Facebook 2nd quarter earnings slides
30 likes16,752 views
- Facebook reported Q2 2015 results with revenue of $4.04 billion, up 11% year-over-year. - Monthly active users (MAUs) increased 14% year-over-year to 1.49 billion. - Mobile MAUs increased 22% year-over-year and represented 87% of total MAUs.
Facebook 2nd quarter earnings slides
- 1. Facebook Q2 2015 Results investor.fb.com
- 2. In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation of non-GAAP financial measures to the correspondingGAAP measures is provided in the appendixto this presentation. 2 Non-GAAP Measures
- 3. 142 144 147 150 152 155 157 161 164 182 188 195 203 206 212 217 225 228 181 189 200 216 228 242 253 270 285 195 208 216 233 244 256 263 280 292 699 728 757 802 829 864 890 936 968 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Daily Active Users (DAUs) DAUs / MAUs Q2'13 Q3’13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2’15 61% 61% 62% 63% 63% 64% 64% 65% 65% Please see Facebook's most recent quarterly or annual report filed with the SEC fordefinitionsof user activity used to determinethe number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobileDAUs, MAUs, and mobile MAUsdo not includeInstagram or WhatsApp users unless they would otherwise qualify assuch users, respectively, based on their other activitieson Facebook. In Millions Rest of World Asia-Pacific Europe US & Canada 3
- 4. 469 507 556 609 654 703 745 798 844 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Mobile Daily Active Users (Mobile DAUs) In Millions 4 Please see Facebook's most recent quarterly or annual report filed with the SEC for definitionsof user activity used to dete rminethe number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobileDAUs, MAUs, and mobile MAUsdo not includeInstagram or WhatsApp users unless they would otherwise qualify assuch users, respectively, based on their other activitieson Facebook.
- 5. 198 199 201 202 204 206 208 210 213 272 276 282 289 292 296 301 307 311 339 351 368 390 410 426 449 471 496 346 362 376 395 411 423 436 453 4711,155 1,189 1,228 1,276 1,317 1,350 1,393 1,441 1,490 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Monthly Active Users (MAUs) In Millions Rest of World Asia-Pacific Europe US & Canada 5 Please see Facebook's most recent quarterly or annual report filed with the SEC for definitionsof user activity used to dete rminethe number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobileDAUs, MAUs, and mobile MAUsdo not include Instagram or WhatsApp users unless they would otherwise qualify assuch users, respectively, based on their other activitieson Facebook.
- 6. 819 874 945 1,008 1,070 1,124 1,189 1,248 1,314 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Mobile Monthly Active Users (Mobile MAUs) In Millions 6 Please see Facebook's most recent quarterly or annual report filed with the SEC for definitionsof user activity used to dete rminethe number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobileDAUs, MAUs, and mobile MAUsdo not includeInstagram or WhatsApp users unless they would otherwise qualify assuch users, respectively, based on their other activitieson Facebook.
- 7. 219 254 296 341 399 456 526 581 655 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Mobile-Only Monthly Active Users (Mobile-Only MAUs) In Millions 7 Mobile-only MAUsare defined asusers who accessed Facebooksolely through mobile appsor mobileversionsof our website, or use d our Messenger app (and is also a registered Facebookuser) during the periodof measurement. The number of mobile-only MAUsdo not include Instagram or WhatsApp users unless they would otherwise qualify assuch users based on their other activitieson Facebook.
