FB
$152.36
Facebook
($5.83)
(3.69%)
Earnings Details
Quarter December 2019
Wednesday, January 29, 2020 4:05:00 PM
Tweet Share Watch
Summary

Facebook Misses

Facebook (FB) reported Quarter December 2019 earnings of $2.56 per share on revenue of $21.1 billion. The consensus earnings estimate was $2.52 per share on revenue of $20.8 billion. The Earnings Whisper number was $2.63 per share. Revenue grew 24.6% on a year-over-year basis.

Facebook Inc is a social networking website which builds products that creates utility for users, developers and advertisers.

Results
Reported Earnings
$2.56
Earnings Whisper
$2.63
Consensus Estimate
$2.52
Reported Revenue
$21.08 Bil
Revenue Estimate
$20.83 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Facebook Reports Fourth Quarter and Full Year 2019 Results

MENLO PARK, Calif., Jan. 29, 2020 /PRNewswire/ -- Facebook, Inc. (Nasdaq: FB) today reported financial results for the quarter and full year ended December 31, 2019.

"We had a good quarter and a strong end to the year as our community and business continue to grow," said Mark Zuckerberg, Facebook founder and CEO. "We remain focused on building services that help people stay connected to those they care about."

Fourth Quarter and Full Year 2019 Financial Highlights


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

2019


2018



2019


2018


Revenue:














Advertising

$

20,736



$

16,640



25

%


$

69,655



$

55,013



27

%

Other


346




274



26

%



1,042




825



26

%

Total revenue

21,082



16,914



25

%


70,697



55,838



27

%

Total costs and expenses

12,224



9,094



34

%


46,711



30,925



51

%

Income from operations

$

8,858



$

7,820



13

%


$

23,986



$

24,913



(4)

%

Operating margin

42

%


46

%





34

%


45

%




Provision for income taxes

$

1,820



$

1,089



67

%


$

6,327



$

3,249



95

%

Effective tax rate

20

%


14

%





25

%


13

%




Net income

$

7,349



$

6,882



7

%


$

18,485



$

22,112



(16)

%

Diluted earnings per share (EPS)

$

2.56



$

2.38



8

%


$

6.43



$

7.57



(15)

%

Fourth Quarter and Full Year 2019 Operational and Other Financial Highlights

  • Facebook daily active users (DAUs) – DAUs were 1.66 billion on average for December 2019, an increase of 9% year-over-year.
  • Facebook monthly active users (MAUs) – MAUs were 2.50 billion as of December 31, 2019, an increase of 8% year-over-year.
  • Family daily active people (DAP) – DAP was 2.26 billion on average for December 2019, an increase of 11% year-over-year.
  • Family monthly active people (MAP) – MAP was 2.89 billion as of December 31, 2019, an increase of 9% year-over-year.
  • Capital expenditures – Capital expenditures, including principal payments on finance leases, were $4.24 billion and $15.65 billion for the fourth quarter and full year 2019, respectively.
  • Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $54.86 billion as of December 31, 2019.
  • Headcount – Headcount was 44,942 as of December 31, 2019, an increase of 26% year-over-year.

Our Family metrics represent our estimates of the underlying number of unique people using one or more of Facebook, Instagram, Messenger, and/or WhatsApp (collectively, our "Family" of products). We define a DAP as a registered and logged-in user of one or more Family products who visited at least one of these products through a mobile device application or using a web or mobile browser on a given day. We define a MAP as a registered and logged-in user of one or more Family products who visited at least one of these products through a mobile device application or using a web or mobile browser in the last 30 days as of the date of measurement.

Webcast and Conference Call Information

Facebook will host a conference call to discuss the results at 2 p.m. PT / 5 p.m. ET today. The live webcast of Facebook's earnings conference call can be accessed at investor.fb.com, along with the earnings press release, financial tables, and slide presentation. Facebook uses the investor.fb.com and newsroom.fb.com websites as well as Mark Zuckerberg's Facebook Page (https://www.facebook.com/zuck) as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Following the call, a replay will be available at the same website. A telephonic replay will be available for one week following the conference call at +1 (404) 537-3406 or +1 (855) 859-2056, conference ID 1262637.

Transcripts of conference calls with publishing equity research analysts held today will also be posted to the investor.fb.com website.

About Facebook

Founded in 2004, Facebook's mission is to give people the power to build community and bring the world closer together. People use Facebook's apps and technologies to connect with friends and family, find communities and grow businesses.

