Facebook

Mobile advertising drove Facebook's impressive growth in Q2 as the company continued to increase monthly active user numbers north of the one billion mark. For Q3 2013, the social network beat analysts' expectations once more with $2.02 billion in revenue for the period. Daily active users for the month of September averaged 728 million (a 25 percent increase year-over-year) and monthly active users rose to 1.19 billion. Mobile check-ins grew once more as well, seeing 874 million monthly (a 45 percent year-over-year increase) and 507 million daily users compared to 819 million and 469 million for those sectors during Q2. These numbers show that the gap between mobile and total active users continues to draw closer with each passing three-month period as Facebook continues the mobile push and social media increasingly becomes a chore for handsets and tablets on-the-go.

Those ads on users' daily drivers accounted for 49 percent of all ad revenue in Q3 2013 -- up from 41 percent last quarter. If the current pattern holds, the fourth quarter report could show that over half of the outfit's revenue is coming from mobile advertising -- especially with Instagram ads on the way shortly for its 150 million monthly active users. Revenue from ads on the whole is up 66 percent from Q3 2012 totaling $1.8 billion. Of course, the so-called "native" ads that appear as regular posts in the News Feed have become part of the strategy for working in sponsored content over right-hand column ads. "The strong results we achieved this quarter show that we're prepared for the next phase of our company, as we work to bring the next five billion people online and into the knowledge economy," said founder and CEO Mark Zuckerberg. When compared to the same quarter last year, net income is also up as it rang in at $425 million in comparison to the net loss of $59 million the outfit saw during Q3 2012. The quarterly earnings call will take place shortly, but we'll be sure to update this post if any newsy bits are mentioned there.

Update: On the call, Zuckerberg mentioned that 48 percent of daily Facebook users log-in on mobile which lends a big hand to those mobile ad numbers. He also mentioned continued dedication to improving ads (things like honing in targeted ads and those with video) as the company focuses on "making money to make better services." COO Sheryl Sandberg mentioned that Facebook and Instagram users spend more of their time on those two social networks on mobile (one in every five minutes) than other popular streams like YouTube, Tumblr, Pandora and others combined in the US.

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Facebook Reports Third Quarter 2013 Results

MENLO PARK, Calif., Oct. 30, 2013 /PRNewswire/ -- Facebook, Inc. (NASDAQ: FB) today reported financial results for the third quarter, which ended September 30, 2013.

"For nearly ten years, Facebook has been on a mission to connect the world," said Mark Zuckerberg, Facebook founder and CEO. "The strong results we achieved this quarter show that we're prepared for the next phase of our company, as we work to bring the next five billion people online and into the knowledge economy."

Third Quarter 2013 Operational Highlights

Daily active users (DAUs) were 728 million on average for September 2013, an increase of 25% year-over-year.
Monthly active users (MAUs) were 1.19 billion as of September 30, 2013, an increase of 18% year-over-year.
Mobile MAUs were 874 million as of September 30, 2013, an increase of 45% year-over-year. Mobile DAUs were 507 million on average for September 2013.

Third Quarter 2013 Financial Highlights

Revenue – Revenue for the third quarter of 2013 totaled $2.02 billion, an increase of 60%, compared with $1.26 billion in the third quarter of 2012.

Revenue from advertising was $1.80 billion, a 66% increase from the same quarter last year.
Mobile advertising revenue represented approximately 49% of advertising revenue for the third quarter of 2013.
Payments and other fees revenue was $218 million for the third quarter of 2013.

Costs and expenses – GAAP costs and expenses for the third quarter of 2013 were $1.28 billion, an increase of 45% from the third quarter of 2012 driven primarily by infrastructure expense and increased headcount. Excluding share-based compensation and related payroll tax expenses, non-GAAP costs and expenses were $1.03 billion in the third quarter of 2013, up 40% compared to $737 million for the third quarter of 2012.

Income from operations – For the third quarter of 2013, GAAP income from operations was $736 million, compared to GAAP income from operations of $377 million in the third quarter of 2012. Excluding share-based compensation and related payroll tax expenses, non-GAAP income from operations for the third quarter of 2013 was $987 million, up 88% compared to $525 million for the third quarter of 2012.

Operating margin – GAAP operating margin was 37% for the third quarter of 2013, compared to 30% in the third quarter of 2012. Excluding share-based compensation and related payroll tax expenses, non-GAAP operating margin was 49% for the third quarter of 2013, compared to 42% for the third quarter of 2012.

Provision for income taxes – GAAP income tax expense for the third quarter of 2013 was $301 million, representing a 41% effective tax rate. Excluding share-based compensation and related payroll tax expenses, the non-GAAP effective tax rate would have been approximately 36%.

Net income (loss) and EPS – For the third quarter of 2013, GAAP net income was $425 million, compared to a net loss of $59 million for the third quarter of 2012. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP net income for the third quarter of 2013 was $621 million, up 100% compared to $311 million for the third quarter of 2012. GAAP diluted EPS was $0.17 in the third quarter of 2013, compared to a loss per share of $0.02 in the third quarter of 2012. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP diluted EPS for the third quarter of 2013 was $0.25, up 108% compared to $0.12 in the third quarter of 2012.

Capital expenditures – Capital expenditures for the third quarter of 2013 were $284 million.

Cash and marketable securities – Cash and marketable securities were $9.33 billion at the end of the third quarter of 2013.

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 uses 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 71787026.

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Facebook exceeds expectations as it tallies 874 million monthly mobile users