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Three Months Ended September 30, |
Year-over-Year % Change |
|||||||||
In millions, except percentages and per share amounts |
2019 |
2018 |
||||||||
Revenue: |
||||||||||
Advertising |
$ |
17,383 |
$ |
13,539 |
28 |
% |
||||
Payments and other fees |
269 |
188 |
43 |
% |
||||||
Total revenue |
17,652 |
13,727 |
29 |
% |
||||||
Total costs and expenses |
10,467 |
7,946 |
32 |
% |
||||||
Income from operations |
$ |
7,185 |
$ |
5,781 |
24 |
% |
||||
Operating margin |
41 |
% |
42 |
% |
||||||
Provision for income taxes |
$ |
1,238 |
||||||||
Effective tax rate |
17 |
% |
||||||||
Net income |
$ |
6,091 |
$ |
5,137 |
19 |
% |
||||
Diluted earnings per share (EPS) |
$ |
2.12 |
$ |
1.76 |
20 |
% |
• |
Daily active users (DAUs) – DAUs were 1.62 billion on average for September 2019, an increase of 9% year-over-year.
|
• |
Monthly active users (MAUs) – MAUs were 2.45 billion as of September 30, 2019, an increase of 8% year-over-year.
|
• |
Mobile advertising revenue – Mobile advertising revenue represented approximately 94% of advertising revenue for the third quarter of 2019, up from approximately 92% of advertising revenue in the third quarter of 2018.
|
• |
Capital expenditures – Capital expenditures, including principal payments on finance leases, were $3.68 billion for the third quarter of 2019.
|
• |
Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $52.27 billion as of September 30, 2019.
|
• |
Headcount – Headcount was 43,030 as of September 30, 2019, an increase of 28% year-over-year.
|
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(In millions, except for per share amounts) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Revenue |
$ |
17,652 |
$ |
13,727 |
$ |
49,615 |
$ |
38,924 |
|||||||
Costs and expenses: |
|||||||||||||||
Cost of revenue |
3,155 |
2,418 |
9,279 |
6,559 |
|||||||||||
Research and development |
3,548 |
2,657 |
9,722 |
7,418 |
|||||||||||
Marketing and sales |
2,416 |
1,928 |
6,850 |
5,379 |
|||||||||||
General and administrative |
1,348 |
943 |
8,636 |
2,475 |
|||||||||||
Total costs and expenses |
10,467 |
7,946 |
34,487 |
21,831 |
|||||||||||
Income from operations |
7,185 |
5,781 |
15,128 |
17,093 |
|||||||||||
Interest and other income, net |
144 |
131 |
515 |
297 |
|||||||||||
Income before provision for income taxes |
7,329 |
5,912 |
15,643 |
17,390 |
|||||||||||
Provision for income taxes |
1,238 |
775 |
4,507 |
2,160 |
|||||||||||
Net income |
$ |
6,091 |
$ |
5,137 |
$ |
11,136 |
$ |
15,230 |
|||||||
Less: Net income attributable to participating securities |
— |
— |
— |
(1 |
) |
||||||||||
Net income attributable to Class A and Class B common stockholders |
$ |
6,091 |
$ |
5,137 |
$ |
11,136 |
$ |
15,229 |
|||||||
Earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
$ |
2.13 |
$ |
1.78 |
$ |
3.90 |
$ |
5.26 |
|||||||
Diluted |
$ |
2.12 |
$ |
1.76 |
$ |
3.87 |
$ |
5.20 |
|||||||
Weighted-average shares used to compute earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
2,854 |
2,885 |
2,855 |
2,895 |
|||||||||||
Diluted |
2,874 |
2,913 |
2,875 |
2,931 |
|||||||||||
Share-based compensation expense included in costs and expenses: |
|||||||||||||||
Cost of revenue |
$ |
91 |
$ |
72 |
$ |
287 |
$ |
202 |
|||||||
Research and development |
907 |
748 |
2,557 |
2,347 |
|||||||||||
Marketing and sales |
148 |
133 |
421 |
380 |
|||||||||||
General and administrative |
103 |
87 |
297 |
251 |
|||||||||||
Total share-based compensation expense |
$ |
1,249 |
$ |
1,040 |
$ |
3,562 |