- 8. $1,599 $1,798 $2,344 $2,265 $2,676 $2,957 $3,594 $3,317 $3,827 $214 $218 $241 $237 $234 $246 $257 $226 $215 $1,813 $2,016 $2,585 $2,502 $2,910 $3,203 $3,851 $3,543 $4,042 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Revenue In Millions Payments and Other Fees Advertising 8
- 9. $848 $962 $1,206 $1,179 $1,308 $1,514 $1,864 $1,739 $1,967 $505 $538 $727 $698 $824 $844 $1,030 $908 $1,037 $247 $278 $341 $354 $431 $492 $554 $542 $623 $213 $238 $311 $271 $347 $353 $403 $354 $415 $1,813 $2,016 $2,585 $2,502 $2,910 $3,203 $3,851 $3,543 $4,042 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Revenue by User Geography In Millions Revenue by user geography isgeographically apportionedbased on our estimation of the geographic location of our users when they perform a revenue- generating activity. Thisallocation differsfrom our revenue by geography disclosure in our condensed consolidated financial statementswhere revenue is geographically apportioned based on the location of the marketer or developer. Rest of World Asia-Pacific Europe US & Canada 9
- 10. $721 $832 $1,068 $1,039 $1,175 $1,362 $1,709 $1,592 $1,826$451 $482 $658 $631 $757 $783 $960 $855 $987 $225 $255 $318 $333 $408 $469 $531 $524 $605 $202 $229 $300 $262 $336 $343 $394 $346 $409 $1,599 $1,798 $2,344 $2,265 $2,676 $2,957 $3,594 $3,317 $3,827 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Advertising Revenue by User Geography In Millions Revenue by user geography isgeographically apportionedbased on our estimation of the geographic location of our users when they perform a revenue- generating activity. Thisallocation differsfrom our revenue by geography disclosure in our condensed consolidated financial statementswhere revenue is geographically apportioned based on the location of the marketer or developer. Rest of World Asia-Pacific Europe US & Canada 10
- 11. $127 $130 $138 $140 $133 $152 $155 $147 $141 $54 $56 $69 $67 $67 $61 $70 $53 $50 $22 $23 $23 $21 $23 $23 $23 $18 $18 $11 $9 $11 $9 $11 $10 $9 $8 $6 $214 $218 $241 $237 $234 $246 $257 $226 $215 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Payments & Other Fees Revenue by User Geography In Millions Rest of World Asia-Pacific Europe US & Canada 11 Revenue by user geography isgeographically apportionedbased on our estimation of the geographic location of our users when they perform a revenue- generating activity. Thisallocation differsfrom our revenue by geography disclosure in our condensed consolidated financial statementswhere revenue is geographically apportioned based on the location of the marketer or developer.
- 12. 12 $2.61 $2.66 $3.22 $2.81 $3.19 $0.23 $0.21 $0.23 $0.17 $0.16 $2.84 $2.87 $3.45 $2.99 $3.36 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Europe $1.02 $1.12 $1.21 $1.14 $1.25 $0.06 $0.06 $0.05 $0.04 $0.04 $1.08 $1.18 $1.27 $1.18 $1.29 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Asia-Pacific $0.83 $0.82 $0.92 $0.78 $0.89 $0.03 $0.02 $0.02 $0.02 $0.01 $0.86 $0.85 $0.94 $0.80 $0.90 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Rest of World $2.06 $2.22 $2.62 $2.34 $2.61 $0.18 $0.18 $0.19 $0.16 $0.15 $2.24 $2.40 $2.81 $2.50 $2.76 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Worldwide $5.79 $6.64 $8.26 $7.62 $8.63 $0.66 $0.74 $0.75 $0.70 $0.67 $6.44 $7.39 $9.00 $8.32 $9.30 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 US & Canada Average Revenue per User (ARPU) Revenue by user geography isgeographically apportionedbased on our estimation of the geographic location of our users when they perform a revenue-generating activity. Thisallocation differsfrom our revenue by geography disclosure in our condensed consolidated financial statementswhere revenue isgeographically apportionedbased on the location of the marketer or developer. Please see Facebook’s most recent q uarterly or annual report filed with the SEC for the definition of ARPU. Payments and Other Fees Advertising 12
