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Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
In millions, except percentages and per share amounts |
2015 |
2014 |
2015 |
2014 |
|||||||||||
Revenue |
$ |
5,841 |
$ |
3,851 |
$ |
17,928 |
$ |
12,466 |
|||||||
Income from Operations |
|||||||||||||||
GAAP |
$ |
2,560 |
$ |
1,133 |
$ |
6,225 |
$ |
4,994 |
|||||||
Non-GAAP* |
$ |
3,523 |
$ |
2,219 |
$ |
10,001 |
$ |
7,207 |
|||||||
Operating Margin |
|||||||||||||||
GAAP |
44 |
% |
29 |
% |
35 |
% |
40 |
% |
|||||||
Non-GAAP* |
60 |
% |
58 |
% |
56 |
% |
58 |
% |
|||||||
Net Income |
|||||||||||||||
GAAP |
$ |
1,562 |
$ |
701 |
$ |
3,688 |
$ |
2,940 |
|||||||
Non-GAAP* |
$ |
2,265 |
$ |
1,518 |
$ |
6,518 |
$ |
4,713 |
|||||||
Diluted Earnings per Share (EPS) |
|||||||||||||||
GAAP |
$ |
0.54 |
$ |
0.25 |
$ |
1.29 |
$ |
1.10 |
|||||||
Non-GAAP* |
$ |
0.79 |
$ |
0.54 |
$ |
2.28 |
$ |
1.77 |
* |
Non-GAAP financial measures exclude amortization of intangible assets, share-based compensation and related payroll tax expenses. Non-GAAP net income and EPS also exclude the income tax effects of these non-GAAP adjustments. See the table below titled "Reconciliation of Non-GAAP Results to Nearest GAAP Measures." |
• |
Revenue – Revenue for the full year 2015 was $17.93 billion, an increase of 44% year-over-year.
|
• |
Income from operations – Income from operations for the full year 2015 was $6.23 billion.
|
• |
Net income – Net income for the full year 2015 was $3.69 billion.
|
• |
Free cash flow – Free cash flow for the full year 2015 was $6.08 billion.
|
• |
Daily active users (DAUs) – DAUs were 1.04 billion on average for December 2015, an increase of 17% year-over-year.
|
• |
Mobile DAUs – Mobile DAUs were 934 million on average for December 2015, an increase of 25% year-over-year.
|
• |
Monthly active users (MAUs) – MAUs were 1.59 billion as of December 31, 2015, an increase of 14% year-over-year.
|
• |
Mobile MAUs – Mobile MAUs were 1.44 billion as of December 31, 2015, an increase of 21% year-over-year.
|
GAAP |
Year-over-Year % Change |
|||||||||
Three Months Ended December 31, |
||||||||||
In millions, except percentages and per share amounts |
2015 |
2014 |
||||||||
Revenue: |
||||||||||
Advertising(1)
|
$ |
5,637 |
$ |
3,594 |
57 |
% |
||||
Payments and other fees |
204 |
257 |
(21 |
)% |
||||||
Total revenue(2)
|
5,841 |
3,851 |
52 |
% |
||||||
Total costs and expenses |
3,281 |
2,718 |
21 |
% |
||||||
Income from operations |
$ |
2,560 |
$ |
1,133 |
126 |
% |
||||
Operating margin |
44 |
% |
29 |
% |
||||||
Provision for income taxes |
995 |
|||||||||
Effective tax rate |
39 |
% |
||||||||
Net income |
$ |
1,562 |
$ |
701 |
123 |
% |
||||
Diluted EPS |
$ |
0.54 |
$ |
0.25 |
116 |
% |
Non-GAAP |
Year-over-Year % Change |
|||||||||
Three Months Ended December 31, |
||||||||||
In millions, except percentages and per share amounts |
2015 |
2014 |
||||||||
GAAP revenue |
$ |
5,841 |
$ |
3,851 |
52 |
% |
||||
Total costs and expenses |
2,318 |
1,632 |
42 |
% |
||||||
Income from operations |
$ |
3,523 |
$ |
2,219 |
59 |
% |
||||
Operating margin |
60 |
% |
58 |
% |
||||||
Effective tax rate |
36 |
% |
||||||||
Net income |
$ |
2,265 |
$ |
1,518 |
49 |
% |
||||
Diluted EPS |
$ |
0.79 |
$ |
0.54 |
46 |
% |
• |
Mobile advertising revenue – Mobile advertising revenue represented approximately 80% of advertising revenue for the fourth quarter of 2015, up from 69% of advertising revenue in the fourth quarter of 2014.
