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Three Months Ended March 31, |
|||||||
In millions, except percentages and per share amounts |
2016 |
2015 |
|||||
Revenue |
$ |
5,382 |
$ |
3,543 |
|||
Income from Operations |
|||||||
GAAP |
$ |
2,009 |
$ |
933 |
|||
Non-GAAP* |
$ |
2,977 |
$ |
1,840 |
|||
Operating Margin |
|||||||
GAAP |
37 |
% |
26 |
% |
|||
Non-GAAP* |
55 |
% |
52 |
% |
|||
Net Income |
|||||||
GAAP |
$ |
1,510 |
$ |
512 |
|||
Non-GAAP* |
$ |
2,229 |
$ |
1,189 |
|||
Diluted Earnings per Share (EPS) |
|||||||
GAAP |
$ |
0.52 |
$ |
0.18 |
|||
Non-GAAP* |
$ |
0.77 |
$ |
0.42 |
* |
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 GAAP to Non-GAAP Results." |
• |
Daily active users (DAUs) – DAUs were 1.09 billion on average for March 2016, an increase of 16% year-over-year.
|
• |
Mobile DAUs – Mobile DAUs were 989 million on average for March 2016, an increase of 24% year-over-year.
|
• |
Monthly active users (MAUs) – MAUs were 1.65 billion as of March 31, 2016, an increase of 15% year-over-year.
|
• |
Mobile MAUs – Mobile MAUs were 1.51 billion as of March 31, 2016, an increase of 21% year-over-year.
|
GAAP |
Year-over-Year % Change |
|||||||||
Three Months Ended March 31, |
||||||||||
In millions, except percentages and per share amounts |
2016 |
2015 |
||||||||
Revenue: |
||||||||||
Advertising(1)
|
$ |
5,201 |
$ |
3,317 |
57 |
% |
||||
Payments and other fees |
181 |
226 |
(20 |
)% |
||||||
Total revenue(2)
|
5,382 |
3,543 |
52 |
% |
||||||
Total costs and expenses |
3,373 |
2,610 |
29 |
% |
||||||
Income from operations |
$ |
2,009 |
$ |
933 |
115 |
% |
||||
Operating margin |
37 |
% |
26 |
% |
||||||
Provision for income taxes |
555 |
|||||||||
Effective tax rate |
27 |
% |
||||||||
Net income |
$ |
1,510 |
$ |
512 |
195 |
% |
||||
Diluted EPS |
$ |
0.52 |
$ |
0.18 |
189 |
% |
Non-GAAP |
Year-over-Year % Change |
|||||||||
Three Months Ended March 31, |
||||||||||
In millions, except percentages and per share amounts |
2016 |
2015 |
||||||||
GAAP revenue |
$ |
5,382 |
$ |
3,543 |
52 |
% |
||||
Total costs and expenses |
2,405 |
1,703 |
41 |
% |
||||||
Income from operations |
$ |
2,977 |
$ |
1,840 |
62 |
% |
||||
Operating margin |
55 |
% |
52 |
% |
||||||
Effective tax rate |
27 |
% |
||||||||
Net income |
$ |
2,229 |
$ |
1,189 |
87 |
% |
||||
Diluted EPS |
$ |
0.77 |
$ |
0.42 |
83 |
% |
• |
Mobile advertising revenue – Mobile advertising revenue represented approximately 82% of advertising revenue for the first quarter of 2016, up from 73% of advertising revenue in the first quarter of 2015.
|
• |
Capital expenditures – Capital expenditures for the first quarter of 2016 were $1.13 billion.
|
• |
Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $20.62 billion at the end of the first quarter of 2016.
|
• |
Free cash flow – Free cash flow for the first quarter of 2016 was $1.85 billion.