- 13. 5% 6% 6% 6% 6% 1% 1% 2% 1% 1% 7% 8% 9% 8% 8% Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 General & Administrative 10% 10% 11% 12% 11% 3% 2% 2% 3% 3% 3%12% 12% 16% 17% 15% Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Marketing & Sales 9% 11% 11% 13% 14% 8% 8% 18% 16% 15%17% 19% 29% 30% 29% Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Research & Development 15% 16% 15% 17% 15% 16% 18% 17% 18% 17% Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Cost of Revenue Expenses as a % of Revenue Amortization of intangibles Share-based compensation+ payroll tax expenses related to share-basedcompensation All other expenses 13
- 14. $562 $736 $1,133 $1,075 $1,390 $1,397 $1,133 $933 $1,273 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 GAAP Income from Operations $830 $1,024 $1,498 $1,415 $1,753 $1,820 $2,219 $1,840 $2,228 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Non-GAAP Income from Operations 14 Income from Operations Non-GAAP income from operationsexcludesshare-based compensationexpense, payroll tax expensesrelated to share-based compensation,and amortization of intangibles—see the Appendix for a reconciliationof thisnon-GAAP measure to GAAP income from operations. In Millions
- 15. 46% 51% 58% 57% 60% 57% 58% 52% 55% Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Non-GAAP Operating Margin 31% 37% 44% 43% 48% 44% 29% 26% 31% Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 GAAP Operating Margin Operating Margin Non-GAAP operating margin excludesshare-based compensation expense, payroll tax expensesrelated to share-based compensation, and amortization of intangibles— see the Appendix for a reconciliation of thisnon-GAAP measure to GAAP operating margin. 15
- 16. GAAP Effective Tax Rate Non-GAAP Effective Tax Rate Effective Tax Rate 16 Non-GAAP effective tax rate excludesshare-based compensation expense, payroll tax expensesrelated to share-based compensation, amortization of intangibles, and relatedincometax adjustments. See the Appendix A for a reconciliation of thisnon-GAAPmeasure to GAAP effective tax rate. ($ in millions) Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 GAAP income before provision for income taxes 545$ 726$ 1,130$ 1,075$ 1,386$ 1,336$ 1,114$ 932$ 1,273$ GAAP provision for income taxes 212 301 607 433 595 530 413 420 554 GAAP Effective Tax Rate 39 % 41 % 54 % 40 % 43 % 40 % 37 % 45 % 44 % ($ in millions) Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Non-GAAP income before provision for income taxes 813$ 1,014$ 1,495$ 1,415$ 1,749$ 1,759$ 2,200$ 1,839$ 2,228$ Non-GAAP provision for income taxes 294 348 681 489 627 610 682 650 791 Non-GAAP Effective Tax Rate 36 % 34 % 46 % 35 % 36 % 35 % 31 % 35 % 36 %
- 17. $333 $425 $523 $642 $791 $806 $701 $512 $719 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 $519 $666 $814 $926 $1,122 $1,149 $1,518 $1,189 $1,437 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 GAAP Net Income Non-GAAP Net Income Net Income Non-GAAP net income excludesshare-based compensationexpense, payroll tax expensesrelated to share-based compensation, amortization of intangibles, and relatedincometax adjustments—see the Appendix for a reconciliation of thisnon-GAAP measure to GAAP net income. 17 In Millions
- 18. $0.13 $0.17 $0.20 $0.25 $0.30 $0.30 $0.25 $0.18 $0.25 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 $0.21 $0.27 $0.32 $0.35 $0.43 $0.43 $0.54 $0.42 $0.50 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 GAAP Diluted Earnings Per Share Non-GAAP Diluted Earnings Per Share Diluted Earnings Per Share Non-GAAP dilutedearningsper share excludesshare-based compensation expense, payroll tax expensesrelated to share-based compensation, amortization of intangibles, and related income tax adjustments—see the Appendix for a reconciliation of thisnon-GAAP measure to GAAP diluted earningsper share. 18
- 19. $1,235 $1,362 $1,831 $340 $1,575 $1,373 $1,831 2012 2013 2014 Annual $469 $549 $469 $549 Q2'14 Q2'15 Quarterly Capital Investments In Millions Property and equipment acquired under capital leases Purchases of property and equipment 19