|
• |
Capital expenditures – Capital expenditures for the fourth quarter of 2015 were $692 million.
|
• |
Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $18.43 billion at the end of the fourth quarter of 2015.
|
• |
Free cash flow – Free cash flow for the fourth quarter of 2015 was $2.14 billion.
|
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(In millions, except for per share amounts) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
2015 |
2014 |
2015 |
2014 |
||||||||||||
Revenue |
$ |
5,841 |
$ |
3,851 |
$ |
17,928 |
$ |
12,466 |
|||||||
Costs and expenses: |
|||||||||||||||
Cost of revenue |
824 |
653 |
2,867 |
2,153 |
|||||||||||
Research and development |
1,314 |
1,111 |
4,816 |
2,666 |
|||||||||||
Marketing and sales |
772 |
624 |
2,725 |
1,680 |
|||||||||||
General and administrative |
371 |
330 |
1,295 |
973 |
|||||||||||
Total costs and expenses |
3,281 |
2,718 |
11,703 |
7,472 |
|||||||||||
Income from operations |
2,560 |
1,133 |
6,225 |
4,994 |
|||||||||||
Interest and other income/(expense), net |
(3 |
) |
(19 |
) |
(31 |
) |
(84 |
) |
|||||||
Income before provision for income taxes |
2,557 |
1,114 |
6,194 |
4,910 |
|||||||||||
Provision for income taxes |
995 |
413 |
2,506 |
1,970 |
|||||||||||
Net income |
$ |
1,562 |
$ |
701 |
$ |
3,688 |
$ |
2,940 |
|||||||
Less: Net income attributable to participating securities |
7 |
5 |
19 |
15 |
|||||||||||
Net income attributable to Class A and Class B common stockholders |
$ |
1,555 |
$ |
696 |
$ |
3,669 |
$ |
2,925 |
|||||||
Earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
$ |
0.55 |
$ |
0.25 |
$ |
1.31 |
$ |
1.12 |
|||||||
Diluted |
$ |
0.54 |
$ |
0.25 |
$ |
1.29 |
$ |
1.10 |
|||||||
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
2,825 |
2,761 |
2,803 |
2,614 |
|||||||||||
Diluted |
2,878 |
2,816 |
2,853 |
2,664 |
|||||||||||
Share-based compensation expense included in costs and expenses: |
|||||||||||||||
Cost of revenue |
$ |
22 |
$ |
18 |
$ |
81 |
$ |
62 |
|||||||
Research and development |
583 |
685 |
2,350 |
1,328 |
|||||||||||
Marketing and sales |
84 |
103 |
320 |
249 |
|||||||||||
General and administrative |
57 |
90 |
218 |
198 |
|||||||||||
Total share-based compensation expense |
$ |
746 |
$ |
896 |
$ |
2,969 |
$ |
1,837 |
|||||||
Payroll tax expenses related to share-based compensation included in costs and expenses: |
|||||||||||||||
Cost of revenue |
$ |
— |
$ |
— |
$ |
2 |
$ |
3 |
|||||||
Research and development |
22 |
6 |
56 |
33 |
|||||||||||
Marketing and sales |
2 |
2 |
10 |
9 |
|||||||||||
General and administrative |
2 |
5 |
9 |
12 |
|||||||||||
Total payroll tax expenses related to share-based compensation |
$ |
26 |
$ |
13 |
$ |
77 |
$ |
57 |
|||||||
Amortization of intangible assets included in costs and expenses: |
|||||||||||||||
Cost of revenue |
$ |
55 |
$ |
42 |
$ |
187 |
$ |
87 |
|||||||
Research and development |
9 |
10 |
39 |
33 |
|||||||||||
Marketing and sales |
103 |
102 |
410 |
105 |
|||||||||||
General and administrative |
24 |
23 |
94 |
94 |
|||||||||||
Total amortization of intangible assets |
$ |
191 |
$ |
177 |
$ |
730 |
$ |
319 |
FACEBOOK, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
December 31, 2015 |
December 31, 2014 |
||||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
4,907 |
$ |
4,315 |
|||||
Marketable securities |
13,527 |
6,884 |
