Add a note by highlighting text or Replying to an existing note.
Add a note by highlighting text or Replying to an existing note.
Three Months Ended March 31, |
|||||||
In millions, except percentages and per share amounts |
2015 |
2014 |
|||||
Revenue |
$ |
3,543 |
$ |
2,502 |
|||
Income from Operations |
|||||||
GAAP |
$ |
933 |
$ |
1,075 |
|||
Non-GAAP* |
$ |
1,840 |
$ |
1,415 |
|||
Operating Margin |
|||||||
GAAP |
26 |
% |
43 |
% |
|||
Non-GAAP* |
52 |
% |
57 |
% |
|||
Net Income |
|||||||
GAAP |
$ |
512 |
$ |
642 |
|||
Non-GAAP* |
$ |
1,189 |
$ |
926 |
|||
Diluted Earnings per Share (EPS) |
|||||||
GAAP |
$ |
0.18 |
$ |
0.25 |
|||
Non-GAAP* |
$ |
0.42 |
$ |
0.35 |
• |
Daily active users (DAUs) were 936 million on average for March 2015, an increase of 17% year-over-year.
|
• |
Mobile DAUs were 798 million on average for March 2015, an increase of 31% year-over-year.
|
• |
Monthly active users (MAUs) were 1.44 billion as of March 31, 2015, an increase of 13% year-over-year.
|
• |
Mobile MAUs were 1.25 billion as of March 31, 2015, an increase of 24% year-over-year.
|
• |
Revenue from advertising was $3.32 billion, a 46% increase from the same quarter last year. Excluding the impact of year-over-year changes in foreign exchange rates, revenue from advertising would have increased by 55%.
|
• |
Mobile advertising revenue represented approximately 73% of advertising revenue for the first quarter of 2015, up from approximately 59% of advertising revenue in the first quarter of 2014.
|
• |
Payments and other fees revenue was $226 million, a 5% decrease from the same quarter last year.
|
FACEBOOK, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||
(In millions, except for per share amounts) | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, |
|||||||
2015 |
2014 |
||||||
Revenue |
$ |
3,543 |
$ |
2,502 |
|||
Costs and expenses: |
|||||||
Cost of revenue |
654 |
462 |
|||||
Research and development |
1,062 |
455 |
|||||
Marketing and sales |
620 |
323 |
|||||
General and administrative |
274 |
187 |
|||||
Total costs and expenses |
2,610 |
1,427 |
|||||
Income from operations |
933 |
1,075 |
|||||
Interest and other income/(expense), net |
(1 |
) |
— |
||||
Income before provision for income taxes |
932 |
1,075 |
|||||
Provision for income taxes |
420 |
433 |
|||||
Net income |
$ |
512 |
$ |
642 |
|||
Less: Net income attributable to participating securities |
3 |
3 |
|||||
Net income attributable to Class A and Class B common stockholders |
$ |
509 |
$ |
639 |
|||
Earnings per share attributable to Class A and Class B common stockholders: |
|||||||
Basic |
$ |
0.18 |
$ |
0.25 |
|||
Diluted |
$ |
0.18 |
$ |
0.25 |
|||
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders: |
|||||||
Basic |
2,784 |
2,545 |
|||||
Diluted |
2,836 |
2,609 |
|||||
Share-based compensation expense included in costs and expenses: |
|||||||
Cost of revenue |
$ |
17 |
$ |
12 |
|||
Research and development |
566 |
181 |
|||||
Marketing and sales |
72 |
43 |
|||||
General and administrative |
48 |
38 |
|||||
Total share-based compensation expense |
$ |
703 |
$ |
274 |
|||
Payroll tax expenses related to share-based compensation included in costs and expenses: |
|||||||
Cost of revenue |
$ |
1 |
$ |
2 |
|||
Research and development |
17 |
15 |
|||||
Marketing and sales |
4 |
4 |
|||||
General and administrative |
3 |
4 |
|||||
Total payroll tax expenses related to share-based compensation |
$ |
25 |
$ |
25 |
|||
Amortization of intangible assets included in costs and expenses: |
|||||||
Cost of revenue |
$ |
44 |
$ |
8 |
|||
Research and development |
10 |
8 |
|||||
Marketing and sales |
102 |
1 |
|||||
General and administrative |
23 |
24 |
|||||
Total amortization of intangible assets |
$ |
179 |
$ |
41 |
FACEBOOK, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
