Facebook Earnings slides

8/13/2019 Facebook Earnings slides

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Quarterly Earnings SlidesQ4 2013



Non-GAAP Measures

In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. Thesenon-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance

prepared in accordance with U.S. GAAP. A reconciliation of non-GAAP financial measures to the corresponding

GAAP measures is provided in the appendix to this presentation.

2



126 129 130 132 135 139 142 144 147

143 152 154 160 169 179 182 188 195

105 119 129 141 153167 181 189 200109

126 139152 161

180195

208216

483526

552584

618

665699

728 757

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

3

Daily Active Users (DAUs)

DAUs / MAUs

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3’13 Q4'13

57% 58% 58% 58% 59% 60% 61% 61% 62%

Rest of World

Asia

Europe

US & Canada

Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobileDAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualifyas such users, respectively, based on their other activities on Facebook.

In Millions



Mobile Daily Active Users (Mobile DAUs)

In Millions

266293

329

374

425

469507

556

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13




179 183 186 189 193 195 198 199 201

229 239 246 253 261 269 272 276 282

212 234 255 277 298 319 339 351 368

225245

268288

304327

346 362 376

845901

9551,007

1,0561,110

1,155 1,1891,228

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

5

Monthly Active Users (MAUs)

In MillionsRest of World

Asia

Europe

US & Canada




Mobile Monthly Active Users (Mobile MAUs)

In Millions

432488

543604

680

751

819874

945

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13




Mobile-Only Monthly Active Users (Mobile-Only MAUs)

In Millions

157

189

219

254

296

Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Mobile-only MAUs are defined as users who accessed Facebook solely through mobile apps or our mobile website in the last 30 days of the given quarter. Thenumber of mobile-only MAUs do not include Instagram users unless they would otherwise qualify as such users based on their other activities on Facebook.



$943 $872$992

$1,086

$1,329 $1,245

$1,599$1,798

$2,344$188

$186$192 $176

$256$213

$214

$218

$241

$1,131 $1,058

$1,184$1,262

$1,585

$1,458

$1,813

$2,016

$2,585

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Payments and other fees

Advertising

Revenue

In Millions

8

*In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of ourForm 10-K filed on February 1, 2013.

*



$567 $525 $590 $637$780

$679

$848$962

$1,206

$361$328

$346 $341

$440$423

$505$538

$727

$115$118

$135 $154

$198

$197

$247

$278

$341

$87$87

$113 $130

$167$159

$213

$238

$311

$1,131$1,058

$1,184$1,262

$1,585$1,458

$1,813

$2,016

$2,585

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Rest of World

Asia

Europe

US & Canada

9

Revenue by User Geography

Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographicallyapportioned based on the location of the marketer or developer.

In Millions



Rest of World

Asia

Europe

US & Canada

10

Advertising Revenue by User Geography

Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographicallyapportioned based on the location of the marketer or developer.

$462 $419 $479 $538 $631 $552$721

$832$1,068

$306$274

$294$295

$374$367

$451$482

$658

$95$99

$115$133

$168

$176

$225

$255

$318

$79$79

$104 $120

$156$150

$202

$229

$300

$943 $872

$992$1,086

$1,329$1,245

$1,599

$1,798

$2,344

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

In Millions



Rest of World

Asia

Europe

US & Canada

$105 $106 $111 $99

$149$127 $127 $130 $138

$55 $54 $52 $46

$66

$56 $54 $56$69$20 $19 $20

$21

$30

$21 $22 $23$23

$8 $8 $9

$10

$11

$9 $11 $9

$11

$188 $186 $192

$176

$256

$213 $214$218

$241

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

11

Payments & Other Fees Revenue by User Geography

Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform arevenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements whererevenue is geographically apportioned based on the location of the marketer or developer.

*In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47and 48 of our Form 10-K filed on February 1, 2013.

In Millions

*



12

Average Revenue per User (ARPU)

$1.46 $1.38$1.67 $1.76

$2.36

$0.26$0.21

$0.20$0.20

$0.25

$1.71$1.60

$1.87$1.96

$2.61

Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Europe

$0.58 $0.57$0.68 $0.74

$0.88

$0.10 $0.07

$0.07$0.07

$0.06

$0.69$0.64

$0.75$0.81

$0.95

Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Asia

Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they performa revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue isgeographically apportioned based on the location of the marketer or developer. Please see Facebook’s most recent quarterly or annual report filed with theSEC for the definition of ARPU.

*In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 ofour Form 10-K filed on February 1, 2013.