|
FACEBOOK, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||
(In millions, except for per share amounts) | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, |
|||||||
2016 |
2015 |
||||||
Revenue |
$ |
5,382 |
$ |
3,543 |
|||
Costs and expenses: |
|||||||
Cost of revenue |
838 |
654 |
|||||
Research and development |
1,343 |
1,062 |
|||||
Marketing and sales |
826 |
620 |
|||||
General and administrative |
366 |
274 |
|||||
Total costs and expenses |
3,373 |
2,610 |
|||||
Income from operations |
2,009 |
933 |
|||||
Interest and other income/(expense), net |
56 |
(1 |
) |
||||
Income before provision for income taxes |
2,065 |
932 |
|||||
Provision for income taxes |
555 |
420 |
|||||
Net income |
$ |
1,510 |
$ |
512 |
|||
Less: Net income attributable to participating securities |
5 |
3 |
|||||
Net income attributable to Class A and Class B common stockholders |
$ |
1,505 |
$ |
509 |
|||
Earnings per share attributable to Class A and Class B common stockholders: |
|||||||
Basic |
$ |
0.53 |
$ |
0.18 |
|||
Diluted |
$ |
0.52 |
$ |
0.18 |
|||
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders: |
|||||||
Basic |
2,843 |
2,784 |
|||||
Diluted |
2,888 |
2,836 |
|||||
Share-based compensation expense included in costs and expenses: |
|||||||
Cost of revenue |
$ |
22 |
$ |
17 |
|||
Research and development |
586 |
566 |
|||||
Marketing and sales |
82 |
72 |
|||||
General and administrative |
57 |
48 |
|||||
Total share-based compensation expense |
$ |
747 |
$ |
703 |
|||
Payroll tax expenses related to share-based compensation included in costs and expenses: |
|||||||
Cost of revenue |
$ |
2 |
$ |
1 |
|||
Research and development |
29 |
17 |
|||||
Marketing and sales |
5 |
4 |
|||||
General and administrative |
5 |
3 |
|||||
Total payroll tax expenses related to share-based compensation |
$ |
41 |
$ |
25 |
|||
Amortization of intangible assets included in costs and expenses: |
|||||||
Cost of revenue |
$ |
44 |
$ |
44 |
|||
Research and development |
9 |
10 |
|||||
Marketing and sales |
104 |
102 |
|||||
General and administrative |
23 |
23 |
|||||
Total amortization of intangible assets |
$ |
180 |
$ |
179 |
FACEBOOK, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
March 31, 2016 |
December 31, 2015 |
||||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
6,456 |
$ |
4,907 |
|||||
Marketable securities |
14,165 |
13,527 |
|||||||
Accounts receivable, net of allowances for doubtful accounts of $63 and $68 as of March 31, 2016 and December 31, 2015, respectively |
2,348 |
2,559 |
|||||||
Prepaid expenses and other current assets |
843 |
659 |
|||||||
Total current assets |
23,812 |
21,652 |
|||||||
Property and equipment, net |
6,467 |
5,687 |
|||||||
Intangible assets, net |
3,067 |
3,246 |
|||||||
Goodwill |
18,029 |
18,026 |
|||||||
Other assets |
700 |
796 |
|||||||
Total assets |
$ |
52,075 |
$ |
49,407 |
|||||
Liabilities and stockholders' equity |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
149 |
$ |
196 |
|||||
Partners payable |
216 |
217 |
|||||||
Accrued expenses and other current liabilities |
1,389 |
1,449 |
|||||||
Deferred revenue and deposits |
55 |
56 |
|||||||
Current portion of capital lease obligations |
— |
7 |
|||||||
Total current liabilities |
1,809 |
1,925 |
|||||||
Capital lease obligations, less current portion |
— |
107 |
|||||||
Other liabilities |
3,116 |
3,157 |
|||||||
Total liabilities |
4,925 |
5,189 |
|||||||
Stockholders' equity |
|||||||||
Common stock and additional paid-in capital |
36,129 |
34,886 |
|||||||
Accumulated other comprehensive loss |
(276 |
) |
(455 |
) |
|||||
Retained earnings |
11,297 |
9,787 |
|||||||
Total stockholders' equity |
47,150 |
44,218 |
|||||||
Total liabilities and stockholders' equity |
$ |
52,075 |
$ |
49,407 |
FACEBOOK, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In millions) | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, |
|||||||
2016 |
2015 |
||||||
Cash flows from operating activities |
|||||||
Net income |
$ |
1,510 |
$ |
512 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation and amortization |
552 |
457 |
|||||
Share-based compensation |
747 |
694 |
|||||
Deferred income taxes |
(65 |
) |
(223 |
) |
|||
Tax benefit from share-based award activity |
494 |
423 |
|||||
Excess tax benefit from share-based award activity |
(494 |
) |
(423 |
) |
|||
Other |
13 |
6 |
|||||
Changes in assets and liabilities: |
|||||||
Accounts receivable |
267 |
84 |
|||||
Prepaid expenses and other current assets |
(106 |
) |
(43 |
) |
|||
Other assets |
15 |
(32 |
) |
||||
Accounts payable |
2 |
(15 |
) |
||||
Partners payable |
(3 |
) |
(13 |
) |
|||
Accrued expenses and other current liabilities |
(16 |
) |
134 |
||||
Deferred revenue and deposits |
(2 |
) |
(10 |
) |
|||
Other liabilities |
