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Three Months Ended December 31, |
Year-over-Year % Change |
Year Ended December 31, |
Year-over-Year % Change |
||||||||||||||||||
In millions, except percentages and per share amounts |
2017 |
2016 |
2017 |
2016 |
|||||||||||||||||
Revenue: |
|||||||||||||||||||||
Advertising |
$ |
12,779 |
$ |
8,629 |
48 |
% |
$ |
39,942 |
$ |
26,885 |
49 |
% |
|||||||||
Payments and other fees |
193 |
180 |
7 |
% |
711 |
753 |
(6 |
)% |
|||||||||||||
Total revenue |
12,972 |
8,809 |
47 |
% |
40,653 |
27,638 |
47 |
% |
|||||||||||||
Total costs and expenses |
5,620 |
4,243 |
32 |
% |
20,450 |
15,211 |
34 |
% |
|||||||||||||
Income from operations |
$ |
7,352 |
$ |
4,566 |
61 |
% |
$ |
20,203 |
$ |
12,427 |
63 |
% |
|||||||||
Operating margin |
57 |
% |
52 |
% |
50 |
% |
45 |
% |
|||||||||||||
Provision for income taxes(1)
|
$ |
3,194 |
$ |
4,660 |
|||||||||||||||||
Effective tax rate(1)
|
43 |
% |
23 |
% |
|||||||||||||||||
Net income(1)
|
$ |
4,268 |
$ |
3,568 |
20 |
% |
$ |
15,934 |
$ |
10,217 |
56 |
% |
|||||||||
Diluted Earnings per Share (EPS)(1)
|
$ |
1.44 |
$ |
1.21 |
19 |
% |
$ |
5.39 |
$ |
3.49 |
54 |
% |
• |
Daily active users (DAUs) – DAUs were 1.40 billion on average for December 2017, an increase of 14% year-over-year.
|
• |
Monthly active users (MAUs) – MAUs were 2.13 billion as of December 31, 2017, an increase of 14% year-over-year.
|
• |
Mobile advertising revenue – Mobile advertising revenue represented approximately 89% of advertising revenue for the fourth quarter of 2017, up from approximately 84% of advertising revenue in the fourth quarter of 2016.
|
• |
Capital expenditures – Capital expenditures were $2.26 billion and $6.73 billion for the fourth quarter and full year 2017, respectively.
|
• |
Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $41.71 billion at the end of the fourth quarter of 2017.
|
• |
Headcount – Headcount was 25,105 as of December 31, 2017, an increase of 47% year-over-year.
|
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(In millions, except for per share amounts) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||
Revenue |
$ |
12,972 |
$ |
8,809 |
$ |
40,653 |
$ |
27,638 |
|||||||
Costs and expenses: |
|||||||||||||||
Cost of revenue |
1,611 |
1,047 |
5,454 |
3,789 |
|||||||||||
Research and development |
1,949 |
1,563 |
7,754 |
5,919 |
|||||||||||
Marketing and sales |
1,374 |
1,118 |
4,725 |
3,772 |
|||||||||||
General and administrative |
686 |
515 |
2,517 |
1,731 |
|||||||||||
Total costs and expenses |
5,620 |
4,243 |
20,450 |
15,211 |
|||||||||||
Income from operations |
7,352 |
4,566 |
20,203 |
12,427 |
|||||||||||
Interest and other income (expense), net |
110 |
(33 |
) |
391 |
91 |
||||||||||
Income before provision for income taxes |
7,462 |
4,533 |
20,594 |
12,518 |
|||||||||||
Provision for income taxes |
3,194 |
965 |
4,660 |
2,301 |
|||||||||||
Net income |
$ |
4,268 |
$ |
3,568 |
$ |
15,934 |
$ |
10,217 |
|||||||
Less: Net income attributable to participating securities |
2 |
7 |
14 |
29 |
|||||||||||
Net income attributable to Class A and Class B common stockholders |
$ |
4,266 |
$ |
3,561 |
$ |
15,920 |
$ |
10,188 |
|||||||
Earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
$ |
1.47 |
$ |
1.24 |
$ |
5.49 |
$ |
3.56 |
|||||||
Diluted |
$ |
1.44 |
$ |
1.21 |
$ |
5.39 |
$ |
3.49 |
|||||||