Contacts

Investors:
Deborah Crawford
investor@fb.com / investor.fb.com

Press:
Ryan Moore
press@fb.com / newsroom.fb.com

Forward-Looking Statements

This press release contains forward-looking statements regarding our future business expectations. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors including: our ability to retain or increase users and engagement levels; our reliance on advertising revenue; our dependency on data signals and mobile operating systems, networks, and standards that we do not control; risks associated with new products and changes to existing products as well as other new business initiatives; our emphasis on community growth and engagement and the user experience over short-term financial results; maintaining and enhancing our brand and reputation; our ongoing privacy, safety, security, and content review efforts; competition; risks associated with government actions that could restrict access to our products or impair our ability to sell advertising in certain countries; litigation and government inquiries; privacy and regulatory concerns; risks associated with acquisitions; security breaches; and our ability to manage growth and geographically-dispersed operations. These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed under the caption "Risk Factors" in our Quarterly Report on Form 10-Q filed with the SEC on October 31, 2019, which is available on our Investor Relations website at investor.fb.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2019. In addition, please note that the date of this press release is January 29, 2020, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events.

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP), we use the following non-GAAP financial measures: revenue excluding foreign exchange effect, advertising revenue excluding foreign exchange effect and free cash flow. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures.

We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business.

We exclude the following items from our non-GAAP financial measures:

Foreign exchange effect on revenue. We translated revenue for the three months and full year ended December 31, 2019 using the prior year's monthly exchange rates for our settlement or billing currencies other than the U.S. dollar, which we believe is a useful metric that facilitates comparison to our historical performance.

Purchases of property and equipment, net; Principal payments on finance leases. We subtract both net purchases of property and equipment and principal payments on finance leases in our calculation of free cash flow because we believe that these two items collectively represent the amount of property and equipment we need to procure to support our business, regardless of whether we procure such property or equipment with a finance lease. We believe that this methodology can provide useful supplemental information to help investors better understand underlying trends in our business. Free cash flow is not intended to represent our residual cash flow available for discretionary expenditures.

For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the "Reconciliation of GAAP to Non-GAAP Results" table in this press release.

FACEBOOK, INC.


CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(In millions, except for per share amounts)


(Unaudited)



Three Months Ended
December 31,


Twelve Months Ended
December 31,



2019


2018


2019


2018


Revenue

$

21,082



$

16,914



$

70,697



$

55,838



Costs and expenses:









Cost of revenue

3,492



2,796



12,770



9,355



Research and development

3,877



2,855



13,600



10,273



Marketing and sales

3,026



2,467



9,876



7,846



General and administrative

1,829



976



10,465



3,451



Total costs and expenses

12,224



9,094



46,711



30,925



Income from operations

8,858



7,820



23,986



24,913



Interest and other income, net

311



151



826



448



Income before provision for income taxes

9,169



7,971



24,812



25,361



Provision for income taxes

1,820



1,089



6,327



3,249



Net income

$

7,349



$

6,882



$

18,485



$

22,112



Less: Net income attributable to participating securities







(1)



Net income attributable to Class A and Class B common stockholders

$

7,349



$

6,882



$

18,485



$

22,111



Earnings per share attributable to Class A and Class B common stockholders:









Basic

$

2.58



$

2.40



$

6.48



$

7.65



Diluted

$

2.56



$

2.38



$

6.43



$

7.57



Weighted-average shares used to compute earnings per share attributable to Class A and









Class B common stockholders:









Basic

2,853



2,872



2,854



2,890



Diluted

2,871



2,886



2,876



2,921



Share-based compensation expense included in costs and expenses:









Cost of revenue

$

90



$

82



$

377



$

284



Research and development

931



675



3,488



3,022



Marketing and sales

147



130



569



511



General and administrative

105



84



402



335



Total share-based compensation expense

$

1,273



$

971



$

4,836



$

4,152



 

FACEBOOK, INC.


CONDENSED CONSOLIDATED BALANCE SHEETS


(In millions)


(Unaudited)





December 31,
2019


December 31,
2018


Assets





Current assets:






Cash and cash equivalents

$

19,079



$

10,019




Marketable securities

35,776



31,095




Accounts receivable, net of allowances of $206 and $229 as of December 31, 2019 and








December 31, 2018, respectively

9,518



7,587




Prepaid expenses and other current assets

1,852



1,779





Total current assets

66,225



50,480



Property and equipment, net

35,323



24,683



Operating lease right-of-use assets, net

9,460





Intangible assets, net

894



1,294



Goodwill

18,715



18,301



Other assets

2,759



2,576



Total assets

$

133,376



$

97,334










Liabilities and stockholders' equity





Current liabilities:






Accounts payable

$

1,363



$

820




Partners payable

886



541




Operating lease liabilities, current

800






Accrued expenses and other current liabilities

11,735



5,509




Deferred revenue and deposits

269



147





Total current liabilities

15,053



7,017



Operating lease liabilities, non-current

9,524





Other liabilities

7,745



6,190





Total liabilities

32,322



13,207



Commitments and contingencies





Stockholders' equity:






Common stock and additional paid-in capital

45,851



42,906




Accumulated other comprehensive loss

(489)



(760)




Retained earnings

55,692



41,981





Total stockholders' equity

101,054



84,127



Total liabilities and stockholders' equity

$

133,376



$

97,334



 

