Add a note by highlighting text or Replying to an existing note.
Add a note by highlighting text or Replying to an existing note.
Three Months Ended June 30, |
Year-over-Year % Change |
|||||||||
In millions, except percentages and per share amounts |
2017 |
2016 |
||||||||
Revenue: |
||||||||||
Advertising |
$ |
9,164 |
$ |
6,239 |
47 |
% |
||||
Payments and other fees |
157 |
197 |
(20 |
)% |
||||||
Total revenue |
9,321 |
6,436 |
45 |
% |
||||||
Total costs and expenses(1)
|
4,920 |
3,702 |
33 |
% |
||||||
Income from operations(1)
|
$ |
4,401 |
$ |
2,734 |
61 |
% |
||||
Operating margin(1)
|
47 |
% |
42 |
% |
||||||
Provision for income taxes |
$ |
594 |
||||||||
Effective tax rate |
13 |
% |
||||||||
Net income(1)
|
$ |
3,894 |
$ |
2,283 |
71 |
% |
||||
Diluted Earnings per Share (EPS)(1)
|
$ |
1.32 |
$ |
0.78 |
69 |
% |
• |
Daily active users (DAUs) – DAUs were 1.32 billion on average for June 2017, an increase of 17% year-over-year.
|
• |
Monthly active users (MAUs) – MAUs were 2.01 billion as of June 30, 2017, an increase of 17% year-over-year.
|
• |
Mobile advertising revenue – Mobile advertising revenue represented approximately 87% of advertising revenue for the second quarter of 2017, up from approximately 84% of advertising revenue in the second quarter of 2016.
|
• |
Capital expenditures – Capital expenditures for the second quarter of 2017 were $1.44 billion.
|
• |
Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $35.45 billion at the end of the second quarter of 2017.
|
• |
Headcount – Headcount was 20,658 as of June 30, 2017, an increase of 43% year-over-year.
|
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(In millions, except for per share amounts) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2017 |
2016(1)
|
2017 |
2016(1)
|
||||||||||||
Revenue |
$ |
9,321 |
$ |
6,436 |
$ |
17,353 |
$ |
11,818 |
|||||||
Costs and expenses: |
|||||||||||||||
Cost of revenue |
1,237 |
917 |
2,395 |
1,755 |
|||||||||||
Research and development |
1,919 |
1,471 |
3,753 |
2,814 |
|||||||||||
Marketing and sales |
1,124 |
901 |
2,181 |
1,728 |
|||||||||||
General and administrative |
640 |
413 |
1,295 |
778 |
|||||||||||
Total costs and expenses |
4,920 |
3,702 |
9,624 |
7,075 |
|||||||||||
Income from operations |
4,401 |
2,734 |
7,729 |
4,743 |
|||||||||||
Interest and other income, net |
87 |
20 |
168 |
78 |
|||||||||||
Income before provision for income taxes |
4,488 |
2,754 |
7,897 |
4,821 |
|||||||||||
Provision for income taxes |
594 |
471 |
938 |
800 |
|||||||||||
Net income |
$ |
3,894 |
$ |
2,283 |
$ |
6,959 |
$ |
4,021 |
|||||||
Less: Net income attributable to participating securities |
4 |
7 |
10 |
13 |
|||||||||||
Net income attributable to Class A and Class B common stockholders |
$ |
3,890 |
$ |
2,276 |
$ |
6,949 |
$ |
4,008 |
|||||||
Earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
$ |
1.34 |
$ |
0.80 |
$ |
2.40 |
$ |
1.41 |
|||||||
Diluted |
$ |
1.32 |
$ |
0.78 |
$ |
2.36 |
$ |
1.38 |
|||||||
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
2,900 |
2,856 |
2,895 |
2,850 |
|||||||||||
Diluted |
2,951 |
2,921 |
2,950 |
2,912 |
|||||||||||
Share-based compensation expense included in costs and expenses: |
|||||||||||||||