$ |
3,180 |
FACEBOOK, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
September 30, 2019 |
December 31, 2018 |
||||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
15,979 |
$ |
10,019 |
|||||
Marketable securities |
36,290 |
31,095 |
|||||||
Accounts receivable, net of allowances of $301 and $229 as of September 30, 2019 and December 31, 2018, respectively |
7,673 |
7,587 |
|||||||
Prepaid expenses and other current assets |
2,137 |
1,779 |
|||||||
Total current assets |
62,079 |
50,480 |
|||||||
Property and equipment, net |
32,284 |
24,683 |
|||||||
Operating lease right-of-use assets, net |
8,403 |
— |
|||||||
Intangible assets, net |
853 |
1,294 |
|||||||
Goodwill |
18,338 |
18,301 |
|||||||
Other assets |
2,461 |
2,576 |
|||||||
Total assets |
$ |
124,418 |
$ |
97,334 |
|||||
Liabilities and stockholders' equity |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
860 |
$ |
820 |
|||||
Partners payable |
590 |
541 |
|||||||
Operating lease liabilities, current |
776 |
— |
|||||||
Accrued expenses and other current liabilities |
10,877 |
5,509 |
|||||||
Deferred revenue and deposits |
225 |
147 |
|||||||
Total current liabilities |
13,328 |
7,017 |
|||||||
Operating lease liabilities, non-current |
8,356 |
— |
|||||||
Other liabilities |
8,735 |
6,190 |
|||||||
Total liabilities |
30,419 |
13,207 |
|||||||
Commitments and contingencies |
|||||||||
Stockholders' equity: |
|||||||||
Common stock and additional paid-in capital |
45,059 |
42,906 |
|||||||
Accumulated other comprehensive loss |
(849 |
) |
(760 |
) |
|||||
Retained earnings |
49,789 |
41,981 |
|||||||
Total stockholders' equity |
93,999 |
84,127 |
|||||||
Total liabilities and stockholders' equity |
$ |
124,418 |
$ |
97,334 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Cash flows from operating activities |
|||||||||||||||
Net income |
$ |
6,091 |
$ |
5,137 |
$ |
11,136 |
$ |
15,230 |
|||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||||
Depreciation and amortization |
1,416 |
1,107 |
4,273 |
3,090 |
|||||||||||
Share-based compensation |
1,249 |
1,040 |
3,562 |
3,180 |
|||||||||||
Deferred income taxes |
175 |
30 |
358 |
83 |
|||||||||||
Other |
30 |
3 |
44 |
19 |
|||||||||||
Changes in assets and liabilities: |
|||||||||||||||
Accounts receivable |
(328 |
) |
(489 |
) |
(264 |
) |
(328 |
) |
|||||||
Prepaid expenses and other current assets |
(360 |
) |
8 |
(527 |
) |
(889 |
) |
||||||||
Other assets |
— |
(40 |
) |
66 |
(99 |
) |
|||||||||
Operating lease right-of-use assets |
(1,179 |
) |
— |
(2,890 |
) |
— |
|||||||||
Accounts payable |
89 |
37 |
2 |
88 |
|||||||||||
Partners payable |
39 |
63 |
59 |
116 |
|||||||||||
Accrued expenses and other current liabilities |
457 |
350 |
6,439 |
1,044 |
|||||||||||
Deferred revenue and deposits |
31 |
24 |
82 |
20 |
|||||||||||
Operating lease liabilities, non-current |
1,276 |
— |
2,914 |
— |
|||||||||||
Other liabilities |
321 |
226 |
1,977 |
102 |
|||||||||||
Net cash provided by operating activities |
9,307 |
7,496 |
27,231 |
21,656 |
|||||||||||
Cash flows from investing activities |
|||||||||||||||
Purchases of property and equipment, net |
(3,532 |
) |
(3,343 |
) |
(11,002 |
) |
(9,614 |
) |
|||||||
Purchases of marketable securities |
(7,397 |
) |
(4,375 |
) |
(19,152 |
) |
(12,658 |
) |
|||||||
Sales of marketable securities |
2,946 |
2,492 |
7,402 |
11,104 |
|||||||||||
Maturities of marketable securities |
2,943 |
1,053 |
7,048 |
3,391 |
|||||||||||
Other investing activities, net |
(10 |
) |
(75 |
) |
(124 |
) |
(141 |
) |