FACEBOOK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


Three Months Ended
December 31,


Twelve Months Ended
December 31,


2019


2018


2019


2018

Cash flows from operating activities








Net income

$

7,349



$

6,882



$

18,485



$

22,112


Adjustments to reconcile net income to net cash provided by operating activities:








   Depreciation and amortization

1,468



1,225



5,741



4,315


   Share-based compensation

1,273



971



4,836



4,152


   Deferred income taxes

(395)



201



(37)



286


   Other

(6)



(19)



39



(64)


Changes in assets and liabilities:








   Accounts receivable

(1,697)



(1,564)



(1,961)



(1,892)


   Prepaid expenses and other current assets

577



198



47



(690)


   Other assets

(26)



(60)



41



(159)


   Accounts payable

112



133



113



221


   Partners payable

289



41



348



157


   Accrued expenses and other current liabilities

861



378



7,300



1,417


   Deferred revenue and deposits

41



33



123



53


   Other liabilities

(763)



(735)



1,239



(634)


Net cash provided by operating activities

9,083



7,684



36,314



29,274


Cash flows from investing activities








Purchases of property and equipment, net

(4,100)



(4,366)



(15,102)



(13,915)


Purchases of marketable securities

(4,758)



(1,997)



(23,910)



(14,656)


Sales of marketable securities

2,163



1,254



9,565



12,358


Maturities of marketable securities

3,104



1,381



10,152



4,772


Acquisitions of businesses, net of cash acquired, and purchases of intangible












assets

(445)





(508)



(137)


Other investing activities, net



(21)



(61)



(25)


Net cash used in investing activities

(4,036)



(3,749)



(19,864)



(11,603)


Cash flows from financing activities








Taxes paid related to net share settlement of equity awards

(627)



(545)



(2,337)



(3,208)


Repurchases of Class A common stock

(1,296)



(3,500)



(4,202)



(12,879)


Principal payments on finance leases

(141)





(552)




Net change in overdraft in cash pooling entities

37



500



(223)



500


Other financing activities, net

2



4



15



15


Net cash used in financing activities

(2,025)



(3,541)



(7,299)



(15,572)


Effect of exchange rate changes on cash, cash equivalents, and restricted cash

177



(14)



4



(179)


Net increase in cash, cash equivalents, and restricted cash

3,199



380



9,155



1,920


Cash, cash equivalents, and restricted cash at beginning of the period

16,080



9,744



10,124



8,204


Cash, cash equivalents, and restricted cash at end of the period

$

19,279



$

10,124



$

19,279



$

10,124










Reconciliation of cash, cash equivalents, and restricted cash to the condensed








consolidated balance sheets








Cash and cash equivalents

$

19,079



$

10,019



$

19,079



$

10,019


Restricted cash, included in prepaid expenses and other current assets

8



10



8



10


Restricted cash, included in other assets

192



95



192



95


Total cash, cash equivalents, and restricted cash

$

19,279



$

10,124



$

19,279



$

10,124


 

FACEBOOK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


Three Months Ended
December 31,


Twelve Months Ended
December 31,


2019


2018


2019


2018

Supplemental cash flow data








Cash paid for income taxes, net

$

2,654



$

1,034



$

5,182



$

3,762


Non-cash investing activities:








Net change in prepaids and liabilities related to property and equipment

$

(94)



$

306



$

(153)



$

918


Property and equipment in accounts payable and accrued liabilities

$

1,887



$

1,955



$

1,887



$

1,955


 

Reconciliation of GAAP to Non-GAAP Results


(In millions, except percentages)


(Unaudited)



Three Months Ended
December 31,


Twelve Months Ended
December 31,



2019


2018


2019


2018


GAAP revenue

$

21,082



$

16,914



$

70,697



$

55,838



Foreign exchange effect on 2019 revenue using 2018 rates

295





1,669





Revenue excluding foreign exchange effect

$

21,377





$

72,366





GAAP revenue year-over-year change %

25

%




27

%




Revenue excluding foreign exchange effect year-over-year change %

26

%




30

%




GAAP advertising revenue

$

20,736



$

16,640



$

69,655



$

55,013



Foreign exchange effect on 2019 advertising revenue using 2018 rates

294





1,664





Advertising revenue excluding foreign exchange effect

$

21,030





$

71,319





GAAP advertising revenue year-over-year change %

25

%




27

%




Advertising revenue excluding foreign exchange effect year-over-year











change %

26

%




30

%













Net cash provided by operating activities

$

9,083



$

7,684



$

36,314



$

29,274



Purchases of property and equipment, net

(4,100)



(4,366)



(15,102)



(13,915)



Principal payments on finance leases

(141)





(552)





Free cash flow

$

4,842



$

3,318



$

20,660



$

15,359



 

Cision View original content:http://www.prnewswire.com/news-releases/facebook-reports-fourth-quarter-and-full-year-2019-results-300995616.html

SOURCE Facebook