|||||||
Accounts receivable, net of allowances for doubtful accounts of $68 and $39 as of December 31, 2015 and December 31, 2014, respectively |
2,559 |
1,678 |
|||||||
Prepaid expenses and other current assets(1)
|
659 |
513 |
|||||||
Total current assets |
21,652 |
13,390 |
|||||||
Property and equipment, net |
5,687 |
3,967 |
|||||||
Intangible assets, net |
3,246 |
3,929 |
|||||||
Goodwill |
18,026 |
17,981 |
|||||||
Other assets(1)
|
796 |
699 |
|||||||
Total assets |
$ |
49,407 |
$ |
39,966 |
|||||
Liabilities and stockholders' equity |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
196 |
$ |
176 |
|||||
Partners payable |
217 |
202 |
|||||||
Accrued expenses and other current liabilities |
1,449 |
866 |
|||||||
Deferred revenue and deposits |
56 |
66 |
|||||||
Current portion of capital lease obligations |
7 |
114 |
|||||||
Total current liabilities |
1,925 |
1,424 |
|||||||
Capital lease obligations, less current portion |
107 |
119 |
|||||||
Other liabilities(1)
|
3,157 |
2,327 |
|||||||
Total liabilities |
5,189 |
3,870 |
|||||||
Stockholders' equity |
|||||||||
Common stock and additional paid-in capital |
34,886 |
30,225 |
|||||||
Accumulated other comprehensive loss |
(455 |
) |
(228 |
) |
|||||
Retained earnings |
9,787 |
6,099 |
|||||||
Total stockholders' equity |
44,218 |
36,096 |
|||||||
Total liabilities and stockholders' equity |
$ |
49,407 |
$ |
39,966 |
(1) |
In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (ASU 2015-17), which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. We early adopted this standard retrospectively and reclassified $280 million of our current deferred tax assets to noncurrent deferred tax assets as of December 31, 2014. This resulted in net adjustments of $62 million increase and $218 million decrease to our noncurrent deferred tax assets and noncurrent deferred tax liability, respectively, on our December 31, 2014 condensed consolidated balance sheet.
|
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
2015 |
2014 |
2015 |
2014 |
||||||||||||
Cash flows from operating activities |
|||||||||||||||
Net income |
$ |
1,562 |
$ |
701 |
$ |
3,688 |
$ |
2,940 |
|||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||||
Depreciation and amortization |
543 |
433 |
1,945 |
1,243 |
|||||||||||
Lease abandonment |
— |
— |
— |
(31 |
) |
||||||||||
Share-based compensation |
746 |
845 |
2,960 |
1,786 |
|||||||||||
Deferred income taxes |
(123 |
) |
(180 |
) |
(795 |
) |
(210 |
) |
|||||||
Tax benefit from share-based award activity |
566 |
499 |
1,721 |
1,853 |
|||||||||||
Excess tax benefit from share-based award activity |
(566 |
) |
(504 |
) |
(1,721 |
) |
(1,869 |
) |
|||||||
Other |
3 |
2 |
17 |
7 |
|||||||||||
Changes in assets and liabilities: |
|||||||||||||||
Accounts receivable |
(568 |
) |
(346 |
) |
(973 |
) |
(610 |
) |
|||||||
Prepaid expenses and other current assets |
1 |
(78 |
) |
(144 |
) |
(123 |
) |
||||||||
Other assets |
(7 |
) |
(58 |
) |
(3 |
) |
(216 |
) |
|||||||
Accounts payable |
11 |
19 |
18 |
31 |
|||||||||||
Partners payable |
(23 |
) |
(6 |
) |
17 |
(28 |
) |
||||||||
Accrued expenses and other current liabilities |
222 |
130 |
513 |
328 |
|||||||||||
Deferred revenue and deposits |
9 |
7 |
(9 |
) |
10 |
||||||||||
Other liabilities |
451 |
119 |
1,365 |
346 |
|||||||||||
Net cash provided by operating activities |