Cost of revenue |
$ |
47 |
$ |
29 |
$ |
81 |
$ |
51 |
|||||||
Research and development |
787 |
631 |
1,457 |
1,217 |
|||||||||||
Marketing and sales |
120 |
95 |
216 |
177 |
|||||||||||
General and administrative |
78 |
62 |
145 |
118 |
|||||||||||
Total share-based compensation expense |
$ |
1,032 |
$ |
817 |
$ |
1,899 |
$ |
1,563 |
FACEBOOK, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
June 30, 2017 |
December 31, 2016 |
||||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
6,252 |
$ |
8,903 |
|||||
Marketable securities |
29,200 |
20,546 |
|||||||
Accounts receivable, net of allowances for doubtful accounts of $90 and $94 as of June 30, 2017 and December 31, 2016, respectively |
3,897 |
3,993 |
|||||||
Prepaid expenses and other current assets |
1,455 |
959 |
|||||||
Total current assets |
40,804 |
34,401 |
|||||||
Property and equipment, net |
10,628 |
8,591 |
|||||||
Intangible assets, net |
2,186 |
2,535 |
|||||||
Goodwill |
18,129 |
18,122 |
|||||||
Other assets |
2,096 |
1,312 |
|||||||
Total assets |
$ |
73,843 |
$ |
64,961 |
|||||
Liabilities and stockholders' equity |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
323 |
$ |
302 |
|||||
Partners payable |
278 |
280 |
|||||||
Accrued expenses and other current liabilities |
2,626 |
2,203 |
|||||||
Deferred revenue and deposits |
88 |
90 |
|||||||
Total current liabilities |
3,315 |
2,875 |
|||||||
Other liabilities |
4,047 |
2,892 |
|||||||
Total liabilities |
7,362 |
5,767 |
|||||||
Stockholders' equity: |
|||||||||
Common stock and additional paid-in capital |
39,291 |
38,227 |
|||||||
Accumulated other comprehensive loss |
(370 |
) |
(703 |
) |
|||||
Retained earnings |
27,560 |
21,670 |
|||||||
Total stockholders' equity |
66,481 |
59,194 |
|||||||
Total liabilities and stockholders' equity |
$ |
73,843 |
$ |
64,961 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2017 |
2016(1)
|
2017 |
2016(1)
|
||||||||||||
Cash flows from operating activities |
|||||||||||||||
Net income |
$ |
3,894 |
$ |
2,283 |
$ |
6,959 |
$ |
4,021 |
|||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||||
Depreciation and amortization |
728 |
585 |
1,400 |
1,137 |
|||||||||||
Share-based compensation |
1,032 |
817 |
1,899 |
1,563 |
|||||||||||
Deferred income taxes |
26 |
(101 |
) |
(58 |
) |
(178 |
) |
||||||||
Other |
8 |
6 |
12 |
19 |
|||||||||||
Changes in assets and liabilities: |
|||||||||||||||
Accounts receivable |
(386 |
) |
(492 |
) |
223 |
(225 |
) |
||||||||
Prepaid expenses and other current assets |
(212 |
) |
(150 |
) |
(577 |
) |
(257 |
) |
|||||||
Other assets |
51 |
(11 |
) |
82 |
4 |
||||||||||
Accounts payable |
(28 |
) |
(41 |
) |
(38 |
) |
(39 |
) |
|||||||
Partners payable |
(7 |
) |
17 |
(10 |
) |
14 |
|||||||||
Accrued expenses and other current liabilities |
96 |
432 |
157 |
414 |
|||||||||||
Deferred revenue and deposits |
6 |
25 |
(4 |
) |
23 |
||||||||||
Other liabilities |
152 |
295 |
373 |
646 |
|||||||||||
Net cash provided by operating activities |
5,360 |
3,665 |
10,418 |
7,142 |
|||||||||||
Cash flows from investing activities |
|||||||||||||||
Purchases of property and equipment |
(1,444 |
) |
(995 |
) |
(2,715 |
) |
(2,127 |
) |
|||||||