- 20. Appendix
- 21. Reconciliations 21 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 562$ 736$ 1,133$ 1,075$ 1,390$ 1,397$ 1,133$ 933$ 1,273$ Share-based compensation expense 224 239 273 274 314 353 896 703 763 Payroll tax expenses related to share-based compensation 8 12 53 25 8 11 13 25 12 Amortization of intangible assets 36 37 39 41 41 59 177 179 180 830$ 1,024$ 1,498$ 1,415$ 1,753$ 1,820$ 2,219$ 1,840$ 2,228$ Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 31 % 37 % 44 % 43 % 48 % 44 % 29 % 26 % 31 % Share-based compensation expense 12 % 12 % 11 % 11 % 11 % 11 % 23 % 20 % 19 % Payroll tax expenses related to share-based compensation 0 % 1 % 2 % 1 % 0 % 0 % 0 % 1 % 0 % Amortization of intangible assets 2 % 2 % 2 % 2 % 1 % 2 % 5 % 5 % 4 % 46 % 51 % 58 % 57 % 60 % 57 % 58 % 52 % 55 % Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 333$ 425$ 523$ 642$ 791$ 806$ 701$ 512$ 719$ Share-based compensation expense 224 239 273 274 314 353 896 703 763 Payroll tax expenses related to share-based compensation 8 12 53 25 8 11 13 25 12 Amortization of intangible assets 36 37 39 41 41 59 177 179 180 Income tax adjustments (82) (47) (74) (56) (32) (80) (269) (230) (237) 519$ 666$ 814$ 926$ 1,122$ 1,149$ 1,518$ 1,189$ 1,437$ Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 0.13$ 0.17$ 0.20$ 0.25$ 0.30$ 0.30$ 0.25$ 0.18$ 0.25$ Non-GAAP adjustments to net income 0.08 0.10 0.12 0.10 0.13 0.13 0.29 0.24 0.25 0.21$ 0.27$ 0.32$ 0.35$ 0.43$ 0.43$ 0.54$ 0.42$ 0.50$ GAAP diluted earnings per share Non-GAAP diluted earnings per share Non-GAAP operating margin Net Income ($ in millions) GAAP net income Non-GAAP net income Diluted Earnings Per Share Income from Operations ($ in millions) GAAP income from operations Non-GAAP income from operations Operating Margin GAAP operating margin
- 22. Reconciliations (continued) 22 GAAP Tax ($ in millions) Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 GAAP income before provision for income taxes 545$ 726$ 1,130$ 1,075$ 1,386$ 1,336$ 1,114$ 932$ 1,273$ GAAP provision for income taxes 212 301 607 433 595 530 413 420 554 GAAP Effective Tax Rate 39 % 41 % 54 % 40 % 43 % 40 % 37 % 45 % 44 % Non-GAAP Tax ($ in millions) Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 GAAP income before provision for income taxes 545$ 726$ 1,130$ 1,075$ 1,386$ 1,336$ 1,114$ 932$ 1,273$ Share-based compensation and related payroll tax expenses 232 251 326 299 322 364 909 728 775 Amortization of intangible assets 36 37 39 41 41 59 177 179 180 Non-GAAP income before provision for income taxes 813$ 1,014$ 1,495$ 1,415$ 1,749$ 1,759$ 2,200$ 1,839$ 2,228$ Non-GAAP provision for income taxes 294 348 681 489 627 610 682 650 791 Non-GAAP effective tax rate 36 % 34 % 46 % 35 % 36 % 35 % 31 % 35 % 36 %
- 23. Reconciliations (continued) 23 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 1,322$ 950$ 1,231$ 1,285$ 1,341$ 1,248$ 1,583$ 1,700$ 1,880$ Purchases of property and equipment 268 284 483 363 469 482 517 502 549 Property and equipment acquired under capital leases — — — — — — — — — 1,054$ 666$ 748$ 922$ 872$ 766$ 1,066$ 1,198$ 1,331$ Free Cash Flow ($ in millions) Net cash provided by operating activities Free Cash Flow
- 24. The numbers for our key metrics, which include our daily active users (DAUs), mobile DAUs, monthly active users (MAUs), mobile MAUs, and average revenue per user (ARPU), as well as certain other metrics such as mobile-only DAUs and mobile-only MAUs, are calculated using internal company data based on the activity of user accounts. While these numbers are basedon what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring usage of our products across large online and mobile populations around the world. For example, there may be individuals who maintain one or more Facebook accounts in violation of our terms of service. We estimate, for example, that "duplicate" accounts (an account that a user maintains in addition tohis or her principal account) may have represented less