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Three Months Ended June 30, |
Year-over-Year % Change |
|||||||||
In millions, except percentages and per share amounts |
2019*
|
2018 |
||||||||
Revenue: |
||||||||||
Advertising |
$ |
16,624 |
$ |
13,038 |
28 |
% |
||||
Payments and other fees |
262 |
193 |
36 |
% |
||||||
Total revenue |
16,886 |
13,231 |
28 |
% |
||||||
Total costs and expenses |
12,260 |
7,368 |
66 |
% |
||||||
Income from operations |
$ |
4,626 |
$ |
5,863 |
(21 |
)% |
||||
Operating margin |
27 |
% |
44 |
% |
||||||
Provision for income taxes |
$ |
2,216 |
||||||||
Effective tax rate |
46 |
% |
||||||||
Net income |
$ |
2,616 |
$ |
5,106 |
(49 |
)% |
||||
Diluted earnings per share (EPS) |
$ |
0.91 |
$ |
1.74 |
(48 |
)% |
• |
Daily active users (DAUs) – DAUs were 1.59 billion on average for June 2019, an increase of 8% year-over-year.
|
• |
Monthly active users (MAUs) – MAUs were 2.41 billion as of June 30, 2019, an increase of 8% year-over-year.
|
• |
Mobile advertising revenue – Mobile advertising revenue represented approximately 94% of advertising revenue for the second quarter of 2019, up from approximately 91% of advertising revenue in the second quarter of 2018.
|
• |
Capital expenditures – Capital expenditures, including principal payments on finance leases, were $3.78 billion for the second quarter of 2019.
|
• |
Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $48.60 billion at the end of the second quarter of 2019.
|
• |
Headcount – Headcount was 39,651 as of June 30, 2019, an increase of 31% 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, |
||||||||||||||
2019* |
2018 |
2019* |
2018 |
||||||||||||
Revenue |
$ |
16,886 |
$ |
13,231 |
$ |
31,963 |
$ |
25,197 |
|||||||
Costs and expenses: |
|||||||||||||||
Cost of revenue |
3,307 |
2,214 |
6,123 |
4,141 |
|||||||||||
Research and development |
3,315 |
2,523 |
6,175 |
4,761 |
|||||||||||
Marketing and sales |
2,414 |
1,855 |
4,434 |
3,450 |
|||||||||||
General and administrative |
3,224 |
776 |
7,288 |
1,532 |
|||||||||||
Total costs and expenses |
12,260 |
7,368 |
24,020 |
13,884 |
|||||||||||
Income from operations |
4,626 |
5,863 |
7,943 |
11,313 |
|||||||||||
Interest and other income, net |
206 |
5 |
371 |
165 |
|||||||||||
Income before provision for income taxes |
4,832 |
5,868 |
8,314 |
11,478 |
|||||||||||
Provision for income taxes |
2,216 |
762 |
3,269 |
1,385 |
|||||||||||
Net income |
$ |
2,616 |
$ |
5,106 |
$ |
5,045 |
$ |
10,093 |
|||||||
Less: Net income attributable to participating securities |
— |
— |
— |
1 |
|||||||||||
Net income attributable to Class A and Class B common stockholders |
$ |
2,616 |
$ |
5,106 |
$ |
5,045 |
$ |
10,092 |
|||||||
Earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
$ |
0.92 |
$ |
1.76 |
$ |
1.77 |
$ |
3.48 |
|||||||
Diluted |
$ |
0.91 |
$ |
1.74 |
$ |
1.76 |
$ |
3.43 |
|||||||
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
2,855 |
2,895 |
2,855 |
2,900 |
|||||||||||
Diluted |
2,875 |
2,930 |
2,873 |
2,939 |
|||||||||||
Share-based compensation expense included in costs and expenses: |
|||||||||||||||
Cost of revenue |
$ |
109 |
$ |
74 |
$ |
196 |
$ |
130 |
|||||||
Research and development |
927 |
881 |
1,650 |
1,599 |
|||||||||||
Marketing and sales |
160 |
139 |
273 |
248 |
|||||||||||
General and administrative |
107 |
92 |
194 |
164 |
|||||||||||
Total share-based compensation expense |
$ |
1,303 |
$ |
1,186 |
$ |
2,313 |
$ |
2,141 |
FACEBOOK, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
