Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Upcoming SlideShare
My stox persona presentation v2
Next
Download to read offline and view in fullscreen.

6

Share

Facebook Q4 2012 Quarterly Earnings

Download to read offline

Related Books

Free with a 30 day trial from Scribd

See all

Related Audiobooks

Free with a 30 day trial from Scribd

See all

Facebook Q4 2012 Quarterly Earnings

  1. Quarterly Earnings Slides Q4 2012
  2. Safe Harbor In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation of non-GAAP financial measures to the corresponding GAAP measures is provided in the appendix to this presentation. Please also see the appendix to this presentation for information concerning limitations of our key user metrics.
  3. Monthly Active Users (MAUs) Millions of MAUs 1,056 Rest of World 1,007 Asia 955 Europe 901 845 304 US & Canada 288 800 739 268 245 680 225 207 608 183 161 277 298 133 234 255 196 212 174 156 138 239 246 253 261 212 221 229 183 201 154 163 169 176 179 183 186 189 193 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Please see Facebook's Form 10-K for the year ended December 31, 2012 for definitions of user activity used to determine the number of our MAUs, DAUs and mobile MAUs. The number of MAUs, DAUs, and mobile MAUs do not include Instagram users unless such users would otherwise qualify as MAUs, DAUs, and mobile MAUs based on activity that is shared back to Facebook. In June 2012, we discovered an error in the algorithm we used to estimate the geographic location of our users that affected our attribution of certain user locations for the first quarter of 2012. The first quarter of 2012 user metrics reflect a reclassification to more correctly attribute users by geographic region. 3
  4. Daily Active Users (DAUs) Millions of DAUs 618 584 Rest of World 552 Asia 526 161 Europe 483 152 457 139 US & Canada 417 126 109 372 100 87 153 327 129 141 74 119 98 105 58 85 72 64 152 154 160 169 135 143 120 127 107 105 117 124 126 129 130 132 135 99 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 DAUs / MAUs Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 54% 55% 56% 57% 57% 58% 58% 58% 59% Please see Facebook's Form 10-K for the year ended December 31, 2012 for definitions of user activity used to determine the number of our MAUs, DAUs and mobile MAUs. The number of MAUs, DAUs, and mobile MAUs do not include Instagram users unless such users would otherwise qualify as MAUs, DAUs, and mobile MAUs based on activity that is shared back to Facebook. For non-worldwide DAU user numbers presented for the periods marked March 31, 2012 and June 30, 2012, the figures represent an average of the first 25 days of the period and the last 27 days of the period, respectively, due to the algorithm error described in the MAU note on slide 3. These average numbers do not meaningfully differ from the average numbers when calculated over a full month. 4
  5. Mobile Monthly Active Users (Mobile MAUs) Millions of Mobile MAUs 680 604 543 488 432 376 325 288 245 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Please see Facebook's Form 10-K for the year ended December 31, 2012 for definitions of user activity used to determine the number of our MAUs, DAUs and mobile MAUs. The number of MAUs, DAUs, and mobile MAUs do not include Instagram users unless such users would otherwise qualify as MAUs, DAUs, and mobile MAUs based on activity that is shared back to Facebook. 5
  6. Mobile Only Monthly Active Users (Mobile Only MAUs) Millions of Mobile Only MAUs 157 126 102 83 58 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Mobile Only MAUs are mobile MAUs that accessed Facebook solely through mobile apps or our mobile website. 6
  7. Revenue $5,089 Millions of Dollars $1,585 Payments and other fees $810 Advertising $256 $1,262 $3,711 $1,184 $1,131 $176 $1,058 $557 $192 $954 $188 $895 $186 $156 $731 $731 $119 $1,974 $4,279 $76 $94 $1,329 $106 $1,086 $3,154 $943 $992 $872 $776 $798 $655 $637 $1,868 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 2010 2011 2012 Quarterly Annual 7
  8. Revenue by User Geography Millions of Dollars $1,585 $5,089 Rest of World $497 $167 Asia $605 Europe $1,262 $198 US & Canada $1,184 $3,711 $1,131 $130 $277 $87 $1,058 $113 $154 $363 $1,455 $954 $115 $87 $135 $440 $895 $78 $118 $65 $731 $731 $104 $341 $1,155 $82 $346 $43 $47 $361 $1,974 $58 $328 $62 $290 $101 $275 $148 $218 $229 $577 $780 $2,532 $590 $637 $1,914 $567 $525 $471 $482 $412 $394 $1,146 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 2010 2011 2012 Quarterly Annual Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the advertiser or developer. 8
  9. Advertising Revenue by User Geography Millions of Dollars $1,329 Rest of World $156 Asia Europe $1,086 $168 US & Canada $992 $120 $943 $872 $104 $79 $133 $776 $798 $79 $115 $95 $374 $655 $61 $71 $99 $637 $88 $295 $41 $74 $44 $306 $294 $53 $56 $274 $245 $245 $201 $206 $631 $479 $538 $462 $419 $359 $394 $395 $332 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the advertiser or developer. 9
  10. Payments & Other Revenue by User Geography Millions of Dollars $256 Rest of World $11 Asia $30 Europe US & Canada $188 $186 $192 $8 $8 $9 $176 $66 $20 $19 $20 $10 $156 $7 $21 $119 $16 $52 $55 $54 $4 $46 $94 $8 $45 $76 $3 $6 $30 $2 $5 $23 $149 $17 $105 $106 $111 $99 $77 $87 $53 $62 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the advertiser or developer. 10