69 |
149 |
|||||
Net cash provided by operating activities |
2,983 |
1,700 |
|||||
Cash flows from investing activities |
|||||||
Purchases of property and equipment |
(1,132 |
) |
(502 |
) |
|||
Purchases of marketable securities |
(3,126 |
) |
(3,055 |
) |
|||
Sales of marketable securities |
2,013 |
608 |
|||||
Maturities of marketable securities |
537 |
339 |
|||||
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets |
(1 |
) |
(257 |
) |
|||
Change in restricted cash and deposits |
33 |
23 |
|||||
Net cash used in investing activities |
(1,676 |
) |
(2,844 |
) |
|||
Cash flows from financing activities |
|||||||
Principal payments on capital lease and other financing obligations |
(312 |
) |
(47 |
) |
|||
Excess tax benefit from share-based award activity |
494 |
423 |
|||||
Other financing activities, net |
2 |
(5 |
) |
||||
Net cash provided by financing activities |
184 |
371 |
|||||
Effect of exchange rate changes on cash and cash equivalents |
58 |
(123 |
) |
||||
Net increase (decrease) in cash and cash equivalents |
1,549 |
(896 |
) |
||||
Cash and cash equivalents at beginning of period |
4,907 |
4,315 |
|||||
Cash and cash equivalents at end of period |
$ |
6,456 |
$ |
3,419 |
FACEBOOK, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In millions) | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, |
|||||||
2016 |
2015 |
||||||
Supplemental cash flow data |
|||||||
Cash paid during the period for: |
|||||||
Interest |
$ |
11 |
$ |
3 |
|||
Income taxes, net |
$ |
170 |
$ |
119 |
|||
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 |
$ |
52 |
$ |
186 |
|||
Promissory note payable issued in connection with an acquisition |
$ |
— |
$ |
198 |
Reconciliation of GAAP to Non-GAAP Results | |||||||
(In millions, except percentages and per share amounts) | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, |
|||||||
2016 |
2015 |
||||||
GAAP revenue |
$ |
5,382 |
$ |
3,543 |
|||
Foreign exchange effect on 2016 revenue using 2015 rates |
202 |
||||||
Revenue excluding foreign exchange effect |
$ |
5,584 |
|||||
GAAP revenue year-over-year change % |
52 |
% |
|||||
Revenue excluding foreign exchange effect year-over-year change % |
58 |
% |
|||||
GAAP advertising revenue |
$ |
5,201 |
$ |
3,317 |
|||
Foreign exchange effect on 2016 advertising revenue using 2015 rates |
202 |
||||||
Advertising revenue excluding foreign exchange effect |
$ |
5,403 |
|||||
GAAP advertising revenue year-over-year change % |
57 |
% |
|||||
Advertising revenue excluding foreign exchange effect year-over-year change % |
63 |
% |
|||||
GAAP costs and expenses |
$ |
3,373 |
$ |
2,610 |
|||
Share-based compensation expense |
(747 |
) |
(703 |
) |
|||
Payroll tax expenses related to share-based compensation |
(41 |
) |
(25 |
) |
|||
Amortization of intangible assets |
(180 |
) |
(179 |
) |
|||
Non-GAAP costs and expenses |
$ |
2,405 |
$ |
1,703 |
|||
GAAP income from operations |
$ |
2,009 |
$ |
933 |
|||
Share-based compensation expense |
747 |
703 |
|||||
Payroll tax expenses related to share-based compensation |
41 |
25 |
|||||
Amortization of intangible assets |
180 |
179 |
|||||
Non-GAAP income from operations |
$ |
2,977 |
$ |
1,840 |
|||
GAAP net income |
$ |
1,510 |
$ |
512 |
|||
Share-based compensation expense |
747 |
703 |
|||||
Payroll tax expenses related to share-based compensation |
41 |
25 |
|||||
Amortization of intangible assets |
180 |
179 |
|||||
Income tax adjustments |
(249 |
) |
(230 |
) |
|||
Non-GAAP net income |
$ |
2,229 |
$ |
1,189 |
|||
GAAP and Non-GAAP diluted shares |
2,888 |
2,836 |
|||||
GAAP diluted earnings per share |
$ |
0.52 |
$ |
0.18 |
|||
Non-GAAP adjustments to net income |
0.25 |
0.24 |
|||||
Non-GAAP diluted earnings per share |
$ |
0.77 |
$ |
0.42 |
|||
GAAP operating margin |
37 |
% |
26 |
% |
|||
Share-based compensation expense |
14 |
% |
20 |
% |
|||
Payroll tax expenses related to share-based compensation |
1 |
% |
1 |
% |
|||
Amortization of intangible assets |
3 |
% |
5 |
% |
|||
Non-GAAP operating margin |
55 |
% |
52 |
% |
|||
GAAP income before provision for income taxes |
$ |
2,065 |
$ |
932 |
|||
GAAP provision for income taxes |
555 |
420 |
|||||
GAAP effective tax rate |
27 |
% |
45 |
% |
|||
GAAP income before provision for income taxes |
$ |
2,065 |
$ |
932 |
|||
Share-based compensation and related payroll tax expenses |
788 |
728 |
|||||
Amortization of intangible assets |
180 |
179 |
Non-GAAP income before provision for income taxes |
$ |
3,033 |
$ |
1,839 |
|||
Non-GAAP provision for income taxes |
804 |
650 |
|||||
Non-GAAP effective tax rate |
27 |
% |
35 |
% |
|||
Net cash provided by operating activities |
$ |
2,983 |
$ |
1,700 |
|||
Purchases of property and equipment |
(1,132 |
) |
(502 |
) |
|||
Free cash flow |
$ |
1,851 |
$ |
1,198 |