June 30, 2019 |
December 31, 2018 |
||||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
13,877 |
$ |
10,019 |
|||||
Marketable securities |
34,719 |
31,095 |
|||||||
Accounts receivable, net of allowances of $295 and $229 as of June 30, 2019 and December 31, 2018, respectively |
7,513 |
7,587 |
|||||||
Prepaid expenses and other current assets |
1,852 |
1,779 |
|||||||
Total current assets |
57,961 |
50,480 |
|||||||
Property and equipment, net |
29,999 |
24,683 |
|||||||
Operating lease right-of-use assets, net |
7,272 |
— |
|||||||
Intangible assets, net |
994 |
1,294 |
|||||||
Goodwill |
18,334 |
18,301 |
|||||||
Other assets |
2,446 |
2,576 |
|||||||
Total assets |
$ |
117,006 |
$ |
97,334 |
|||||
Liabilities and stockholders' equity |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
655 |
$ |
820 |
|||||
Partners payable |
560 |
541 |
|||||||
Operating lease liabilities, current |
688 |
— |
|||||||
Accrued expenses and other current liabilities |
10,878 |
5,509 |
|||||||
Deferred revenue and deposits |
198 |
147 |
|||||||
Total current liabilities |
12,979 |
7,017 |
|||||||
Operating lease liabilities, non-current |
7,122 |
— |
|||||||
Other liabilities |
8,143 |
6,190 |
|||||||
Total liabilities |
28,244 |
13,207 |
|||||||
Commitments and contingencies |
|||||||||
Stockholders' equity: |
|||||||||
Common stock and additional paid-in capital |
44,277 |
42,906 |
|||||||
Accumulated other comprehensive loss |
(483 |
) |
(760 |
) |
|||||
Retained earnings |
44,968 |
41,981 |
|||||||
Total stockholders' equity |
88,762 |
84,127 |
|||||||
Total liabilities and stockholders' equity |
$ |
117,006 |
$ |
97,334 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Cash flows from operating activities |
|||||||||||||||
Net income |
$ |
2,616 |
$ |
5,106 |
$ |
5,045 |
$ |
10,093 |
|||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||||
Depreciation and amortization |
1,502 |
1,034 |
2,857 |
1,983 |
|||||||||||
Share-based compensation |
1,303 |
1,186 |
2,313 |
2,141 |
|||||||||||
Deferred income taxes |
1 |
101 |
184 |
54 |
|||||||||||
Other |
9 |
10 |
14 |
18 |
|||||||||||
Changes in assets and liabilities: |
|||||||||||||||
Accounts receivable |
(1,006 |
) |
(627 |
) |
64 |
161 |
|||||||||
Prepaid expenses and other current assets |
(252 |
) |
(535 |
) |
(168 |
) |
(898 |
) |
|||||||
Other assets |
24 |
(77 |
) |
65 |
(59 |
) |
|||||||||
Operating lease right-of-use assets, net |
(521 |
) |
— |
(1,711 |
) |
— |
|||||||||
Accounts payable |
8 |
49 |
(87 |
) |
50 |
||||||||||
Partners payable |
20 |
51 |
20 |
53 |
|||||||||||
Accrued expenses and other current liabilities |
2,827 |
(17 |
) |
5,982 |
690 |
||||||||||
Deferred revenue and deposits |
55 |
— |
51 |
(4 |
) |
||||||||||
Operating lease liabilities, non-current |
556 |
— |
1,638 |
— |
|||||||||||
Other liabilities |
1,473 |
18 |
1,657 |
(124 |
) |
||||||||||
Net cash provided by operating activities |
8,615 |
6,299 |
17,924 |
14,158 |
|||||||||||
Cash flows from investing activities |
|||||||||||||||
Purchases of property and equipment, net |
(3,633 |
) |
(3,459 |
) |
(7,470 |
) |
(6,272 |
) |
|||||||
Purchases of marketable securities |
(5,152 |
) |
(4,261 |
) |
(11,755 |
) |
(8,283 |
) |
|||||||
Sales of marketable securities |
2,944 |
4,282 |
4,456 |
8,612 |
|||||||||||
Maturities of marketable securities |
1,895 |
1,071 |
4,105 |
2,338 |
|||||||||||
Other investing activities, net |
(64 |
) |
(16 |
) |
(114 |
) |
(66 |
) |
|||||||
Net cash used in investing activities |