2,827 |
1,583 |
8,599 |
5,457 |
|||||||||||
Cash flows from investing activities |
|||||||||||||||
Purchases of property and equipment |
(692 |
) |
(517 |
) |
(2,523 |
) |
(1,831 |
) |
|||||||
Purchases of marketable securities |
(5,605 |
) |
(2,889 |
) |
(15,938 |
) |
(9,104 |
) |
|||||||
Sales of marketable securities |
2,803 |
1,047 |
6,928 |
8,438 |
|||||||||||
Maturities of marketable securities |
747 |
199 |
2,310 |
1,909 |
|||||||||||
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets |
(4 |
) |
(4,221 |
) |
(313 |
) |
(4,975 |
) |
|||||||
Change in restricted cash and deposits |
25 |
(235 |
) |
102 |
(348 |
) |
|||||||||
Other investing activities, net |
— |
— |
— |
(2 |
) |
||||||||||
Net cash used in investing activities |
(2,726 |
) |
(6,616 |
) |
(9,434 |
) |
(5,913 |
) |
|||||||
Cash flows from financing activities |
|||||||||||||||
Taxes paid related to net share settlement |
— |
(70 |
) |
(20 |
) |
(73 |
) |
||||||||
Proceeds from exercise of stock options |
— |
11 |
— |
18 |
|||||||||||
Principal payments on capital lease obligations |
(12 |
) |
(44 |
) |
(119 |
) |
(243 |
) |
|||||||
Excess tax benefit from share-based award activity |
566 |
504 |
1,721 |
1,869 |
|||||||||||
Net cash provided by financing activities |
554 |
401 |
1,582 |
1,571 |
|||||||||||
Effect of exchange rate changes on cash and cash equivalents |
(56 |
) |
(52 |
) |
(155 |
) |
(123 |
) |
|||||||
Net increase (decrease) in cash and cash equivalents |
599 |
(4,684 |
) |
592 |
992 |
||||||||||
Cash and cash equivalents at beginning of period |
4,308 |
8,999 |
4,315 |
3,323 |
|||||||||||
Cash and cash equivalents at end of period |
$ |
4,907 |
$ |
4,315 |
$ |
4,907 |
$ |
4,315 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
2015 |
2014 |
2015 |
2014 |
||||||||||||
Supplemental cash flow data |
|||||||||||||||
Cash paid during the period for: |
|||||||||||||||
Interest |
$ |
2 |
$ |
3 |
$ |
10 |
$ |
14 |
|||||||
Income taxes |
$ |
71 |
$ |
77 |
$ |
273 |
$ |
184 |
|||||||
Cash received during the period for: |
|||||||||||||||
Income taxes |
$ |
— |
$ |
— |
$ |
3 |
$ |
6 |
|||||||
Non-cash investing and financing activities: |
|||||||||||||||
Net change in accounts payable, accrued expenses and other current liabilities, and other liabilities related to property and equipment additions |
$ |
(19 |
) |
$ |
53 |
$ |
88 |
$ |
91 |
||||||
Fair value of shares issued related to acquisitions of businesses |
$ |
— |
$ |
12,987 |
$ |
— |
$ |
14,344 |
|||||||
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 December 31, |
Year Ended December 31, |
||||||||||||||
2015 |
2014 |
2015 |
2014 |
||||||||||||
GAAP revenue |
$ |
5,841 |
$ |
3,851 |
$ |
17,928 |
$ |
12,466 |
|||||||
Foreign exchange effect on 2015 revenue using 2014 rates |
322 |
1,185 |
|||||||||||||
Revenue excluding foreign exchange effect |
$ |
6,163 |
$ |
19,113 |
|||||||||||
GAAP revenue year-over-year change % |
52 |
% |
44 |
% |
|||||||||||
Revenue excluding foreign exchange effect year-over-year change % |
60 |
% |
53 |
% |
|||||||||||
GAAP advertising revenue |
$ |
5,637 |
$ |
3,594 |
$ |
17,079 |
$ |
11,492 |
|||||||
Foreign exchange effect on 2015 advertising revenue using 2014 rates |
322 |
1,185 |
|||||||||||||
Advertising revenue excluding foreign exchange effect |
$ |
5,959 |
$ |
18,264 |
|||||||||||
