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Q4 2013
Non-GAAP Measures
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 corresponding GAAP measures is provided in the appendix to this presentation.
699 195
728 208
757 216
153
167
181
189
200
169
179
182
188
195
135 Q4'12
Q4'12 59%
139 Q1'13
Q1'13 60%
142 Q2'13
Q2'13 61%
144 Q3'13
Q313 61%
147 Q4'13
Q4'13 62%
Q4'11
DAUs / MAUs
Q4'11 57%
Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.
901 245
955 268
1,007 288
1,056 304
1,110 327
1,155 346
1,189 362
1,228
376
234
255
277
298
319
339
351
368
276
282
199 Q3'13
201 Q4'13
Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.
432
Q4'11
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Mobile-only MAUs are defined as users who accessed Facebook solely through mobile apps or our mobile website in the last 30 days of the given quarter. The number of mobile-only MAUs do not include Instagram users unless they would otherwise qualify as such users based on their other activities on Facebook.
Revenue
In Millions
Payments and other fees Advertising
$218
$256 *
$1,131 $188
$1,058 $186
$943
$872
$992
$1,086
$1,245
Q4'11
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
*In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of our Form 10-K filed on February 1, 2013.
$2,585 $311 $2,016 $1,813 $1,585 $167 $1,262 $130 $154 $341 $198 $440 $213 $1,458 $159 $197 $423 $962 $1,206 $247 $505 $538 $238 $278 $727 $341
$567 Q4'11
$525 Q1'12
$590 Q2'12
$637
$780
$679
$848
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenuegenerating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer.
$2,344 $300 $1,798 $1,599 $1,329 $202 $1,245 $150 $176 $367 $721 $832 $1,068 $225 $451 $482 $229 $255 $658 $318
$538 Q3'12
$631
$552 Q1'13
Q4'12
Q2'13
Q3'13
Q4'13
Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenuegenerating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer.
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$256 $11 $30 $186 $8 $19 $54 $192 $9 $20 $52 $176 $10 $21 $46 $149 $66
$105
$106
$111
$99
$127
$127
$130
$138
Q4'11
Q1'12
Q2'12
Q3'12
* Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer. *In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of our Form 10-K filed on February 1, 2013.
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US & Canada
$4.85 $0.65
$6.03 $0.69
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Europe
$1.87 $1.60 $0.21 $0.20 $1.96 $0.20
$2.61 $0.25
Asia
$0.81 $0.07 $0.95 $0.06
Rest of World
$0.63 $0.03 $0.67 $0.03
$0.84 $0.03
$1.71 $0.26
$0.64 $0.07
$0.75 $0.07
$0.50 $0.03
$1.46
$1.38
$1.67
$1.76
$0.58
$0.57
$0.68
$0.74
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer. Please see Facebooks most recent quarterly or annual report filed with the SEC for the definition of ARPU. *In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of our Form 10-K filed on February 1, 2013.
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$1,106
$986
$273 $179 $28 $113 Q2'12 $138 Q3'12 $184 $24 $137 Q4'12 $170 $9 $135 Q1'13 $224 $17 $175 $239 $14 $193 $11 $228
Q2'13
Q3'13
Q4'13
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Expenses as a % of Revenue
Share-based compensation + Payroll tax related to share-based compensation All other expenses
Cost of Revenue
25% 28% 26% 25% 19% 24% 28% 25% 25%
16% 7% 9% Q4'13
19%
10% Q4'12
11% Q1'13
10% Q2'13
10% Q3'13
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
10% 8% Q2'13
8% 7% Q3'13
10% 6% Q4'13
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$548
$381
$377
$523
$373
$562
$736
Q4'11
Q1'12
($743)
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Non-GAAP Income from Operations (in millions) $1,459 $624 $515 $525 $736 $563 $794 $987
$485
Q4'11
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Non-GAAP income from operations excludes share-based compensation expense and payroll tax expenses related to share-based compensationsee the Appendix for a reconciliation of this non-GAAP measure to GAAP income (loss) from operations.
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Operating Margin
GAAP Operating Margin 48% 36% 30% 33% 31% 37% 44%
26%
(63%)
Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13
43%
42%
39%
44%
Q4'11
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Non-GAAP operating margin excludes share-based compensation expense and payroll tax expenses related to share-based compensationsee the Appendix for a reconciliation of this non-GAAP measure to GAAP operating margin.