  11. Payments Revenue Recognition Timing Payments terms and conditions provide for a 30- As of Q4 2012, we had 24 months of historical day claim period following a Payments transaction transactional information. As a result, starting during which the customer may dispute the in Q4 2012 we recorded all Payments revenues transaction. in the month the transaction occurs, net of estimated refunds or chargebacks. In Q3 2012 and prior, due to insufficient This change resulted in a one-time transaction history, Payments revenues were increase in Payments revenue in recognized after the claim period lapsed. the fourth quarter as we For example, transactions occurring in June recognized revenue from an extra were recognized as revenue 30 days later, in month of payments transactions July, and included in Q3 2012 revenue. (those occurring in September Therefore, Q3 2012 revenue reflects through December.) transactions that occurred during the months of June, July and August. June Jul Aug Sept Oct Nov Dec Jan Feb Mar Q 3 2012 Q 4 2012 Q1 2013 11
  12. Average Revenue per User (ARPU) Worldwide US & Canada $1.54 $1.38 $3.40 $4.08 $5.32 $3.20 $3.20 $5.02 $13.58 $2.90 $1.29 $11.33 $1.28 $3.97 $8.34 $1.21 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 2010 2011 2012 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 2010 2011 2012 Europe Asia Rest of World $1.71 $1.60 $0.47 $0.56 $1.84 $0.44 $5.91 $2.35 $1.40 $1.43 $1.37 $5.46 $0.41 $2.05 $0.37 $1.50 $3.75 $1.49 $0.94 $0.69 $0.56 $0.53 $0.55 $0.58 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 2010 2011 2012 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 2010 2011 2012 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 2010 2011 2012 Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the advertiser or developer. The ARPU amount for US & Canada region in Q1 2012 reflects an adjustment based on the reclassification of certain users between geographical regions to more correctly attribute users by geographic region. Please see Facebook's Form 10-K for the year ended December 31, 2012 for definitions of ARPU and annual ARPU. 12
  13. Share-Based Compensation Expense $1,106 Millions of Dollars Pre-2011 RSUs Post-2011 RSUs Options & Other $986 $179 $184 $28 $24 $103 $64 $70 $76 $138 $137 $6 $7 $97 $113 $58 $59 $74 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q4 2012 expenses are estimates and exclude any potential impact of future acquisitions. 13
  14. Expenses as a % of Revenue Share-based compensation + Payroll tax related to share-based compensation All other expenses Cost of Revenue Research & Development 31% 60% 26% 26% 26% 22% 26% 25% 25% 25% 19% 19% 22% 14% 11% 7% 9% 9% 11% 10% Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Marketing & Sales General & Administrative 33% 39% 14% 13% 12% 11% 12% 11% 8% 10% 9% 12% 11% 12% 10% 11% 10% 7% 8% 9% Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 We have reclassified certain prior period amounts in marketing and sales to general and administrative expense to conform to our current period presentation. These reclassifications did not affect revenue, total costs and expenses, income (loss) from operations, or net (loss) income. 14
  15. GAAP Income (Loss) from Operations & Margin Income (Loss) from Operations ($M) $437 $548 $523 $388 $407 $414 $381 $377 ($743) Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Operating Margin 60% 53% 48% 45% 43% 36% 33% 30% (63%) Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 15
  16. Effective Tax Rate (in millions) Q1 Q2 Q3 Q4 2012 2012 2012 2012 2011 2012 Revenue $ 1,058 $ 1,184 $ 1,262 $ 1,585 $ 3,711 $ 5,089 Costs and expenses: Cost of revenue 277 367 322 398 860 1,364 Research and development 153 705 244 297 388 1,399 Marketing and sales 143 392 168 193 393 896 General and administrative 104 463 151 174 314 892 Total costs and expenses 677 1,927 885 1,062 1,955 4,551 Income from operations 381 (743) 377 523 1,756 538 Interest and other income (expense), net Interest expense (13) (10) (11) (16) (42) (51) Other income (expense), net 14 (12) 6 (2) (19) 7 Income (loss) before provision for income taxes 382 (765) 372 505 1,695 494 Provision for (benefit from) income taxes 177 (608) 431 441 695 441 Net income (loss) $ 205 $ (157) $ (59) $ 64 $ 1,000 $ 53 Effective Tax Rate 46% 79% 116% 87% 41% 89% Q2 through Q4 effective tax rates were influenced by significant share-based compensation expense resulting from our initial public offering, a portion of which is not tax-deductible 16
  17. GAAP Net Income (Loss) Millions of Dollars $302 $251 $240 $233 $227 $205 $64 ($59) ($157) Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 17
  18. Non-GAAP Net Income Millions of Dollars $1,317 $1,164 $426 $360 Q4 2011 Q4 2012 2011 2012 Quarterly Annual Non-GAAP net income excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and related income tax adjustments—see the Appendix for a reconciliation of this non-GAAP measure to GAAP net income. 18
  19. Capital Investments Millions of Dollars $1,575 Property and equipment acquired under capital leases $340 Purchases of property and equipment $1,079 $473 $510 $1,235 $217 $606 $89 $293 $56 $33 2009 2010 2011 2012 Annual 19
  20. Employees Period-end Headcount 4,619 3,200 2,127 1,218 2009 2010 2011 2012 Annual 20
  21. Appendix
  22. Reconciliations Three Months Ended Year Ended December 31, December 31, 2011 2012 2011 2012 GAAP net income $ 302 $ 64 $ 1,000 $ 53 Share-based compensation expense 76 184 217 1,572 Payroll tax expenses related to share-based compensation - 29 7 151 Income tax adjustments (18) 149 (60) (459) Non-GAAP net income $ 360 $ 426 $ 1,164 $ 1,317 22
