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Three Months Ended December 31, |
Year-over-Year % Change |
Year Ended December 31, |
Year-over-Year % Change |
||||||||||||||||||
In millions, except percentages and per share amounts |
2018 |
2017 |
2018 |
2017 |
|||||||||||||||||
Revenue: |
|||||||||||||||||||||
Advertising |
$ |
16,640 |
$ |
12,779 |
30 |
% |
$ |
55,013 |
$ |
39,942 |
38 |
% |
|||||||||
Payments and other fees |
274 |
193 |
42 |
% |
825 |
711 |
16 |
% |
|||||||||||||
Total revenue |
16,914 |
12,972 |
30 |
% |
55,838 |
40,653 |
37 |
% |
|||||||||||||
Total costs and expenses |
9,094 |
5,620 |
62 |
% |
30,925 |
20,450 |
51 |
% |
|||||||||||||
Income from operations |
$ |
7,820 |
$ |
7,352 |
6 |
% |
$ |
24,913 |
$ |
20,203 |
23 |
% |
|||||||||
Operating margin |
46 |
% |
57 |
% |
45 |
% |
50 |
% |
|||||||||||||
Provision for income taxes(1)
|
$ |
1,089 |
$ |
3,194 |
(66 |
)% |
$ |
3,249 |
$ |
4,660 |
(30 |
)% |
|||||||||
Effective tax rate(1)
|
14 |
% |
43 |
% |
13 |
% |
23 |
% |
|||||||||||||
Net income(1)
|
$ |
6,882 |
$ |
4,268 |
61 |
% |
$ |
22,112 |
$ |
15,934 |
39 |
% |
|||||||||
Diluted Earnings per Share (EPS)(1)
|
$ |
2.38 |
$ |
1.44 |
65 |
% |
$ |
7.57 |
$ |
5.39 |
40 |
% |
• |
Daily active users (DAUs) – DAUs were 1.52 billion on average for December 2018, an increase of 9% year-over-year.
|
• |
Monthly active users (MAUs) – MAUs were 2.32 billion as of December 31, 2018, an increase of 9% year-over-year.
|
• |
Mobile advertising revenue – Mobile advertising revenue represented approximately 93% of advertising revenue for the fourth quarter of 2018, up from approximately 89% of advertising revenue in the fourth quarter of 2017.
|
• |
Capital expenditures – Capital expenditures were $4.37 billion and $13.92 billion for the fourth quarter and full year 2018, respectively.
|
• |
Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $41.11 billion at the end of the fourth quarter of 2018.
|
• |
Headcount – Headcount was 35,587 as of December 31, 2018, an increase of 42% year-over-year.
|
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(In millions, except for per share amounts) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
2018 |
2017 |
2018 |
2017 |
||||||||||||
Revenue |
$ |
16,914 |
$ |
12,972 |
$ |
55,838 |
$ |
40,653 |
|||||||
Costs and expenses: |
|||||||||||||||
Cost of revenue |
2,796 |
1,611 |
9,355 |
5,454 |
|||||||||||
Research and development |
2,855 |
1,949 |
10,273 |
7,754 |
|||||||||||
Marketing and sales |
2,467 |
1,374 |
7,846 |
4,725 |
|||||||||||
General and administrative |
976 |
686 |
3,451 |
2,517 |
|||||||||||
Total costs and expenses |
9,094 |
5,620 |
30,925 |
20,450 |
|||||||||||
Income from operations |
7,820 |
7,352 |
24,913 |
20,203 |
|||||||||||
Interest and other income (expense), net |
151 |
110 |
448 |
391 |
|||||||||||
Income before provision for income taxes |
7,971 |
7,462 |
25,361 |
20,594 |
|||||||||||
Provision for income taxes |
1,089 |
3,194 |
3,249 |
4,660 |
|||||||||||
Net income |
$ |
6,882 |
$ |
4,268 |
$ |
22,112 |
$ |
15,934 |
|||||||
Less: Net income attributable to participating securities |
— |
2 |
1 |
14 |
|||||||||||
Net income attributable to Class A and Class B common stockholders |
$ |
6,882 |
$ |
4,266 |
$ |
22,111 |
$ |
15,920 |
|||||||
Earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
$ |
2.40 |
$ |
1.47 |
$ |
7.65 |
$ |
5.49 |
|||||||
Diluted |
$ |
2.38 |
$ |
1.44 |
$ |
7.57 |
$ |
5.39 |
|||||||
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
2,872 |
2,907 |
2,890 |
2,901 |
|||||||||||
Diluted |
2,886 |
2,954 |
2,921 |
2,956 |
|||||||||||
Share-based compensation expense included in costs and expenses: |
