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Facebook Reports Third Quarter 2012 Results

Facebook, Inc. today reported financial results for the third quarter, which ended September 30, 2012.

 

"As proud as I am that a billion people use Facebook each month, I'm also really happy that over 600 million people now share and connect on Facebook every month using mobile devices," said Mark Zuckerberg, Facebook founder and CEO. "People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform. At the same time, we are deeply integrating monetization into our product teams in order to build a stronger, more valuable company."

 

TweakTown image pr/7/6/7643_09_facebook_reports_third_quarter_2012_results.jpg

 

Third Quarter 2012 Operational Highlights

  • Monthly active users (MAUs) were 1.01 billion as of September 30, 2012, an increase of 26% year-over-year
  • Daily active users (DAUs) were 584 million on average for September 2012, an increase of 28% year-over-year
  • Mobile MAUs were 604 million as of September 30, 2012, an increase of 61% year-over-year

 

Recent Business Highlights

 

Product

  • Completely rebuilt Facebook for iOS for faster and more reliable performance
  • Updated Messenger for Android and iOS and made Facebook Camera available in 18 languages
  • Continued to make it easy for mobile developers to build with Facebook

- New Software Development Kits (SDKs) for iOS and Android

- Deep integration into iOS 6.0

  • Launched Facebook Gifts, a way to send gifts to celebrate the special moments millions of people share on Facebook each day

 

Advertising

  • Launched several new advertising products, such as Custom Audiences, Facebook Exchange, Offers, and mobile app install ads
  • Generated 14% of advertising revenue during the third quarter from mobile

 

Corporate

  • Connected 1 billion people since founding the company eight years ago
  • Created Facebook Stories, a new website to share the stories of people using Facebook in extraordinary ways at http://www.facebookstories.com
  • Closed Instagram acquisition
  • Opened first international engineering office in London

 

Third Quarter 2012 Financial Highlights

 

Revenue - Revenue for the third quarter totaled $1.26 billion, an increase of 32%, compared with $954 million in the third quarter of 2011. Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have increased by 38%.

- Revenue from advertising was $1.09 billion, representing 86% of total revenue and a 36% increase from the same quarter last year. Excluding the impact of year-over-year changes in foreign exchange rates, advertising revenue would have increased by 43%.

- Payments and other fees revenue for the third quarter was $176 million, a 13% increase over the same quarter in the prior year and a 9% decline sequentially from the second quarter of 2012.

 

Costs and expenses - Third quarter costs and expenses were $885 million, an increase of 64% from the third quarter of 2011. Excluding share-based compensation and related payroll tax expenses, non-GAAP costs and expenses were $737 million, an increase of 57%.

 

Income from operations - For the third quarter, GAAP income from operations was $377 million, compared to income from operations of $414 million for the third quarter of 2011. Excluding share-based compensation and related payroll tax expenses, non-GAAP income from operations for the third quarter was $525 million, compared to $484 million for the third quarter of 2011.

Operating margin - GAAP operating margin was 30% for the third quarter of 2012, compared to 43% for the third quarter of 2011. Excluding share-based compensation and related payroll tax expenses, non-GAAP operating margin was 42% for the third quarter of 2012, compared to 51% for the third quarter of 2011.

 

Income tax provision - The GAAP income tax provision for the third quarter was $431 million, representing a 116% effective tax rate, driven by share-based compensation expense, a portion of which is not tax-deductible. Excluding share-based compensation expense and related payroll tax expenses, the non-GAAP effective tax rate would have been approximately 40%.

 

Net income (loss) - GAAP income before provision for income taxes was $372 million. After the provision for income taxes, GAAP net loss for the third quarter was $59 million, compared to net income of $227 million for the third quarter of 2011. GAAP EPS for third quarter of 2012 was ($0.02), compared to $0.10 for the same quarter in the prior year. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP net income was $311 million or $0.12 per share, compared to $273 million and $0.12 per share for the same quarter in the prior year.

 

Capital expenditures - Purchases of property and equipment for the quarter were $171 million. Additionally, $161 million of equipment was procured or financed through capital leases during the third quarter of 2012.

 

Cash and marketable securities - As of September 30, 2012, cash and marketable securities were $10.5 billion.

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