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Three Months Ended September 30, |
Year-over-Year % Change |
||||||||
In millions, except percentages and per share amounts |
2020(1)
|
2019
|
|||||||
Revenue: |
|||||||||
Advertising |
$ |
21,221 |
$ |
17,383 |
22% |
||||
Other |
249 |
269 |
(7)% |
||||||
Total revenue |
21,470 |
17,652 |
22% |
||||||
Total costs and expenses |
13,430 |
10,467 |
28% |
||||||
Income from operations |
$ |
8,040 |
$ |
7,185 |
12% |
||||
Operating margin |
37 |
% |
41 |
% |
|||||
Provision for income taxes |
$ |
287 |
$ |
1,238 |
(77)% |
||||
Effective tax rate |
4 |
% |
17 |
% |
|||||
Net income |
$ |
7,846 |
$ |
6,091 |
29% |
||||
Diluted earnings per share (EPS) |
$ |
2.71 |
$ |
2.12 |
28% |
• |
Facebook daily active users (DAUs) – DAUs were 1.82 billion on average for September 2020, an increase of 12% year-over-year.
|
• |
Facebook monthly active users (MAUs) – MAUs were 2.74 billion as of September 30, 2020, an increase of 12% year-over-year.
|
• |
Family daily active people (DAP) – DAP was 2.54 billion on average for September 2020, an increase of 15% year-over-year.
|
• |
Family monthly active people (MAP) – MAP was 3.21 billion as of September 30, 2020, an increase of 14% year-over-year.
|
• |
Capital expenditures – Capital expenditures, including principal payments on finance leases, were $3.88 billion for the third quarter of 2020.
|
• |
Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $55.62 billion as of September 30, 2020.
|
• |
Headcount – Headcount was 56,653 as of September 30, 2020, an increase of 32% 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, |
||||||||||||||
2020 |
2019
|
2020 |
2019 |
||||||||||||
Revenue |
$ |
21,470 |
$ |
17,652 |
$ |
57,893 |
$ |
49,615 |
|||||||
Costs and expenses: |
|||||||||||||||
Cost of revenue |
4,194 |
3,155 |
11,482 |
9,279 |
|||||||||||
Research and development |
4,763 |
3,548 |
13,240 |
9,722 |
|||||||||||
Marketing and sales |
2,683 |
2,416 |
8,310 |
6,850 |
|||||||||||
General and administrative |
1,790 |
1,348 |
4,965 |
8,636 |
|||||||||||
Total costs and expenses |
13,430 |
10,467 |
37,997 |
34,487 |
|||||||||||
Income from operations |
8,040 |
7,185 |
19,896 |
15,128 |
|||||||||||
Interest and other income, net |
93 |
144 |
229 |
515 |
|||||||||||
Income before provision for income taxes |
8,133 |
7,329 |
20,125 |
15,643 |
|||||||||||
Provision for income taxes |
287 |
1,238 |
2,198 |
4,507 |
|||||||||||
Net income |
$ |
7,846 |
$ |
6,091 |
$ |
17,927 |
$ |
11,136 |
|||||||
Earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
$ |
2.75 |
$ |
2.13 |
$ |
6.29 |
$ |
3.90 |
|||||||
Diluted |
$ |
2.71 |
$ |
2.12 |
$ |
6.22 |
$ |
3.87 |
|||||||
Weighted-average shares used to compute earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
2,850 |
2,854 |
2,850 |
2,855 |
|||||||||||
Diluted |
2,891 |
2,874 |
2,883 |
2,875 |
|||||||||||
Share-based compensation expense included in costs and expenses: |
|||||||||||||||
Cost of revenue |
$ |
116 |
$ |
91 |
$ |
327 |
$ |
287 |
|||||||
Research and development |
1,297 |
907 |
3,557 |
2,557 |
|||||||||||
Marketing and sales |
180 |
148 |
516 |
421 |
|||||||||||
General and administrative |
129 |
103 |
352 |
297 |
|||||||||||
Total share-based compensation expense |
$ |
1,722 |
$ |
1,249 |
$ |
4,752 |
$ |
3,562 |
FACEBOOK, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
September 30, 2020 |
December 31, 2019 |
||||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
11,617 |
$ |