|||||||||||||||
Cost of revenue |
$ |
82 |
$ |
50 |
$ |
284 |
$ |
178 |
|||||||
Research and development |
675 |
587 |
3,022 |
2,820 |
|||||||||||
Marketing and sales |
130 |
106 |
511 |
436 |
|||||||||||
General and administrative |
84 |
71 |
335 |
289 |
|||||||||||
Total share-based compensation expense |
$ |
971 |
$ |
814 |
$ |
4,152 |
$ |
3,723 |
FACEBOOK, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
December 31, 2018 |
December 31, 2017 |
||||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
10,019 |
$ |
8,079 |
|||||
Marketable securities |
31,095 |
33,632 |
|||||||
Accounts receivable, net of allowances of $229 and $189 as of December 31, 2018 and 2017, respectively |
7,587 |
5,832 |
|||||||
Prepaid expenses and other current assets |
1,779 |
1,020 |
|||||||
Total current assets |
50,480 |
48,563 |
|||||||
Property and equipment, net |
24,683 |
13,721 |
|||||||
Intangible assets, net |
1,294 |
1,884 |
|||||||
Goodwill |
18,301 |
18,221 |
|||||||
Other assets |
2,576 |
2,135 |
|||||||
Total assets |
$ |
97,334 |
$ |
84,524 |
|||||
Liabilities and stockholders' equity |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
820 |
$ |
380 |
|||||
Partners payable |
541 |
390 |
|||||||
Accrued expenses and other current liabilities |
5,509 |
2,892 |
|||||||
Deferred revenue and deposits |
147 |
98 |
|||||||
Total current liabilities |
7,017 |
3,760 |
|||||||
Other liabilities |
6,190 |
6,417 |
|||||||
Total liabilities |
13,207 |
10,177 |
|||||||
Commitments and contingencies |
|||||||||
Stockholders' equity: |
|||||||||
Common stock and additional paid-in capital |
42,906 |
40,584 |
|||||||
Accumulated other comprehensive loss |
(760 |
) |
(227 |
) |
|||||
Retained earnings |
41,981 |
33,990 |
|||||||
Total stockholders' equity |
84,127 |
74,347 |
|||||||
Total liabilities and stockholders' equity |
$ |
97,334 |
$ |
84,524 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
2018 |
2017* |
2018 |
2017* |
||||||||||||
Cash flows from operating activities |
|||||||||||||||
Net income |
$ |
6,882 |
$ |
4,268 |
$ |
22,112 |
$ |
15,934 |
|||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||||
Depreciation and amortization |
1,225 |
853 |
4,315 |
3,025 |
|||||||||||
Share-based compensation |
971 |
814 |
4,152 |
3,723 |
|||||||||||
Deferred income taxes |
201 |
(225 |
) |
286 |
(377 |
) |
|||||||||
Other |
(19 |
) |
5 |
(64 |
) |
24 |
|||||||||
Changes in assets and liabilities: |
|||||||||||||||
Accounts receivable |
(1,564 |
) |
(1,374 |
) |
(1,892 |
) |
(1,609 |
) |
|||||||
Prepaid expenses and other current assets |
198 |
441 |
(690 |
) |
(192 |
) |
|||||||||
Other assets |
(60 |
) |
26 |
(159 |
) |
154 |
|||||||||
Accounts payable |
133 |
50 |
221 |
43 |
|||||||||||
Partners payable |
41 |
73 |
157 |
95 |
|||||||||||
Accrued expenses and other current liabilities |
378 |
215 |
1,417 |
309 |
|||||||||||
Deferred revenue and deposits |
33 |
(7 |
) |
53 |
4 |
||||||||||
Other liabilities |
(735 |
) |
2,531 |
(634 |
) |
3,083 |
|||||||||
Net cash provided by operating activities |
7,684 |
7,670 |
29,274 |
24,216 |
|||||||||||
Cash flows from investing activities |
|||||||||||||||
Purchases of property and equipment, net |
(4,366 |
) |
(2,262 |
) |
(13,915 |
) |
(6,733 |
) |
|||||||
Purchases of marketable securities |
(1,997 |
) |
(5,272 |
) |
(14,656 |
) |
(25,682 |
) |
|||||||
Sales of marketable securities |
1,254 |
1,795 |
12,358 |
9,444 |
|||||||||||
Maturities of marketable securities |
1,381 |
760 |
4,772 |
2,988 |
|||||||||||
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets |
— |
(17 |
) |
(137 |
) |
(122 |
) |
||||||||