|||||||
Net cash used in investing activities |
(5,050 |
) |
(4,248 |
) |
(15,828 |
) |
(7,918 |
) |
|||||||
Cash flows from financing activities |
|||||||||||||||
Taxes paid related to net share settlement of equity awards |
(591 |
) |
(905 |
) |
(1,710 |
) |
(2,663 |
) |
|||||||
Repurchases of Class A common stock |
(1,148 |
) |
(4,256 |
) |
(2,906 |
) |
(9,379 |
) |
|||||||
Principal payments on finance leases |
(144 |
) |
— |
(411 |
) |
— |
|||||||||
Net change in overdraft in cash pooling entities |
(141 |
) |
— |
(260 |
) |
— |
|||||||||
Other financing activities, net |
5 |
3 |
14 |
11 |
|||||||||||
Net cash used in financing activities |
(2,019 |
) |
(5,158 |
) |
(5,273 |
) |
(12,031 |
) |
|||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
(156 |
) |
(14 |
) |
(174 |
) |
(167 |
) |
|||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
2,082 |
(1,924 |
) |
5,956 |
1,540 |
||||||||||
Cash, cash equivalents, and restricted cash at beginning of the period |
13,998 |
11,668 |
10,124 |
8,204 |
|||||||||||
Cash, cash equivalents, and restricted cash at end of the period |
$ |
16,080 |
$ |
9,744 |
$ |
16,080 |
$ |
9,744 |
|||||||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets |
|||||||||||||||
Cash and cash equivalents |
$ |
15,979 |
$ |
9,637 |
$ |
15,979 |
$ |
9,637 |
|||||||
Restricted cash, included in prepaid expenses and other current assets |
7 |
7 |
7 |
7 |
|||||||||||
Restricted cash, included in other assets |
94 |
100 |
94 |
100 |
|||||||||||
Total cash, cash equivalents, and restricted cash |
$ |
16,080 |
$ |
9,744 |
$ |
16,080 |
$ |
9,744 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Supplemental cash flow data |
|||||||||||||||
Cash paid during the period for: |
|||||||||||||||
Interest |
$ |
4 |
$ |
— |
$ |
9 |
$ |
— |
|||||||
Income taxes, net |
$ |
832 |
$ |
447 |
$ |
2,528 |
$ |
2,728 |
|||||||
Non-cash investing activities: |
|||||||||||||||
Net change in prepaids and liabilities related to property and equipment |
$ |
144 |
$ |
382 |
$ |
(59 |
) |
$ |
613 |
||||||
Property and equipment in accounts payable and accrued liabilities |
$ |
1,850 |
$ |
1,504 |
$ |
1,850 |
$ |
1,504 |
Reconciliation of GAAP to Non-GAAP Results | |||||||||||||||
(In millions, except percentages) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
GAAP revenue |
$ |
17,652 |
$ |
13,727 |
$ |
49,615 |
$ |
38,924 |
|||||||
Foreign exchange effect on 2019 revenue using 2018 rates |
297 |
1,374 |
|||||||||||||
Revenue excluding foreign exchange effect |
$ |
17,949 |
$ |
50,989 |
|||||||||||
GAAP revenue year-over-year change % |
29 |
% |
27 |
% |
|||||||||||
Revenue excluding foreign exchange effect year-over-year change % |
31 |
% |
31 |
% |
|||||||||||
GAAP advertising revenue |
$ |
17,383 |
$ |
13,539 |
$ |
48,919 |
$ |
38,373 |
|||||||
Foreign exchange effect on 2019 advertising revenue using 2018 rates |
295 |
1,370 |
|||||||||||||
Advertising revenue excluding foreign exchange effect |
$ |
17,678 |
$ |
50,289 |
|||||||||||
GAAP advertising revenue year-over-year change % |
28 |
% |
27 |
% |
|||||||||||
Advertising revenue excluding foreign exchange effect year-over-year change % |
31 |
% |
31 |
% |
|||||||||||
Net cash provided by operating activities |
$ |
9,307 |
$ |
7,496 |
$ |
27,231 |
$ |
21,656 |
|||||||
Purchases of property and equipment, net |
(3,532 |
) |
(3,343 |
) |
(11,002 |
) |
(9,614 |
) |
|||||||
Principal payments on finance leases |
(144 |
) |
— |
(411 |
) |
— |
|||||||||
Free cash flow |
$ |
5,631 |
$ |
4,153 |
$ |
15,818 |
$ |
12,042 |