March 31, 2015 |
December 31, 2014 |
||||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
3,419 |
$ |
4,315 |
|||||
Marketable securities |
8,994 |
6,884 |
|||||||
Accounts receivable, net of allowances for doubtful accounts of $42 and $39 as of March 31, 2015 and December 31, 2014, respectively |
1,508 |
1,678 |
|||||||
Prepaid expenses and other current assets |
1,083 |
793 |
|||||||
Total current assets |
15,004 |
13,670 |
|||||||
Property and equipment, net |
4,619 |
3,967 |
|||||||
Intangible assets, net |
3,774 |
3,929 |
|||||||
Goodwill |
18,005 |
17,981 |
|||||||
Other assets |
605 |
637 |
|||||||
Total assets |
$ |
42,007 |
$ |
40,184 |
|||||
Liabilities and stockholders' equity |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
129 |
$ |
176 |
|||||
Partners payable |
189 |
202 |
|||||||
Accrued expenses and other current liabilities |
1,300 |
866 |
|||||||
Deferred revenue and deposits |
55 |
66 |
|||||||
Current portion of capital lease obligations |
73 |
114 |
|||||||
Total current liabilities |
1,746 |
1,424 |
|||||||
Capital lease obligations, less current portion |
113 |
119 |
|||||||
Other liabilities |
2,647 |
2,545 |
|||||||
Total liabilities |
4,506 |
4,088 |
|||||||
Stockholders' equity |
|||||||||
Common stock and additional paid-in capital |
31,337 |
30,225 |
|||||||
Accumulated other comprehensive loss |
(447 |
) |
(228 |
) |
|||||
Retained earnings |
6,611 |
6,099 |
|||||||
Total stockholders' equity |
37,501 |
36,096 |
|||||||
Total liabilities and stockholders' equity |
$ |
42,007 |
$ |
40,184 |
FACEBOOK, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In millions) | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, |
|||||||
2015 |
2014 |
||||||
Cash flows from operating activities |
|||||||
Net income |
$ |
512 |
$ |
642 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation and amortization |
457 |
264 |
|||||
Share-based compensation |
694 |
274 |
|||||
Deferred income taxes |
(223 |
) |
(1 |
) |
|||
Tax benefit from share-based award activity |
423 |
345 |
|||||
Excess tax benefit from share-based award activity |
(423 |
) |
(348 |
) |
|||
Other |
6 |
(4 |
) |
||||
Changes in assets and liabilities: |
|||||||
Accounts receivable |
84 |
105 |
|||||
Prepaid expenses and other current assets |
(43 |
) |
(4 |
) |
|||
Other assets |
(32 |
) |
16 |
||||
Accounts payable |
(15 |
) |
(10 |
) |
|||
Partners payable |
(13 |
) |
7 |
||||
Accrued expenses and other current liabilities |
134 |
(27 |
) |
||||
Deferred revenue and deposits |
(10 |
) |
— |
||||
Other liabilities |
149 |
26 |
|||||
Net cash provided by operating activities |
1,700 |
1,285 |
|||||
Cash flows from investing activities |
|||||||
Purchases of property and equipment |
(502 |
) |
(363 |
) |
|||
Purchases of marketable securities |
(3,055 |
) |
(2,974 |
) |
|||
Sales of marketable securities |
608 |
847 |
|||||
Maturities of marketable securities |
339 |
619 |
|||||
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets |
(257 |
) |
— |
||||
Change in restricted cash and deposits |
23 |
— |
|||||
Other investing activities, net |
— |
(1 |
) |
||||
Net cash used in investing activities |
(2,844 |
) |
(1,872 |
) |
|||
Cash flows from financing activities |
|||||||
Taxes paid related to net share settlement |
(5 |
) |
(3 |
) |
|||
Proceeds from exercise of stock options |
— |
1 |
|||||
Principal payments on capital lease obligations |
(47 |
) |
(84 |
) |
|||
Excess tax benefit from share-based award activity |
423 |
348 |
|||||
Net cash provided by financing activities |
371 |
262 |
|||||
Effect of exchange rate changes on cash and cash equivalents |
(123 |
) |
— |
||||
Net decrease in cash and cash equivalents |
(896 |
) |
(325 |
) |
|||
Cash and cash equivalents at beginning of period |
4,315 |
3,323 |
|||||