Other investing activities, net |
(21 |
) |
(7 |
) |
(25 |
) |
(13 |
) |
|||||||
Net cash used in investing activities |
(3,749 |
) |
(5,003 |
) |
(11,603 |
) |
(20,118 |
) |
|||||||
Cash flows from financing activities |
|||||||||||||||
Taxes paid related to net share settlement of equity awards |
(545 |
) |
(885 |
) |
(3,208 |
) |
(3,246 |
) |
|||||||
Repurchases of Class A common stock |
(3,500 |
) |
(958 |
) |
(12,879 |
) |
(1,976 |
) |
|||||||
Net change in overdraft in cash pooling entities |
500 |
— |
500 |
— |
|||||||||||
Other financing activities, net |
4 |
1 |
15 |
(13 |
) |
||||||||||
Net cash used in financing activities |
(3,541 |
) |
(1,842 |
) |
(15,572 |
) |
(5,235 |
) |
|||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
(14 |
) |
40 |
(179 |
) |
232 |
|||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
380 |
865 |
1,920 |
(905 |
) |
||||||||||
Cash, cash equivalents, and restricted cash at beginning of the period |
9,744 |
7,339 |
8,204 |
9,109 |
|||||||||||
Cash, cash equivalents, and restricted cash at end of the period |
$ |
10,124 |
$ |
8,204 |
$ |
10,124 |
$ |
8,204 |
|||||||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets |
|||||||||||||||
Cash and cash equivalents |
$ |
10,019 |
$ |
8,079 |
$ |
10,019 |
$ |
8,079 |
|||||||
Restricted cash, included in prepaid expenses and other current assets |
10 |
18 |
10 |
18 |
|||||||||||
Restricted cash, included in other assets |
95 |
107 |
95 |
107 |
|||||||||||
Total cash, cash equivalents, and restricted cash |
$ |
10,124 |
$ |
8,204 |
$ |
10,124 |
$ |
8,204 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
2018 |
2017* |
2018 |
2017* |
||||||||||||
Supplemental cash flow data |
|||||||||||||||
Cash paid during the period for: |
|||||||||||||||
Interest |
$ |
1 |
$ |
— |
$ |
1 |
$ |
— |
|||||||
Income taxes, net |
$ |
1,034 |
$ |
324 |
$ |
3,762 |
$ |
2,117 |
|||||||
Non-cash investing and financing activities: |
|||||||||||||||
Net change in prepaids and liabilities related to property and equipment additions |
$ |
306 |
$ |
(44 |
) |
$ |
918 |
$ |
495 |
||||||
Settlement of acquisition-related contingent consideration liability |
$ |
— |
$ |
— |
$ |
— |
$ |
102 |
|||||||
Change in unsettled repurchases of Class A common stock |
$ |
44 |
$ |
74 |
$ |
51 |
$ |
94 |
Reconciliation of GAAP to Non-GAAP Results | |||||||||||||||
(In millions, except percentages) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
2018 |
2017 |
2018 |
2017 |
||||||||||||
GAAP revenue |
$ |
16,914 |
$ |
12,972 |
$ |
55,838 |
$ |
40,653 |
|||||||
Foreign exchange effect on 2018 revenue using 2017 rates |
348 |
(401 |
) |
||||||||||||
Revenue excluding foreign exchange effect |
$ |
17,262 |
$ |
55,437 |
|||||||||||
GAAP revenue year-over-year change % |
30 |
% |
37 |
% |
|||||||||||
Revenue excluding foreign exchange effect year-over-year change % |
33 |
% |
36 |
% |
|||||||||||
GAAP advertising revenue |
$ |
16,640 |
$ |
12,779 |
$ |
55,013 |
$ |
39,942 |
|||||||
Foreign exchange effect on 2018 advertising revenue using 2017 rates |
347 |
(401 |
) |
||||||||||||
Advertising revenue excluding foreign exchange effect |
$ |
16,987 |
$ |
54,612 |
|||||||||||
GAAP advertising revenue year-over-year change % |
30 |
% |
38 |
% |
|||||||||||
Advertising revenue excluding foreign exchange effect year-over-year change % |
33 |
% |
37 |
% |
|||||||||||
Net cash provided by operating activities |
$ |
7,684 |
$ |
7,670 |
$ |
29,274 |
$ |
24,216 |
|||||||
Purchases of property and equipment, net |
(4,366 |
) |
(2,262 |
) |
(13,915 |
) |
(6,733 |
) |
|||||||
Free cash flow |
$ |
3,318 |
$ |
5,408 |
$ |
15,359 |
$ |
17,483 |