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
2,907 |
2,882 |
2,901 |
2,863 |
|||||||||||
Diluted |
2,954 |
2,938 |
2,956 |
2,925 |
|||||||||||
Share-based compensation expense included in costs and expenses: |
|||||||||||||||
Cost of revenue |
$ |
50 |
$ |
32 |
$ |
178 |
$ |
113 |
|||||||
Research and development |
587 |
641 |
2,820 |
2,494 |
|||||||||||
Marketing and sales |
106 |
96 |
436 |
368 |
|||||||||||
General and administrative |
71 |
62 |
289 |
243 |
|||||||||||
Total share-based compensation expense |
$ |
814 |
$ |
831 |
$ |
3,723 |
$ |
3,218 |
FACEBOOK, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
December 31, 2017 |
December 31, 2016 |
||||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
8,079 |
$ |
8,903 |
|||||
Marketable securities |
33,632 |
20,546 |
|||||||
Accounts receivable, net of allowances of $189 and $94 as of December 31, 2017 and 2016, respectively |
5,832 |
3,993 |
|||||||
Prepaid expenses and other current assets |
1,020 |
959 |
|||||||
Total current assets |
48,563 |
34,401 |
|||||||
Property and equipment, net |
13,721 |
8,591 |
|||||||
Intangible assets, net |
1,884 |
2,535 |
|||||||
Goodwill |
18,221 |
18,122 |
|||||||
Other assets |
2,135 |
1,312 |
|||||||
Total assets |
$ |
84,524 |
$ |
64,961 |
|||||
Liabilities and stockholders' equity |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
380 |
$ |
302 |
|||||
Partners payable |
390 |
280 |
|||||||
Accrued expenses and other current liabilities |
2,892 |
2,203 |
|||||||
Deferred revenue and deposits |
98 |
90 |
|||||||
Total current liabilities |
3,760 |
2,875 |
|||||||
Other liabilities |
6,417 |
2,892 |
|||||||
Total liabilities |
10,177 |
5,767 |
|||||||
Commitments and contingencies |
|||||||||
Stockholders' equity: |
|||||||||
Common stock and additional paid-in capital |
40,584 |
38,227 |
|||||||
Accumulated other comprehensive loss |
(227 |
) |
(703 |
) |
|||||
Retained earnings |
33,990 |
21,670 |
|||||||
Total stockholders' equity |
74,347 |
59,194 |
|||||||
Total liabilities and stockholders' equity |
$ |
84,524 |
$ |
64,961 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||
Cash flows from operating activities |
|||||||||||||||
Net income |
$ |
4,268 |
$ |
3,568 |
$ |
15,934 |
$ |
10,217 |
|||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||||
Depreciation and amortization |
853 |
614 |
3,025 |
2,342 |
|||||||||||
Share-based compensation |
814 |
831 |
3,723 |
3,218 |
|||||||||||
Deferred income taxes |
(225 |
) |
(256 |
) |
(377 |
) |
(457 |
) |
|||||||
Other |
5 |
7 |
24 |
30 |
|||||||||||
Changes in assets and liabilities: |
|||||||||||||||
Accounts receivable |
(1,374 |
) |
(1,011 |
) |
(1,609 |
) |
(1,489 |
) |
|||||||
Prepaid expenses and other current assets |
441 |
155 |
(192 |
) |
(159 |
) |
|||||||||
Other assets |
26 |
(32 |
) |
154 |
14 |
||||||||||
Accounts payable |
50 |
35 |
43 |
14 |
|||||||||||
Partners payable |
73 |
47 |
95 |
67 |
|||||||||||
Accrued expenses and other current liabilities |
215 |
372 |
309 |
1,014 |
|||||||||||
Deferred revenue and deposits |
(7 |
) |
14 |
4 |
35 |
||||||||||
Other liabilities |
2,531 |
586 |
3,083 |
1,262 |
|||||||||||
Net cash provided by operating activities |
7,670 |
4,930 |
24,216 |
16,108 |
|||||||||||
Cash flows from investing activities |
|||||||||||||||
Purchases of property and equipment |
(2,262 |
) |
(1,269 |
) |
(6,733 |