Cash and cash equivalents at end of period |
$ |
3,419 |
$ |
2,998 |
FACEBOOK, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In millions) | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, |
|||||||
2015 |
2014 |
||||||
Supplemental cash flow data |
|||||||
Cash paid during the period for: |
|||||||
Interest |
$ |
3 |
$ |
4 |
|||
Income taxes, net |
$ |
119 |
$ |
37 |
|||
Non-cash investing and financing activities: |
|||||||
Net change in accounts payable and accrued expenses and other current liabilities related to property and equipment additions |
$ |
186 |
$ |
(3 |
) |
||
Promissory note payable issued in connection with an acquisition |
$ |
198 |
$ |
— |
Reconciliation of Non-GAAP Results to Nearest GAAP Measures | ||||||||
(In millions, except percentages and per share amounts) | ||||||||
(Unaudited) | ||||||||
Three Months Ended March 31, |
||||||||
2015 |
2014 |
|||||||
GAAP revenue |
$ |
3,543 |
$ |
2,502 |
||||
Foreign exchange effect on 2015 revenue using 2014 rates |
188 |
|||||||
Revenue excluding foreign exchange effect |
$ |
3,731 |
||||||
GAAP revenue year-over-year change % |
42 |
% |
||||||
Revenue excluding foreign exchange effect year-over-year change % |
49 |
% |
||||||
GAAP advertising revenue |
$ |
3,317 |
$ |
2,265 |
||||
Foreign exchange effect on 2015 advertising revenue using 2014 rates |
188 |
|||||||
Advertising revenue excluding foreign exchange effect |
$ |
3,505 |
||||||
GAAP advertising revenue year-over-year change % |
46 |
% |
||||||
Advertising revenue excluding foreign exchange effect year-over-year change % |
55 |
% |
||||||
GAAP costs and expenses |
$ |
2,610 |
$ |
1,427 |
||||
Share-based compensation expense |
(703 |
) |
(274 |
) |
||||
Payroll tax expenses related to share-based compensation |
(25 |
) |
(25 |
) |
||||
Amortization of intangible assets |
(179 |
) |
(41 |
) |
||||
Non-GAAP costs and expenses |
$ |
1,703 |
$ |
1,087 |
||||
GAAP income from operations |
$ |
933 |
$ |
1,075 |
||||
Share-based compensation expense |
703 |
274 |
||||||
Payroll tax expenses related to share-based compensation |
25 |
25 |
||||||
Amortization of intangible assets |
179 |
41 |
||||||
Non-GAAP income from operations |
$ |
1,840 |
$ |
1,415 |
||||
GAAP net income |
$ |
512 |
$ |
642 |
||||
Share-based compensation expense |
703 |
274 |
||||||
Payroll tax expenses related to share-based compensation |
25 |
25 |
||||||
Amortization of intangible assets |
179 |
41 |
||||||
Income tax adjustments |
(230 |
) |
(56 |
) |
||||
Non-GAAP net income |
$ |
1,189 |
$ |
926 |
||||
GAAP and Non-GAAP diluted shares |
2,836 |
2,609 |
||||||
GAAP diluted earnings per share |
$ |
0.18 |
$ |
0.25 |
||||
Non-GAAP adjustments to net income |
0.24 |
0.10 |
||||||
Non-GAAP diluted earnings per share |
$ |
0.42 |
$ |
0.35 |
||||
GAAP operating margin |
26 |
% |
43 |
% |
||||
Share-based compensation expense |
20 |
% |
11 |
% |
||||
Payroll tax expenses related to share-based compensation |
1 |
% |
1 |
% |
||||
Amortization of intangible assets |
5 |
% |
2 |
% |
||||
Non-GAAP operating margin |
52 |
% |
57 |
% |
||||
GAAP income before provision for income taxes |
$ |
932 |
$ |
1,075 |
||||
GAAP provision for income taxes |
420 |
433 |
||||||
GAAP effective tax rate |
45 |
% |
40 |
% |
||||
GAAP income before provision for income taxes |
$ |
932 |
$ |
1,075 |
||||
Share-based compensation and related payroll tax expenses |
728 |
299 |
||||||
Amortization of intangible assets |
179 |
41 |
||||||
Non-GAAP income before provision for income taxes |
$ |
1,839 |
$ |
1,415 |
||||
Non-GAAP provision for income taxes |
650 |
489 |
||||||
Non-GAAP effective tax rate |
35 |
% |
35 |
% |
Net cash provided by operating activities |
$ |
1,700 |
$ |
1,285 |
||||
Purchases of property and equipment |
(502 |
) |
(363 |
) |
||||
Free cash flow |
$ |
1,198 |
$ |
922 |