16
Q412 GAAP effective tax rate was influenced by significant share-based compensation expense resulting from our initial public offering, a portion of which is not tax-deductiblesee the Appendix for a reconciliation of this non-GAAP measure to GAAP effective tax rate.
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$302
$64
$219
$333
$425
$523
Q4'11
Q1'12
Q2'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
$360
$287
$295
$311
$426
$312
$488
$621
Q4'11
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Non-GAAP net income excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and related income tax adjustmentssee the Appendix for a reconciliation of this non-GAAP measure to GAAP net income (loss).
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$0.14
$0.09
$0.09
$0.13
$0.17
Q4'11
Q1'12
Q1'13
Q2'13
Q3'13
Q4'13
$0.15
$0.12
$0.12
$0.12
$0.17
$0.19 $0.12
$0.25
Q4'11
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Non-GAAP diluted EPS excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and related income tax adjustmentssee the Appendix for a reconciliation of this non-GAAP measure to GAAP diluted EPS.
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Capital Investments
In Millions
Property and equipment acquired under capital leases Purchases of property and equipment
2011
2012 Annual
2013
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Appendix
Reconciliations
Income (Loss) from Operations (in millions) GAAP income (loss) from operations Share-based compensation expense Payroll tax expenses related to share-based compensation Non-GAAP income from operations $ Q4'11 548 76 $ 624 $ Q1'12 381 103 1 $ 485 $ Q2'12 (743) 1,106 152 $ 515 $ Q3'12 377 179 (31) $ 525 $ Q4'12 523 184 29 $ 736 $ Q1'13 373 170 20 $ 563 $ Q2'13 562 224 8 $ 794 $ Q3'13 736 239 12 $ 987 Q4'13 $ 1,133 273 53 $ 1,459 FY2012 $ 538 1,572 151 $ 2,261 FY2013 $ 2,804 906 93 $ 3,803
Operating Margin GAAP operating margin Share-based compensation expense Payroll tax expenses related to share-based compensation Non-GAAP operating margin
Net Income (Loss) (in millions) GAAP net income (loss) Share-based compensation expense Payroll tax expenses related to share-based compensation Income tax adjustments Non-GAAP net income
Diluted Earnings (Loss) Per Share GAAP diluted earnings (loss) per share Net income attributable to participating securities Non-GAAP adjustments to net income (loss) Non-GAAP adjustments to diluted shares Non-GAAP diluted earnings per share
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Reconciliations (continued)
Effective Tax Rate (in millions) GAAP income before provision for income taxes GAAP provision for income taxes GAAP effective tax rate GAAP income before provision for income taxes Share-based compensation and related payroll tax expenses Non-GAAP income before provision for income taxes Non-GAAP provision for income taxes Non-GAAP effective tax rate $ Q4'12 505 441 87% 505 213 718 292 41% $ Q1'13 353 134 38% 353 190 543 231 43% $ Q2'13 545 212 39% 545 232 777 289 37% $ Q3'13 726 301 41% 726 251 977 356 36% Q4'13 $ 1,130 607 54% $ 1,130 326 $ 1,456 676 46% FY2012 $ 494 441 89% 494 1,723 $ 2,217 900 41% $ FY2013 $ 2,754 1,254 46% $ 2,754 999 $ 3,753 1,551 41%
$ $
$ $
$ $
$ $
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Reconciliations (continued)
Free Cash Flow (in millions) Net cash provided by operating activities Purchases of property and equipment Property and equpiment acquired under capital leases Free Cash Flow Q4'11 510 185 80 $ 245 $ Q1'12 441 453 38 $ (50) $ Q2'12 240 413 52 $ (225) $ Q3'12 250 171 161 $ (82) $ Q4'12 681 198 89 $ 394 $ Q1'13 719 327 11 $ 381 $ Q2'13 $ 1,322 268 $ 1,054 Q3'13 950 284 $ 666 $ Q4'13 $ 1,231 483 $ 748 FY2012 $ 1,612 1,235 340 $ 37 FY2013 $ 4,222 1,362 11 $ 2,849
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