  23. Limitations of Key Metrics The numbers of our monthly active users (MAUs) and daily active users (DAUs) and average revenue per user (ARPU) are calculated using internal company data based on the activity of user accounts. While these numbers are based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring usage of our products across large online and mobile populations around the world. For example, there may be individuals who maintain one or more Facebook accounts in violation of our terms of service, despite our efforts to detect and suppress such behavior. We estimate, for example, that “duplicate” accounts (an account that a user maintains in addition to his or her principal account) may have represented approximately 5.0% of our worldwide MAUs as of December 31, 2012. We also seek to identify “false” accounts, which we divide into two categories: (1) user-misclassified accounts, where users have created personal profiles for a business, organization, or non-human entity such as a pet (such entities are permitted on Facebook using a Page rather than a personal profile under our terms of service); and (2) undesirable accounts, which represent user profiles that we determine are intended to be used for purposes that violate our terms of service, such as spamming. As of December 31, 2012, for example, we estimate user- misclassified accounts may have represented approximately 1.3% of our worldwide MAUs and undesirable accounts may have represented approximately 0.9% of our worldwide MAUs. We believe the percentage of accounts that are duplicate or false is meaningfully lower in developed markets such as the United States or Australia and higher in developing markets such as Indonesia and Turkey. However, these estimates are based on an internal review of a limited sample of accounts and we apply significant judgment in making this determination, such as identifying names that appear to be fake or other behavior that appears inauthentic to the reviewers. As such, our estimation of duplicate or false accounts may not accurately represent the actual number of such accounts. We are continually seeking to improve our ability to identify duplicate or false accounts and estimate the total number of such accounts, and such estimates may be affected by improvements or changes in our methodology. 23
  24. Limitations of Key Metrics (continued) Some of our historical metrics through the second quarter of 2012 have also been affected by applications on certain mobile devices that automatically contact our servers for regular updates with no user action involved, and this activity can cause our system to count the user associated with such a device as an active user on the day such contact occurs. For example, we estimate that less than 5% of our estimated worldwide DAUs as of December 31, 2011 and 2010 resulted from this type of automatic mobile activity, and that this type of activity had a substantially smaller effect on our estimate of worldwide MAUs and mobile MAUs. The impact of this automatic activity on our metrics varies by geography because mobile usage varies in different regions of the world. In addition, our data regarding the geographic location of our users is estimated based on a number of factors, such as the user’s IP address and self-disclosed location. These factors may not always accurately reflect the user’s actual location. For example, a mobile-only user may appear to be accessing Facebook from the location of the proxy server that the user connects to rather than from the user’s actual location. The methodologies used to measure user metrics may also be susceptible to algorithm or other technical errors. For example, in early June 2012, we discovered an error in the algorithm we used to estimate the geographic location of our users that affected our attribution of certain user locations for the period ended March 31, 2012. While this issue did not affect our overall worldwide MAU number, it did affect our attribution of users to different geographic regions. We estimate that the number of MAUs as of March 31, 2012 for the United States & Canada region was overstated as a result of the error by approximately 3% and these overstatements were offset by understatements in other regions. In addition, our estimates for revenue by user location are also affected by these factors. We regularly review and may adjust our processes for calculating these metrics to improve their accuracy. In addition, our MAU and DAU estimates will differ from estimates published by third parties due to differences in methodology. For example, some third parties are not able to accurately measure mobile users or do not count mobile users for certain user groups or at all in their analyses. The number of MAUs, DAUs, mobile MAUs, and ARPU discussed in these slides do not include users of Instagram unless such users would otherwise quality as MAUs, DAUs, and mobile MAUs, respectively, based on activity that is shared back to Facebook. 24
  • MichaelBronfman

    Feb. 9, 2015
  • bbrfirm

    Feb. 23, 2013
  • romatimchenko

    Feb. 1, 2013
  • chrisek

    Feb. 1, 2013
  • mistyket

    Feb. 1, 2013
  • mustafaduran

    Jan. 31, 2013

Views

Total views

28,657

On Slideshare

0

From embeds

0

Number of embeds

5,346

Actions

Downloads

76

Shares

0

Comments

0

Likes

6

×