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"For the year ended December 31, 2018, we generated revenue of $755.9 million, as compared to $472.9 million for the same period in 2017, representing year-over

"For the year ended December 31, 2018, we generated revenue of $755.9 million, as compared to $472.9 million for the same period in 2017, representing year-over-year growth of 60%. For the year ended December 31, 2018, we generated a net loss of $63.0 million and Adjusted EBITDA of $(39.0) million, as compared to a net loss of $130.0 million and Adjusted EBITDA of $(93.0) million, respectively, in the same period in 2017"

grivescorbett 8y ago
Curious how this would change if R&D was capitalized. Of course it would just make ebitda a less accurate proxy for cash flow but we’d still be looking at it very differently.
- samcampbell 8y ago
  R&D was $208M in 2017 and $252M in 2018, which was about 45% and 33% of revenue, respectively.
  - grivescorbett 8y ago
    Thanks on my mobile. So revenue grows at 1.5x while R&D grows at 1.2x. Having that asset on your B/S looks pretty good over a few years.
    - shoo 8y ago
      assuming that the R&D expenses largely convert into some kind of assets. edit: is anyone able to comment how the accounting for this kind of thing usually works? e.g. if a company spent $1m on R&D, can it arbitrarily add a line item on its balance sheet for around $1m of research outputs as some flavour of intangible asset? (this is obviously not a very accurate way to account for things in cases where the R&D failed to produce anything of utility, or produced much less utility that the R&D cost) or are the assets produced by R&D (if any) meant to be fairly valued in isolation from the cost to produce them?
      - grivescorbett 8y ago
        This is called capitalizing. Companies are not allowed to do it with R&D under GAAP. But it gets tricky when one company can build a factory, call it capex, and spread the expense over 10 years. Whereas another builds software infra and must expense 100% immediately.
GordonS 8y ago
Wow, I would love to know how they can make so much revenue and make a loss. I only know Pinterest from annoying search results where it immediately asks you to sign up for an account, and I immediately leave - does anyone have any insights into how on earth they are spending almost a billion dollars in a year?

grivescorbett 8y ago

Curious how this would change if R&D was capitalized. Of course it would just make ebitda a less accurate proxy for cash flow but we’d still be looking at it very differently.

samcampbell 8y ago
R&D was $208M in 2017 and $252M in 2018, which was about 45% and 33% of revenue, respectively.
- grivescorbett 8y ago
  Thanks on my mobile. So revenue grows at 1.5x while R&D grows at 1.2x. Having that asset on your B/S looks pretty good over a few years.
  - shoo 8y ago
    assuming that the R&D expenses largely convert into some kind of assets. edit: is anyone able to comment how the accounting for this kind of thing usually works? e.g. if a company spent $1m on R&D, can it arbitrarily add a line item on its balance sheet for around $1m of research outputs as some flavour of intangible asset? (this is obviously not a very accurate way to account for things in cases where the R&D failed to produce anything of utility, or produced much less utility that the R&D cost) or are the assets produced by R&D (if any) meant to be fairly valued in isolation from the cost to produce them?
    - grivescorbett 8y ago
      This is called capitalizing. Companies are not allowed to do it with R&D under GAAP. But it gets tricky when one company can build a factory, call it capex, and spread the expense over 10 years. Whereas another builds software infra and must expense 100% immediately.

GordonS 8y ago

Wow, I would love to know how they can make so much revenue and make a loss. I only know Pinterest from annoying search results where it immediately asks you to sign up for an account, and I immediately leave - does anyone have any insights into how on earth they are spending almost a billion dollars in a year?