(4,010 |
) |
(2,383 |
) |
(10,778 |
) |
(3,671 |
) |
|||||||
Cash flows from financing activities |
|||||||||||||||
Taxes paid related to net share settlement of equity awards |
(606 |
) |
(927 |
) |
(1,119 |
) |
(1,758 |
) |
|||||||
Repurchases of Class A common stock |
(1,144 |
) |
(3,349 |
) |
(1,758 |
) |
(5,123 |
) |
|||||||
Principal payments on finance leases |
(142 |
) |
— |
(267 |
) |
— |
|||||||||
Net change in overdraft in cash pooling entities |
58 |
— |
(119 |
) |
— |
||||||||||
Other financing activities, net |
4 |
4 |
9 |
7 |
|||||||||||
Net cash used in financing activities |
(1,830 |
) |
(4,272 |
) |
(3,254 |
) |
(6,874 |
) |
|||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
26 |
(186 |
) |
(18 |
) |
(149 |
) |
||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
2,801 |
(542 |
) |
3,874 |
3,464 |
||||||||||
Cash, cash equivalents, and restricted cash at beginning of the period |
11,197 |
12,210 |
10,124 |
8,204 |
|||||||||||
Cash, cash equivalents, and restricted cash at end of the period |
$ |
13,998 |
$ |
11,668 |
$ |
13,998 |
$ |
11,668 |
|||||||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets |
|||||||||||||||
Cash and cash equivalents |
$ |
13,877 |
$ |
11,552 |
$ |
13,877 |
$ |
11,552 |
|||||||
Restricted cash, included in prepaid expenses and other current assets |
9 |
11 |
9 |
11 |
|||||||||||
Restricted cash, included in other assets |
112 |
105 |
112 |
105 |
|||||||||||
Total cash, cash equivalents, and restricted cash |
$ |
13,998 |
$ |
11,668 |
$ |
13,998 |
$ |
11,668 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Supplemental cash flow data |
|||||||||||||||
Cash paid during the period for: |
|||||||||||||||
Interest |
$ |
3 |
$ |
— |
$ |
6 |
$ |
— |
|||||||
Income taxes, net |
$ |
1,014 |
$ |
1,545 |
$ |
1,696 |
$ |
2,281 |
|||||||
Non-cash investing activities: |
|||||||||||||||
Net change in prepaids and liabilities related to property and equipment |
$ |
111 |
$ |
(198 |
) |
$ |
(203 |
) |
$ |
231 |
|||||
Property and equipment in accounts payable and accrued liabilities |
$ |
1,667 |
$ |
1,146 |
$ |
1,667 |
$ |
1,146 |
Reconciliation of GAAP to Non-GAAP Results | |||||||||||||||
(In millions, except percentages) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
GAAP revenue |
$ |
16,886 |
$ |
13,231 |
$ |
31,963 |
$ |
25,197 |
|||||||
Foreign exchange effect on 2019 revenue using 2018 rates |
574 |
1,077 |
|||||||||||||
Revenue excluding foreign exchange effect |
$ |
17,460 |
$ |
33,040 |
|||||||||||
GAAP revenue year-over-year change % |
28 |
% |
27 |
% |
|||||||||||
Revenue excluding foreign exchange effect year-over-year change % |
32 |
% |
31 |
% |
|||||||||||
GAAP advertising revenue |
$ |
16,624 |
$ |
13,038 |
$ |
31,536 |
$ |
24,833 |
|||||||
Foreign exchange effect on 2019 advertising revenue using 2018 rates |
572 |
1,075 |
|||||||||||||
Advertising revenue excluding foreign exchange effect |
$ |
17,196 |
$ |
32,611 |
|||||||||||
GAAP advertising revenue year-over-year change % |
28 |
% |
27 |
% |
|||||||||||
Advertising revenue excluding foreign exchange effect year-over-year change % |
32 |
% |
31 |
% |
|||||||||||
Net cash provided by operating activities |
$ |
8,615 |
$ |
6,299 |
$ |
17,924 |
$ |
14,158 |
|||||||
Purchases of property and equipment, net |
(3,633 |
) |
(3,459 |
) |
(7,470 |
) |
(6,272 |
) |
|||||||
Principal payments on finance leases |
(142 |
) |
— |
(267 |
) |
— |
|||||||||
Free cash flow |
$ |
4,840 |
$ |
2,840 |
$ |
10,187 |
$ |
7,886 |