19,079 |
|||||
Marketable securities |
44,003 |
35,776 |
|||||||
Accounts receivable, net of allowances of $311 and $206 as of September 30, 2020 and December 31, 2019, respectively |
8,024 |
9,518 |
|||||||
Prepaid expenses and other current assets |
2,155 |
1,852 |
|||||||
Total current assets |
65,799 |
66,225 |
|||||||
Equity investments |
6,164 |
86 |
|||||||
Property and equipment, net |
42,291 |
35,323 |
|||||||
Operating lease right-of-use assets, net |
9,439 |
9,460 |
|||||||
Intangible assets, net |
744 |
894 |
|||||||
Goodwill |
19,031 |
18,715 |
|||||||
Other assets |
2,969 |
2,673 |
|||||||
Total assets |
$ |
146,437 |
$ |
133,376 |
|||||
Liabilities and stockholders' equity |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
1,106 |
$ |
1,363 |
|||||
Partners payable |
800 |
886 |
|||||||
Operating lease liabilities, current |
975 |
800 |
|||||||
Accrued expenses and other current liabilities |
8,684 |
11,735 |
|||||||
Deferred revenue and deposits |
379 |
269 |
|||||||
Total current liabilities |
11,944 |
15,053 |
|||||||
Operating lease liabilities, non-current |
9,641 |
9,524 |
|||||||
Other liabilities |
7,121 |
7,745 |
|||||||
Total liabilities |
28,706 |
32,322 |
|||||||
Commitments and contingencies |
|||||||||
Stockholders' equity: |
|||||||||
Common stock and additional paid-in capital |
48,910 |
45,851 |
|||||||
Accumulated other comprehensive income (loss) |
308 |
(489 |
) |
||||||
Retained earnings |
68,513 |
55,692 |
|||||||
Total stockholders' equity |
117,731 |
101,054 |
|||||||
Total liabilities and stockholders' equity |
$ |
146,437 |
$ |
133,376 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
Cash flows from operating activities |
|||||||||||||||
Net income |
$ |
7,846 |
$ |
6,091 |
$ |
17,927 |
$ |
11,136 |
|||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||||
Depreciation and amortization |
1,698 |
1,416 |
4,999 |
4,273 |
|||||||||||
Share-based compensation |
1,722 |
1,249 |
4,752 |
3,562 |
|||||||||||
Deferred income taxes |
(1,506 |
) |
175 |
(816 |
) |
358 |
|||||||||
Other |
7 |
30 |
56 |
44 |
|||||||||||
Changes in assets and liabilities: |
|||||||||||||||
Accounts receivable |
(377 |
) |
(328 |
) |
1,547 |
(264 |
) |
||||||||
Prepaid expenses and other current assets |
264 |
(360 |
) |
(89 |
) |
(527 |
) |
||||||||
Other assets |
6 |
— |
(8 |
) |
66 |
||||||||||
Accounts payable |
139 |
89 |
39 |
2 |
|||||||||||
Partners payable |
58 |
39 |
(100 |
) |
59 |
||||||||||
Accrued expenses and other current liabilities |
(258 |
) |
457 |
(3,273 |
) |
6,439 |
|||||||||
Deferred revenue and deposits |
112 |
31 |
111 |
82 |
|||||||||||
Other liabilities |
117 |
418 |
(438 |
) |
2,001 |
||||||||||
Net cash provided by operating activities |
9,828 |
9,307 |
24,707 |
27,231 |
|||||||||||
Cash flows from investing activities |
|||||||||||||||
Purchases of property and equipment, net |
(3,689 |
) |
(3,532 |
) |
(10,502 |
) |
(11,002 |
) |
|||||||
Purchases of marketable securities |
(14,130 |
) |
(7,397 |
) |
(28,193 |
) |
(19,152 |
) |
|||||||
Sales of marketable securities |
4,398 |
2,946 |
9,779 |
7,402 |
|||||||||||
Maturities of marketable securities |
2,857 |
2,943 |
10,725 |
7,048 |
|||||||||||
Purchases of equity investments |
(6,020 |
) |
— |
(6,302 |
) |
(61 |
) |
||||||||
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets |
(12 |
) |
(10 |
) |
(384 |
) |
(63 |
) |
|||||||
Other investing activities, net |
(3 |
) |
— |
(9 |
) |
— |
|||||||||
Net cash used in investing activities |