GAAP advertising revenue year-over-year change % |
57 |
% |
49 |
% |
|||||||||||
Advertising revenue excluding foreign exchange effect year-over-year change % |
66 |
% |
59 |
% |
|||||||||||
GAAP costs and expenses |
$ |
3,281 |
$ |
2,718 |
$ |
11,703 |
$ |
7,472 |
|||||||
Share-based compensation expense |
(746 |
) |
(896 |
) |
(2,969 |
) |
(1,837 |
) |
|||||||
Payroll tax expenses related to share-based compensation |
(26 |
) |
(13 |
) |
(77 |
) |
(57 |
) |
|||||||
Amortization of intangible assets |
(191 |
) |
(177 |
) |
(730 |
) |
(319 |
) |
|||||||
Non-GAAP costs and expenses |
$ |
2,318 |
$ |
1,632 |
$ |
7,927 |
$ |
5,259 |
|||||||
GAAP income from operations |
$ |
2,560 |
$ |
1,133 |
$ |
6,225 |
$ |
4,994 |
|||||||
Share-based compensation expense |
746 |
896 |
2,969 |
1,837 |
|||||||||||
Payroll tax expenses related to share-based compensation |
26 |
13 |
77 |
57 |
|||||||||||
Amortization of intangible assets |
191 |
177 |
730 |
319 |
|||||||||||
Non-GAAP income from operations |
$ |
3,523 |
$ |
2,219 |
$ |
10,001 |
$ |
7,207 |
|||||||
GAAP net income |
$ |
1,562 |
$ |
701 |
$ |
3,688 |
$ |
2,940 |
|||||||
Share-based compensation expense |
746 |
896 |
2,969 |
1,837 |
|||||||||||
Payroll tax expenses related to share-based compensation |
26 |
13 |
77 |
57 |
|||||||||||
Amortization of intangible assets |
191 |
177 |
730 |
319 |
|||||||||||
Income tax adjustments |
(260 |
) |
(269 |
) |
(946 |
) |
(440 |
) |
|||||||
Non-GAAP net income |
$ |
2,265 |
$ |
1,518 |
$ |
6,518 |
$ |
4,713 |
|||||||
GAAP and Non-GAAP diluted shares |
2,878 |
2,816 |
2,853 |
2,664 |
|||||||||||
GAAP diluted earnings per share |
$ |
0.54 |
$ |
0.25 |
$ |
1.29 |
$ |
1.10 |
|||||||
Net income attributable to participating securities |
— |
— |
— |
(0.01 |
) |
||||||||||
Non-GAAP adjustments to net income |
0.25 |
0.29 |
0.99 |
0.68 |
|||||||||||
Non-GAAP diluted earnings per share |
$ |
0.79 |
$ |
0.54 |
$ |
2.28 |
$ |
1.77 |
|||||||
GAAP operating margin |
44 |
% |
29 |
% |
35 |
% |
40 |
% |
|||||||
Share-based compensation expense |
13 |
% |
23 |
% |
17 |
% |
15 |
% |
|||||||
Payroll tax expenses related to share-based compensation |
— |
% |
— |
% |
— |
% |
— |
% |
|||||||
Amortization of intangible assets |
3 |
% |
5 |
% |
4 |
% |
3 |
% |
|||||||
Non-GAAP operating margin |
60 |
% |
58 |
% |
56 |
% |
58 |
% |
|||||||
GAAP income before provision for income taxes |
$ |
2,557 |
$ |
1,114 |
$ |
6,194 |
$ |
4,910 |
|||||||
GAAP provision for income taxes |
995 |
413 |
2,506 |
1,970 |
|||||||||||
GAAP effective tax rate |
39 |
% |
37 |
% |
40 |
% |
40 |
% |
|||||||
GAAP income before provision for income taxes |
$ |
2,557 |
$ |
1,114 |
$ |
6,194 |
$ |
4,910 |
Share-based compensation and related payroll tax expenses |
772 |
909 |
3,046 |
1,894 |
|||||||||||
Amortization of intangible assets |
191 |
177 |
730 |
319 |
|||||||||||
Non-GAAP income before provision for income taxes |
$ |
3,520 |
$ |
2,200 |
$ |
9,970 |
$ |
7,123 |
|||||||
Non-GAAP provision for income taxes |
1,255 |
682 |
3,452 |
2,410 |
|||||||||||
Non-GAAP effective tax rate |
36 |
% |
31 |
% |
35 |
% |
34 |
% |
|||||||
Net cash provided by operating activities |
$ |
2,827 |
$ |
1,583 |
$ |
8,599 |
$ |
5,457 |
|||||||
Purchases of property and equipment |
(692 |
) |
(517 |
) |
(2,523 |
) |
(1,831 |
) |
|||||||
Free cash flow |
$ |
2,135 |
$ |
1,066 |
$ |
6,076 |
$ |
3,626 |