$0.53 $0.48$0.60 $0.65

$0.81

$0.04$0.03

$0.03$0.03

$0.03

$0.56$0.50

$0.63$0.67

$0.84

Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Rest of World

$1.29 $1.15$1.41 $1.53 $1.94

$0.25$0.20

$0.19$0.19

$0.20

$1.54$1.35

$1.60$1.72

$2.14

Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Worldwide

$3.30$2.85

$3.67$4.19

$5.34

$0.78

$0.65

$0.65

$0.65

$0.69

$4.08$3.50

$4.32

$4.85

$6.03

Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

US & Canada

Payments*

Advertising



Share-Based Compensation Expense

13

$74 $97 $113 $138 $137 $135$175 $193 $228

$986

$28 $24 $9$17 $14

$11

$76$103

$1,106

$179 $184 $170

$224 $239

$273

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

In MillionsPre-2011 RSUs

Post-2011 RSUs

Options & Other



Income (Loss) from Operations

$548 $381

($743)

$377 $523 $373 $562 $736$1,133

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

GAAP Income (Loss) from Operations (in millions)

$624 $485 $515 $525$736

$563$794

$987

$1,459

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Non-GAAP Income from Operations (in millions)

15

Non-GAAP income from operations excludes share-based compensation expense and payroll tax expenses related to share-based compensation—see the Appendix for a reconciliation of this non-GAAP measure to GAAP income (loss) from operations.



16

Operating Margin

55%46% 43% 42% 46%

39%44%

49%56%

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Non-GAAP Operating Margin

48% 36%

(63%)

30% 33% 26% 31% 37% 44%

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

GAAP Operating Margin

Non-GAAP operating margin excludes share-based compensation expense and payroll tax expenses related to share-based compensation—see the Appendix for areconciliation of this non-GAAP measure to GAAP operating margin.



17

Effective Tax Rate

Q4’12 GAAP effective tax rate was influenced by significant share-based compensation expense resulting from our initial public offering, a portion of whichis not tax-deductible—see the Appendix for a reconciliation of this non-GAAP measure to GAAP effective tax rate.

GAAP Effective Tax Rate

Non-GAAP Effective Tax Rate

Q4 Q1 Q2 Q3 Q4 FY FY

($ in millions) 2012 2013 2013 2013 2013 2012 2013

GAAP income before provision for income taxes 505$ 353$ 545$ 726$ 1,130$ 494 2,754 GAAP provision for from income taxes 441 134 212 301 607 441 1,254

Effective Tax Rate 87% 38% 39% 41% 54% 89% 46%

Q4 Q1 Q2 Q3 Q4 FY FY

($ in millions) 2012 2013 2013 2013 2013 2012 2013

Non-GAAP income before provision for income taxes 718 543 777 977 1,456 2,217 3,753 Non-GAAP provision for income taxes 292 231 289 356 676 900 1,551

Effective Tax Rate 41% 43% 37% 36% 46% 41% 41%



18

Net Income (Loss)

$302 $205

($157) ($59)

$64$219 $333 $425 $523

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Non-GAAP net income excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and relatedincome tax adjustments—see the Appendix for a reconciliation of this non-GAAP measure to GAAP net income (loss).

$360 $287 $295 $311 $426 $312$488

$621$780

Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

GAAP Net Income (Loss) (in millions)

Non-GAAP Net Income (in millions)



20

Capital Investments

In MillionsProperty and equipment acquired

under capital leases

Purchases of property

and equipment

$606

$1,235 $1,362

$473

$340

$1,079

$1,575

$1,373

2011 2012 2013

Annual

$198

$483$89

$287

$483

Q4'12 Q4'13

Quarterly



Appendix



23

Reconciliations (continued)

Effective Tax Rate (in millions) Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 FY2012 FY2013GAAP income before provision for income taxes 505$ 353$ 545$ 726$ 1,130$ 494$ 2,754$GAAP provision for income taxes 441 134 212 301 607 441 1,254 GAAP effective tax rate 87% 38% 39% 41% 54% 89% 46%

GAAP income before provision for income taxes 505$ 353$ 545$ 726$ 1,130$ 494$ 2,754$Share-based compensation and related payroll tax expenses 213 190 232 251 326 1,723 999 Non-GAAP income before provision for income taxes 718$ 543$ 777$ 977$ 1,456$ 2,217$ 3,753$

Non-GAAP provision for income taxes 292 231 289 356 676 900 1,551 Non-GAAP effective tax rate 41% 43% 37% 36% 46% 41% 41%



24

Reconciliations (continued)

Free Cash Flow (in millions) Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 FY2012 FY2013Net cash provided by operating activities 510$ 441$ 240$ 250$ 681$ 719$ 1,322$ 950$ 1,231$ 1,612$ 4,222$

Purchases of property and equipment 185 453 413 171 198 327 268 284 483 1,235 1,362

Property and equpiment acquired under capital leases 80 38 52 161 89 11 - - - 340 11

Free Cash Flow 245$ (50)$ (225)$ (82)$ 394$ 381$ 1,054$ 666$ 748$ 37$ 2,849$

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