Facebook's Q3 earnings left something to be desired, as the social network posted a net loss. Zuckerberg and company have ended 2012 on a financial high note, however, as Facebook raked in $1.585 billion in revenue -- an increase of 40 percent year-over-year -- and net income of $64 million. The number of folks on Facebook also continues to grow, with its monthly active user count burgeoning to 1.06 billion as of December 31, 2012.
Of particular interest is the breakdown of daily mobile vs. web users -- more folks used Facebook on phones and tablets than on the web for the first time in the company's history. Revenue generated from mobile isn't commensurate with the usage stats, however. Mobile advertising accounted for just 23 percent of the 'book's total ad revenue, though that is an increase from 14 percent in Q3, so that imbalance may not remain much longer. We'll be listening in on the earnings call and updating things here as more details are revealed, so stay tuned.
Update: On the call, Mark Zuckerberg and COO Sheryl Sandberg talked at length about the importance that mobile will play in Facebook's future, going so far as to declare that Facebook is now a mobile company. Naturally, they were referring to the growing mobile user base and ad revenue it generates. As for hardware, well, Zuck was emphatic that we won't be seeing a Facebook-made handset -- "we're not going to build a phone." Glad that's settled.
Facebook Reports Fourth Quarter and Full Year 2012 Results
January 30, 2013
MENLO PARK, Calif., Jan. 30, 2013 /PRNewswire/ -- Facebook, Inc. (NASDAQ: FB) today reported financial results for the fourth quarter and full year ended December 31, 2012.
"In 2012, we connected over a billion people and became a mobile company," said Mark Zuckerberg, Facebook founder and CEO. "We enter 2013 with good momentum and will continue to invest to achieve our mission and become a stronger, more valuable company."
Fourth Quarter 2012 Operational Highlights
Monthly active users (MAUs) were 1.06 billion as of December 31, 2012, an increase of 25% year-over-year
Daily active users (DAUs) were 618 million on average for December 2012, an increase of 28% year-over-year
Mobile MAUs were 680 million as of December 31, 2012, an increase of 57% year-over-year
Mobile DAUs exceeded web DAUs for the first time in the fourth quarter of 2012
Recent Business Highlights
Mobile revenue represented approximately 23% of advertising revenue for the fourth quarter of 2012, up from approximately 14% of advertising revenue in the third quarter of 2012
Facebook launched Graph Search Beta, a structured search tool that enables users for the first time to find people, places, photos and other content that has been shared on Facebook
Launched Facebook for Android 2.0, completely rebuilt to deliver improved stability and faster performance and opened Facebook Messenger to anyone with a telephone number
Fourth Quarter 2012 Financial Highlights
Revenue - Revenue for the fourth quarter totaled $1.585 billion, an increase of 40%, compared with $1.13 billion in the fourth quarter of 2011.
Revenue from advertising was $1.33 billion, representing 84% of total revenue and a 41% increase from the same quarter last year. Excluding the impact of year-over-year changes in foreign exchange rates, advertising revenue would have increased by 43%.
Payments and other fees revenue for the fourth quarter was $256 million. As planned, in the fourth quarter of 2012 the company recognized revenue from four months of Payments transactions for accounting reasons detailed in our Form 10-Q filed on October 24, 2012. Adjusting for the $66 million of revenue in the extra month of December, Payments and other fees revenue would have been essentially flat year-over-year.
Costs and expenses - Fourth quarter costs and expenses were $1.06 billion, an increase of 82% from the fourth quarter of 2011. Excluding share-based compensation and related payroll tax expenses, non-GAAP costs and expenses were $849 million, an increase of 67%.
Income from operations - For the fourth quarter, GAAP income from operations was $523 million, compared to income from operations of $548 million for the fourth quarter of 2011. Excluding share-based compensation and related payroll tax expenses, non-GAAP income from operations for the fourth quarter was $736 million, compared to $624 million for the fourth quarter of 2011.
Operating margin - GAAP operating margin was 33% for the fourth quarter, compared to 48% for the fourth quarter of 2011. Excluding share-based compensation and related payroll tax expenses, non-GAAP operating margin was 46% for the fourth quarter, compared to 55% for the fourth quarter of 2011.
Income tax provision - The GAAP income tax provision for the fourth quarter was $441 million, representing an 87% effective tax rate. Excluding share-based compensation expense and related payroll tax expenses, the non-GAAP effective tax rate would have been approximately 41%.
Net income - GAAP net income for the fourth quarter was $64 million, compared to net income of $302 million for the fourth quarter of 2011. GAAP EPS for the fourth quarter was $0.03, compared to $0.14 for the same quarter in the prior year. Excluding share-based compensation and related payroll tax expenses, and income tax adjustments, non-GAAP net income for the fourth quarter was $426 million, or $0.17 per share, compared to $360 million and $0.15 per share for the same quarter in the prior year.
Capital expenditures - Purchases of property and equipment for the fourth quarter were $198 million. Additionally, $89 million of equipment was procured or financed through capital leases during the fourth quarter of 2012.
Cash and marketable securities - As of December 31, 2012, cash and marketable securities were $9.63 billion.
Webcast and Conference Call Information
Facebook will host a conference call to discuss the results at 2 p.m. PT / 5 p.m. ET today. The live webcast can be accessed at the Facebook Investor Relations website at investor.fb.com, along with the company's earnings press release, financial tables and slide presentation. Facebook intends to use the investor.fb.com website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
Following the call, a replay will be available at the same website. A telephonic replay will be available for one week following the conference call at +1 (404) 537-3406 or + 1 (855) 859-2056, conference ID 85750523.