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Three Months Ended March 31, |
Year-over-Year % Change |
|||||||||
In millions, except percentages and per share amounts |
2018 |
2017 |
||||||||
Revenue: |
||||||||||
Advertising |
$ |
11,795 |
$ |
7,857 |
50 |
% |
||||
Payments and other fees |
171 |
175 |
(2 |
)% |
||||||
Total revenue |
11,966 |
8,032 |
49 |
% |
||||||
Total costs and expenses |
6,517 |
4,705 |
39 |
% |
||||||
Income from operations |
$ |
5,449 |
$ |
3,327 |
64 |
% |
||||
Operating margin |
46 |
% |
41 |
% |
||||||
Provision for income taxes |
$ |
622 |
||||||||
Effective tax rate |
11 |
% |
||||||||
Net income |
$ |
4,988 |
$ |
3,064 |
63 |
% |
||||
Diluted Earnings per Share (EPS) |
$ |
1.69 |
$ |
1.04 |
63 |
% |
• |
Daily active users (DAUs) – DAUs were 1.45 billion on average for March 2018, an increase of 13% year-over-year.
|
• |
Monthly active users (MAUs) – MAUs were 2.20 billion as of March 31, 2018, an increase of 13% year-over-year.
|
• |
Mobile advertising revenue – Mobile advertising revenue represented approximately 91% of advertising revenue for the first quarter of 2018, up from approximately 85% of advertising revenue in the first quarter of 2017.
|
• |
Capital expenditures – Capital expenditures for the first quarter of 2018 were $2.81 billion.
|
• |
Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $43.96 billion at the end of the first quarter of 2018.
|
• |
Headcount – Headcount was 27,742 as of March 31, 2018, an increase of 48% year-over-year.
|
FACEBOOK, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||
(In millions, except for per share amounts) | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, |
|||||||
2018 |
2017 |
||||||
Revenue |
$ |
11,966 |
$ |
8,032 |
|||
Costs and expenses: |
|||||||
Cost of revenue |
1,927 |
1,159 |
|||||
Research and development |
2,238 |
1,834 |
|||||
Marketing and sales |
1,595 |
1,057 |
|||||
General and administrative |
757 |
655 |
|||||
Total costs and expenses |
6,517 |
4,705 |
|||||
Income from operations |
5,449 |
3,327 |
|||||
Interest and other income, net |
161 |
81 |
|||||
Income before provision for income taxes |
5,610 |
3,408 |
|||||
Provision for income taxes |
622 |
344 |
|||||
Net income |
$ |
4,988 |
$ |
3,064 |
|||
Less: Net income attributable to participating securities |
1 |
5 |
|||||
Net income attributable to Class A and Class B common stockholders |
$ |
4,987 |
$ |
3,059 |
|||
Earnings per share attributable to Class A and Class B common stockholders: |
|||||||
Basic |
$ |
1.72 |
$ |
1.06 |
|||
Diluted |
$ |
1.69 |
$ |
1.04 |
|||
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders: |
|||||||
Basic |
2,906 |
2,891 |
|||||
Diluted |
2,945 |
2,944 |
|||||
Share-based compensation expense included in costs and expenses: |
|||||||
Cost of revenue |
$ |
56 |
$ |
34 |
|||
Research and development |
718 |
670 |
|||||
Marketing and sales |
109 |
96 |
|||||
General and administrative |
72 |
67 |
|||||
Total share-based compensation expense |
$ |
955 |
$ |
867 |
FACEBOOK, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
March 31, 2018 |
December 31, 2017 |
||||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
12,082 |
$ |
8,079 |
|||||
Marketable securities |
31,874 |
33,632 |
|||||||
Accounts receivable, net of allowances of $204 and $189 as of March 31, 2018 and December 31, 2017, respectively |
5,115 |
5,832 |
|||||||
Prepaid expenses and other current assets |
1,341 |
1,020 |
|||||||
Total current assets |
50,412 |
48,563 |
|||||||
Property and equipment, net |
16,211 |
13,721 |
|||||||
Intangible assets, net |
1,735 |
1,884 |
|||||||
Goodwill |
18,268 |
18,221 |
|||||||
Other assets |
2,319 |
2,135 |
|||||||
Total assets |
$ |
88,945 |
$ |
84,524 |
|||||
Liabilities and stockholders' equity |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
593 |
$ |
380 |
|||||
Partners payable |
396 |
390 |
|||||||
Accrued expenses and other current liabilities |
4,003 |
2,892 |
|||||||
Deferred revenue and deposits |
94 |
98 |
|||||||
Total current liabilities |
5,086 |
3,760 |
|||||||
Other liabilities |
6,239 |
6,417 |
|||||||
Total liabilities |
11,325 |
10,177 |
|||||||
Stockholders' equity: |
|||||||||
Common stock and additional paid-in capital |