than 5% of our worldwide MAUs in 2014. We also seek to identify "false" accounts, whichwe divide into two categories: (1) user-misclassified accounts, where users have created personal profiles for a business, organization, or non-human entity such as a pet (such entities are permitted on Facebook using a Page rather than a personal profile under our terms of service); and (2) undesirable accounts, which represent user profiles that we determine are intended to be used for purposes that violate our terms of service, such as spamming. In 2014, for example, we estimateuser-misclassified and undesirable accounts may have represented less than 2% of our worldwide MAUs. Webelieve the percentage of accounts that are duplicate or false is meaningfully lower in developed markets such as the United States or UnitedKingdom and higher in developing markets such as India and Turkey. However, these estimates are based on an internal review of a limited sample of accounts and we apply significant judgment in makingthis determination, suchas identifying names that appear to be fake or other behavior that appears inauthentic to the reviewers. As such, our estimation of duplicate or false accounts may not accurately represent theactual number of such accounts. We are continually seeking to improve our ability to identify duplicateor false accounts and estimate the total number of such accounts, and such estimates may change due to improvements or changes in our methodology. 24 Limitations of Key Metrics and Other Data 24
- 25. 25 Limitations of Key Metrics and Other Data (continued) Our data limitations may affect our understandingof certain details of our business. For example, while user-provided data indicates a decline in usage among younger users, this age data is unreliable because a disproportionate number of our younger users register with an inaccurate age. Accordingly, our understanding of usage by age group may not be complete. Some of our metrics have also been affected by applications on certain mobile devices that automatically contact our servers for regular updates with no user action involved, and this activity can cause our system to count theuser associated withsuch a device as an active user on the day such contact occurs. The impact of this automatic activity on our metrics varies by geography because mobile usage varies in different regions of the world. In addition, our data regarding the geographic location of our users is estimated based on a number of factors, such as the user's IP address and self- disclosed location. These factors may not always accurately reflect the user's actual location. For example, a mobile-only user may appear to be accessing Facebook from the location of the proxy server that the user connects to rather than from the user's actual location. The methodologies used to measure user metrics may also be susceptible to algorithm or other technical errors. Our estimates for revenue by user location and revenue by user device are also affected by these factors. We regularly review our processes for calculating these metrics, and from time to time we may discover inaccuracies in our metrics or make adjustments to improve their accuracy, including adjustments that may result in the recalculation of our historical metrics. We believe that any such inaccuracies or adjustments are immaterial unless otherwise stated. In addition, our DAU and MAU estimates will differ from estimates published by third parties due to differences in methodology. For example, some third parties are not ableto accurately measure mobile users or do not count mobile users for certain user groups or at all in their analyses. The numbers of DAUs, mobile DAUs, MAUs, mobile MAUs, and mobile-only MAUs discussed in this presentation, as well as ARPU, do not include users of Instagram or WhatsApp unless they wouldotherwise qualify as such users, respectively, based on their other activities on Facebook. 25
- 26. Facebook Q2 2015 Results investor.fb.com