) |
(4,491 |
) |
|||||||
Purchases of marketable securities |
(5,272 |
) |
(4,974 |
) |
(25,682 |
) |
(22,341 |
) |
|||||||
Sales of marketable securities |
1,795 |
4,103 |
9,444 |
13,894 |
|||||||||||
Maturities of marketable securities |
760 |
227 |
2,988 |
1,261 |
|||||||||||
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets |
(17 |
) |
(41 |
) |
(122 |
) |
(123 |
) |
|||||||
Change in restricted cash and deposits |
3 |
(21 |
) |
67 |
61 |
||||||||||
Net cash used in investing activities |
(4,993 |
) |
(1,975 |
) |
(20,038 |
) |
(11,739 |
) |
|||||||
Cash flows from financing activities |
|||||||||||||||
Taxes paid related to net share settlement of equity awards |
(885 |
) |
— |
(3,246 |
) |
(6 |
) |
||||||||
Principal payments on capital lease and other financing obligations |
— |
— |
— |
(312 |
) |
||||||||||
Repurchases of Class A common stock |
(958 |
) |
— |
(1,976 |
) |
— |
|||||||||
Other financing activities, net |
1 |
4 |
(13 |
) |
8 |
||||||||||
Net cash (used in) provided by financing activities |
(1,842 |
) |
4 |
(5,235 |
) |
(310 |
) |
||||||||
Effect of exchange rate changes on cash and cash equivalents |
43 |
(94 |
) |
233 |
(63 |
) |
|||||||||
Net increase (decrease) in cash and cash equivalents |
878 |
2,865 |
(824 |
) |
3,996 |
||||||||||
Cash and cash equivalents at beginning of period |
7,201 |
6,038 |
8,903 |
4,907 |
|||||||||||
Cash and cash equivalents at end of period |
$ |
8,079 |
$ |
8,903 |
$ |
8,079 |
$ |
8,903 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||
Supplemental cash flow data |
|||||||||||||||
Cash paid during the period for: |
|||||||||||||||
Interest |
$ |
— |
$ |
— |
$ |
— |
$ |
11 |
|||||||
Income taxes, net |
$ |
324 |
$ |
446 |
$ |
2,117 |
$ |
1,210 |
|||||||
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 |
$ |
(77 |
) |
$ |
(47 |
) |
$ |
363 |
$ |
272 |
|||||
Settlement of acquisition-related contingent consideration liability |
$ |
— |
$ |
— |
$ |
102 |
$ |
33 |
|||||||
Change in unsettled repurchases of Class A common stock |
$ |
74 |
$ |
— |
$ |
94 |
$ |
— |
Reconciliation of GAAP to Non-GAAP Results | |||||||||||||||
(In millions, except percentages) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||
GAAP revenue |
$ |
12,972 |
$ |
8,809 |
$ |
40,653 |
$ |
27,638 |
|||||||
Foreign exchange effect on 2017 revenue using 2016 rates |
(329 |
) |
(293 |
) |
|||||||||||
Revenue excluding foreign exchange effect |
$ |
12,643 |
$ |
40,360 |
|||||||||||
GAAP revenue year-over-year change % |
47 |
% |
47 |
% |
|||||||||||
Revenue excluding foreign exchange effect year-over-year change % |
44 |
% |
46 |
% |
|||||||||||
GAAP advertising revenue |
$ |
12,779 |
$ |
8,629 |
$ |
39,942 |
$ |
26,885 |
|||||||
Foreign exchange effect on 2017 advertising revenue using 2016 rates |
(327 |
) |
(292 |
) |
|||||||||||
Advertising revenue excluding foreign exchange effect |
$ |
12,452 |
$ |
39,650 |
|||||||||||
GAAP advertising revenue year-over-year change % |
48 |
% |
49 |
% |
|||||||||||
Advertising revenue excluding foreign exchange effect year-over-year change % |
44 |
% |
47 |
% |
|||||||||||
Net cash provided by operating activities |
$ |
7,670 |
$ |
4,930 |
$ |
24,216 |
$ |
16,108 |
|||||||
Purchases of property and equipment |
(2,262 |
) |
(1,269 |
) |
(6,733 |
) |
(4,491 |
) |
|||||||
Free cash flow |
$ |
5,408 |
$ |
3,661 |
$ |
17,483 |
$ |
11,617 |