41,134 |
40,584 |
|||||||
Accumulated other comprehensive loss |
(294 |
) |
(227 |
) |
|||||
Retained earnings |
36,780 |
33,990 |
|||||||
Total stockholders' equity |
77,620 |
74,347 |
|||||||
Total liabilities and stockholders' equity |
$ |
88,945 |
$ |
84,524 |
FACEBOOK, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In millions) | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, |
|||||||
2018 |
2017* |
||||||
Cash flows from operating activities |
|||||||
Net income |
$ |
4,988 |
$ |
3,064 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation and amortization |
949 |
671 |
|||||
Share-based compensation |
955 |
867 |
|||||
Deferred income taxes |
(47 |
) |
(84 |
) |
|||
Other |
8 |
5 |
|||||
Changes in assets and liabilities: |
|||||||
Accounts receivable |
788 |
609 |
|||||
Prepaid expenses and other current assets |
(365 |
) |
(365 |
) |
|||
Other assets |
22 |
31 |
|||||
Accounts payable |
1 |
(10 |
) |
||||
Partners payable |
2 |
(3 |
) |
||||
Accrued expenses and other current liabilities |
707 |
61 |
|||||
Deferred revenue and deposits |
(5 |
) |
(10 |
) |
|||
Other liabilities |
(143 |
) |
222 |
||||
Net cash provided by operating activities |
7,860 |
5,058 |
|||||
Cash flows from investing activities |
|||||||
Purchases of property and equipment |
(2,812 |
) |
(1,271 |
) |
|||
Purchases of marketable securities |
(4,022 |
) |
(6,992 |
) |
|||
Sales of marketable securities |
4,330 |
1,762 |
|||||
Maturities of marketable securities |
1,267 |
599 |
|||||
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets |
(49 |
) |
— |
||||
Other investing activities, net |
(1 |
) |
(18 |
) |
|||
Net cash used in investing activities |
(1,287 |
) |
(5,920 |
) |
|||
Cash flows from financing activities |
|||||||
Taxes paid related to net share settlement of equity awards |
(832 |
) |
(771 |
) |
|||
Repurchases of Class A common stock |
(1,774 |
) |
(228 |
) |
|||
Other financing activities, net |
3 |
7 |
|||||
Net cash used in financing activities |
(2,603 |
) |
(992 |
) |
|||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
36 |
28 |
|||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
4,006 |
(1,826 |
) |
||||
Cash, cash equivalents, and restricted cash at beginning of year |
8,204 |
9,109 |
|||||
Cash, cash equivalents, and restricted cash at end of the period |
$ |
12,210 |
$ |
7,283 |
|||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets |
|||||||
Cash and cash equivalents |
$ |
12,082 |
$ |
7,104 |
|||
Restricted cash, included in prepaid expenses and other current assets |
14 |
85 |
|||||
Restricted cash, included in other assets |
114 |
94 |
|||||
Total cash, cash equivalents, and restricted cash |
$ |
12,210 |
$ |
7,283 |
FACEBOOK, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In millions) | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, |
|||||||
2018 |
2017* |
||||||
Supplemental cash flow data |
|||||||
Cash paid during the period for: |
|||||||
Income taxes, net |
$ |
736 |
$ |
664 |
|||
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 |
$ |
450 |
$ |
(26 |
) |
||
Change in unsettled repurchases of Class A common stock |
$ |
141 |
$ |
— |
Reconciliation of GAAP to Non-GAAP Results | |||||||
(In millions, except percentages) | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, |
|||||||
2018 |
2017 |
||||||
GAAP revenue |
$ |
11,966 |
$ |
8,032 |
|||
Foreign exchange effect on 2018 revenue using 2017 rates |
(536 |
) |
|||||
Revenue excluding foreign exchange effect |
$ |
11,430 |
|||||
GAAP revenue year-over-year change % |
49 |
% |
|||||
Revenue excluding foreign exchange effect year-over-year change % |
42 |
% |
|||||
GAAP advertising revenue |
$ |
11,795 |
$ |
7,857 |
|||
Foreign exchange effect on 2018 advertising revenue using 2017 rates |
(535 |
) |
|||||
Advertising revenue excluding foreign exchange effect |
$ |
11,260 |
|||||
GAAP advertising revenue year-over-year change % |
50 |
% |
|||||
Advertising revenue excluding foreign exchange effect year-over-year change % |
43 |
% |
|||||
Net cash provided by operating activities |
$ |
7,860 |
$ |
5,058 |
|||
Purchases of property and equipment |
(2,812 |
) |
(1,271 |
) |
|||
Free cash flow |
$ |
5,048 |
$ |
3,787 |