Purchases of marketable securities |
(7,145 |
) |
(6,509 |
) |
(14,137 |
) |
(9,635 |
) |
|||||||
Sales of marketable securities |
2,236 |
2,145 |
3,998 |
4,158 |
|||||||||||
Maturities of marketable securities |
899 |
366 |
1,498 |
903 |
|||||||||||
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets |
(8 |
) |
(19 |
) |
(8 |
) |
(20 |
) |
|||||||
Change in restricted cash and deposits |
22 |
41 |
33 |
74 |
|||||||||||
Net cash used in investing activities |
(5,440 |
) |
(4,971 |
) |
(11,331 |
) |
(6,647 |
) |
|||||||
Cash flows from financing activities |
|||||||||||||||
Taxes paid related to net share settlement of equity awards |
(724 |
) |
— |
(1,495 |
) |
— |
|||||||||
Principal payments on capital lease and other financing obligations |
— |
— |
— |
(312 |
) |
||||||||||
Repurchases of Class A common stock |
(150 |
) |
— |
(378 |
) |
— |
|||||||||
Other financing activities, net |
5 |
4 |
12 |
6 |
|||||||||||
Net cash (used in) provided by financing activities |
(869 |
) |
4 |
(1,861 |
) |
(306 |
) |
||||||||
Effect of exchange rate changes on cash and cash equivalents |
97 |
(46 |
) |
123 |
12 |
||||||||||
Net (decrease) increase in cash and cash equivalents |
(852 |
) |
(1,348 |
) |
(2,651 |
) |
201 |
||||||||
Cash and cash equivalents at beginning of period |
7,104 |
6,456 |
8,903 |
4,907 |
|||||||||||
Cash and cash equivalents at end of period |
$ |
6,252 |
$ |
5,108 |
$ |
6,252 |
$ |
5,108 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2017 |
2016(1)
|
2017 |
2016(1)
|
||||||||||||
Supplemental cash flow data |
|||||||||||||||
Cash paid during the period for: |
|||||||||||||||
Interest |
$ |
— |
$ |
— |
$ |
— |
$ |
11 |
|||||||
Income taxes, net |
$ |
695 |
$ |
237 |
$ |
1,359 |
$ |
407 |
|||||||
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 |
$ |
183 |
$ |
37 |
$ |
157 |
$ |
89 |
|||||||
Change in unsettled repurchases of Class A common stock |
$ |
30 |
$ |
— |
$ |
30 |
$ |
— |
Reconciliation of GAAP to Non-GAAP Results | |||||||||||||||
(In millions, except percentages) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||
GAAP revenue |
$ |
9,321 |
$ |
6,436 |
$ |
17,353 |
$ |
11,818 |
|||||||
Foreign exchange effect on 2017 revenue using 2016 rates |
141 |
164 |
|||||||||||||
Revenue excluding foreign exchange effect |
$ |
9,462 |
$ |
17,517 |
|||||||||||
GAAP revenue year-over-year change % |
45 |
% |
47 |
% |
|||||||||||
Revenue excluding foreign exchange effect year-over-year change % |
47 |
% |
48 |
% |
|||||||||||
GAAP advertising revenue |
$ |
9,164 |
$ |
6,239 |
$ |
17,021 |
$ |
11,440 |
|||||||
Foreign exchange effect on 2017 advertising revenue using 2016 rates |
141 |
163 |
|||||||||||||
Advertising revenue excluding foreign exchange effect |
$ |
9,305 |
$ |
17,184 |
|||||||||||
GAAP advertising revenue year-over-year change % |
47 |
% |
49 |
% |
|||||||||||
Advertising revenue excluding foreign exchange effect year-over-year change % |
49 |
% |
50 |
% |
|||||||||||
Net cash provided by operating activities(1)
|
$ |
5,360 |
$ |
3,665 |
$ |
10,418 |
$ |
7,142 |
|||||||
Purchases of property and equipment |
(1,444 |
) |
(995 |
) |
(2,715 |
) |
(2,127 |
) |
|||||||
Free cash flow(1)
|
$ |
3,916 |
$ |
2,670 |
$ |
7,703 |
$ |
5,015 |