in amortization of acquired intangible assets.
The decrease was primarily due to a $21.4 million decrease in marketing expenses, a $15.0 million decrease in amortization of acquired intangible assets, and an $11.1 million decrease due to severance and related payments resulting from the departure of certain key employee of The Yes Platform, Inc.
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 define Adjusted EBITDA as net income (loss) adjusted to exclude depreciation and amortization expense, share-based compensation expense, interest income (expense), net, other income (expense), net, provision for income taxes, restructuring charges and non-cash charitable contributions. We use Adjusted EBITDA to evaluate our operating results and for financial and operational decision-making purposes.
Cost of revenue consists primarily of expenses associated with the delivery of our service, including the cost of hosting our website and mobile application.
We recognize revenue over the service period for ads contracted on a CPD basis, which do not contain minimum impression guarantees. 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.
The program does not obligate us to repurchase any specific number of shares and may be modified, suspended or discontinued at any time.
The program does not obligate us to repurchase any specific number of shares and may be modified, suspended or discontinued at any time. The timing, manner, price and amount of any repurchases are determined by management in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions.
The increase was primarily due to higher absolute hosting costs due to higher compute utilization and an $8.0 million increase in amortization of acquired intangible assets.
The increase was primarily due to higher absolute hosting costs due to higher compute utilization offset by infrastructure efficiency initiatives.
We actively monitor the relationship of WAUs to MAUs, which has stayed relatively consistent over time. As of December 31, 2022, the proportion of WAUs to MAUs was 61%.
As of December 31, 2023, the proportion of WAUs to MAUs, which has stayed relatively consistent over time, was 61%. As of December 31, 2023, global MAUs increased compared to December 31, 2022 primarily due to our investments in relevance and personalization beginning in the second quarter of 2022. 46 Part II Trends in monetization metrics Revenue.
The increase was primarily due to a 20% increase in average headcount, which drove higher personnel expenses, as well as a $20.3 million increase in share-based compensation expense primarily due to options and restricted stock awards granted to our new Chief Executive Officer, as well as higher allocated facilities, taxes and bad debt expenses offset by $45.3 million of non-cash charitable contributions made in 2021.
The increase was primarily due to $119.4 million of restructuring charges, a $51.1 million increase in share-based compensation expense, $12.9 million in non-cash charitable contributions and a 8% increase in personnel expenses, offset by lower allocated facilities costs.
See "Risk Factors" and "Note About Forward-Looking Statements” for additional details. 44 Part II Trends in user metrics Monthly Active Users.
Refer to Note 13 to our consolidated financial statements for further information on our restructuring charges. 44 Part II Trends in user metrics Monthly Active Users.
Removed
Beginning in the first quarter of 2022, we updated the presentation of our key metrics by presenting U.S. and Canada, Europe and Rest of World separately. We believe our revised presentation provides additional details on the relative maturity of these regions we previously included within International.
Added
Restructuring In March 2023, we initiated a restructuring plan (the "Plan") intended to support our corporate strategy, improve efficiency and position our business in light of the ongoing macroeconomic environment. This included a workforce reduction of approximately 4% and a plan to sublease or abandon certain leased office spaces. The Plan was completed in the third quarter of 2023.
Removed
Specifically, we wanted to provide additional disclosure on Europe given the relative maturity of the region. As a result, we presented Canada with the U.S. given the relative maturity of our business in Canada and the similarity of the U.S. and Canada advertising markets.
Added
U.S. and Canada, Europe and Rest of World may not sum to Global and quarterly amounts may not sum to annual due to rounding. 47 Part II Average Revenue per User (“ARPU”). We measure monetization of our platform through our ARPU metric.
Removed
For comparability, we provided revenue, MAUs and ARPU data from the fourth quarter of 2020 to the fourth quarter of 2021 on the same basis.
Added
(“The Yes”) in 2022, offset by a $17.0 million increase in outsourced services costs and a 1% increase in personnel expenses.
Removed
As of December 31, 2022, global MAUs increased compared to December 31, 2021 as the negative impacts on user growth from the COVID-19 pandemic unwind and the November 2021 changes in search engine algorithms have subsided. Trends in monetization metrics Revenue.
Added
Other i ncome ( e xpense), n et Year Ended December 31, 2023 2022 % change (in thousands) Interest income (expense), net $ 105,439 $ 30,235 249% Other income (expense), net 3,799 (14,502) 126% Interest and other income (expense), net $ 109,238 $ 15,733 594% Interest and other income (expense), net for the year ended December 31, 2023 increased by $93.5 million compared to the year ended December 31, 2022, primarily due to higher returns on our marketable securities as a result of higher interest rates and foreign currency exchange gains.
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Quarterly revenue (in millions) 46 Part II Note: Revenue by geography in the charts above is geographically apportioned based on our estimate of users' geographic location when they perform a revenue-generating activity.
Added
As of December 31, 2023, $130.1 million of our cash and cash equivalents was held by our foreign subsidiaries.
Removed
For the year ended December 31, 2022, U.S. and Canada ARPU was $24.38, an increase of 16%, Europe ARPU was $3.23, an increase of 7%, and Rest of World ARPU was $0.43, an increase of 49% compared to the year ended December 31, 2021.
Added
In October 2023, we amended the 2022 revolving credit facility to increase our aggregate commitment to $500.0 million and reduce our accordion option from $405.0 million to $305.0 million.
Removed
Europe revenue increased by 4% to $397.9 million primarily due to an increase in the number of advertisements served offset by foreign exchange and macroeconomic headwinds, and Rest of World revenue increased by 52% to $95.3 million driven by an 49% increase in Rest of World ARPU.
Added
We have not issued any letters of credit and are in compliance with all covenants under the 2022 revolving credit facility as of December 31, 2023.
Removed
Other income (expense), net Year Ended December 31, 2022 2021 % change (in thousands) Interest income $ 30,943 $ 4,204 636% Interest expense and other income (expense) (15,210) (9,420) 61% Other income (expense), net $ 15,733 $ (5,216) (402) % Other income (expense), net for the year ended December 31, 2022 increased by $20.9 million compared to the year ended December 31, 2021.
Added
As of December 31, 2023, $1.0 billion remains available for repurchases under the stock repurchase program.
Removed
The increase was primarily due to higher returns on our cash equivalents and marketable securities offset by foreign currency exchange losses.
Added
We recognize revenue only after satisfying our contractual performance obligations. We occasionally offer customers free ad inventory.
Removed
As of December 31, 2022, $110.5 million of our cash and cash equivalents was held by our foreign subsidiaries. In October 2022, we entered into an amended and restated five-year $400.0 million revolving credit facility (the “2022 revolving credit facility”), which replaced our previous $500.0 million revolving credit facility entered into in November 2018.
Removed
On February 2, 2023, our board of directors authorized a stock repurchase program of up to $500 million of our Class A common stock over the next 12 months.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed5 unchanged
Biggest changeA hypothetical 100 basis point increase in interest rates would have decreased the market value of our cash equivalents and marketable securities by $5.2 million and $5.4 million as of December 31, 2022 and 2021, respectively. 57 Part II
Biggest changeA hypothetical 100 basis point increase in interest rates would have decreased the market value of our cash equivalents and marketable securities by $6.6 million and $5.2 million as of December 31, 2023 and 2022, respectively. 58 Part II
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, 2022, 2021 and 2020.
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, 2023, 2022 and 2021.
Interest rate risk As of December 31, 2022, we held cash, cash equivalents and marketable securities of $2,698.2 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.
Interest rate risk As of December 31, 2023, we held cash, cash equivalents and marketable securities of $2,511.1 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.

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