(16,599 |
) |
(5,050 |
) |
(24,886 |
) |
(15,828 |
) |
|||||||
Cash flows from financing activities |
|||||||||||||||
Taxes paid related to net share settlement of equity awards |
(1,000 |
) |
(591 |
) |
(2,444 |
) |
(1,710 |
) |
|||||||
Repurchases of Class A common stock |
(1,725 |
) |
(1,148 |
) |
(4,343 |
) |
(2,906 |
) |
|||||||
Principal payments on finance leases |
(189 |
) |
(144 |
) |
(398 |
) |
(411 |
) |
|||||||
Net change in overdraft in cash pooling entities |
(8 |
) |
(141 |
) |
(24 |
) |
(260 |
) |
|||||||
Other financing activities, net |
10 |
5 |
124 |
14 |
|||||||||||
Net cash used in financing activities |
(2,912 |
) |
(2,019 |
) |
(7,085 |
) |
(5,273 |
) |
|||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
93 |
(156 |
) |
(36 |
) |
(174 |
) |
||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
(9,590 |
) |
2,082 |
(7,300 |
) |
5,956 |
|||||||||
Cash, cash equivalents, and restricted cash at beginning of the period |
21,569 |
13,998 |
19,279 |
10,124 |
|||||||||||
Cash, cash equivalents, and restricted cash at end of the period |
$ |
11,979 |
$ |
16,080 |
$ |
11,979 |
$ |
16,080 |
|||||||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets |
|||||||||||||||
Cash and cash equivalents |
$ |
11,617 |
$ |
15,979 |
$ |
11,617 |
$ |
15,979 |
|||||||
Restricted cash, included in prepaid expenses and other current assets |
222 |
7 |
222 |
7 |
|||||||||||
Restricted cash, included in other assets |
140 |
94 |
140 |
94 |
|||||||||||
Total cash, cash equivalents, and restricted cash |
$ |
11,979 |
$ |
16,080 |
$ |
11,979 |
$ |
16,080 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
Supplemental cash flow data |
|||||||||||||||
Cash paid for income taxes, net |
$ |
1,872 |
$ |
832 |
$ |
3,122 |
$ |
2,528 |
|||||||
Non-cash investing activities: |
|||||||||||||||
Acquisition of businesses and other investments in accrued expenses and other liabilities |
$ |
118 |
$ |
— |
$ |
118 |
$ |
— |
|||||||
Property and equipment in accounts payable and accrued expenses and other liabilities |
$ |
2,137 |
$ |
1,850 |
$ |
2,137 |
$ |
1,850 |
Reconciliation of GAAP to Non-GAAP Results | |||||||||||||||
(In millions, except percentages) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
GAAP revenue |
$ |
21,470 |
$ |
17,652 |
$ |
57,893 |
$ |
49,615 |
|||||||
Foreign exchange effect on 2020 revenue using 2019 rates |
(114 |
) |
459 |
||||||||||||
Revenue excluding foreign exchange effect |
$ |
21,356 |
$ |
58,352 |
|||||||||||
GAAP revenue year-over-year change % |
22 |
% |
17 |
% |
|||||||||||
Revenue excluding foreign exchange effect year-over-year change % |
21 |
% |
18 |
% |
|||||||||||
GAAP advertising revenue |
$ |
21,221 |
$ |
17,383 |
$ |
56,981 |
$ |
48,919 |
|||||||
Foreign exchange effect on 2020 advertising revenue using 2019 rates |
(109 |
) |
462 |
||||||||||||
Advertising revenue excluding foreign exchange effect |
$ |
21,112 |
$ |
57,443 |
|||||||||||
GAAP advertising revenue year-over-year change % |
22 |
% |
16 |
% |
|||||||||||
Advertising revenue excluding foreign exchange effect year-over-year change % |
21 |
% |
17 |
% |
|||||||||||
Net cash provided by operating activities |
$ |
9,828 |
$ |
9,307 |
$ |
24,707 |
$ |
27,231 |
|||||||
Purchases of property and equipment, net |
(3,689 |
) |
(3,532 |
) |
(10,502 |
) |
(11,002 |
) |
|||||||
Principal payments on finance leases |
(189 |
) |
(144 |
) |
(398 |
) |
(411 |
) |
|||||||
Free cash flow (1)
|
$ |
5,950 |
$ |
5,631 |
$ |
13,807 |
$ |
15,818 |