Wednesday, August 14, 2019
Facebook Financial Performance Report
Financial Performance 7. 1 Financial Statement FACEBOOK, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except for number of shares and par value) (Unaudited) | | | | | | | | | |   | June 30, 2012|  |  | December 31, 2011|  | Assets|   | | | |  | | | | Current assets:|   | | | |  | | | |Cash and cash equivalents|   | $| 2,098|  |  | $| 1,512|   | Marketable securities|   |  | 8,090|  |  |  | 2,396|   | Accounts receivable, net of allowances for doubtful accounts of $17 as of June 30, 2012 and December 31, 2011|   |  | 578|  |  |  | 547|   | Income tax refundable|   |  | 567|   |  |  | 0|   | Prepaid expenses and other current assets|   |  | 634|  |  |  | 149|   | |   |  |  |  |  |  |  |  |Total current assets|   |  | 11,967|  |  |  | 4,604|   | Property and equipm ent, net|   |  | 2,105|  |  |  | 1,475|   | Goodwill and intangible assets, net|   |  | 809|  |  |  | 162|   | Other assets|   |  | 47|   |  |  | 90|   | |   |  |  |  |  |  |  |  | Total assets|   | $| 14,928|  |  | $| 6,331|   | |   |  |  |  |  |  |  |  | Liabilities and stockholders’ equity|   | | | |  | | | | Current liabilities:|   | | | |  | | | |Accounts payable|   | $| 43|  |  | $| 63|   | Platform partners payable|   |  | 153|   |  |  | 171|   | Accrued expenses and other current liabilities|   |  | 441|  |  |  | 296|   | Deferred revenue and deposits|   |  | 85|  |  |  | 90|   | Current portion of capital lease obligations|   |  | 312|  |  |  | 279|   | |   |  |  |  |  | à ‚ |  |  | Total current liabilities|   |  | 1,034|   |  |  | 899|   | Capital lease obligations, less current portion|   |  | 394|   |  |  | 398|   | Other liabilities|   |  | 191|  |  |  | 135|   | |   |  |  |  |  |  |  |  |Total liabilities|   |  | 1,619|  |  |  | 1,432|   | |   |  |  |  |  |  |  |  | Stockholders’ equity:|   | | | |  | | | | Convertible preferred stock, $0. 000006 par value, issuable in series; no shares and 569 million shares authorized as of June 30, 2012 and December 31, 2011, respectively, no shares and 543 million shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively|   |  | 0|  |  |  | 615|   | Common stock, $0. 00006 par value; 5,000 million and 4,141 million Class A shares authorized as of June 30, 20 12 and December 31, 2011, respectively, 641 million and 117 million shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively, including 1 million outstanding shares subject to repurchase as of June 30, 2012 and December 31, 2011; 4,141 million Class B shares authorized, 1,501 million and 1,213 million shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively, including 2 million outstanding shares subject to repurchase, as of June 30, 2012 and December 31, 2011|   |  | 0|   |  |  | 0|   | Additional paid-in capital|   |  | 11,684|  |  |  | 2,684|   | Accumulated other comprehensive loss|   |  | (29| ) |  |  | (6| ) | Retained earnings|   |  | 1,654|  |  |  | 1,606|   | |   |  |  |  |  |  |  |  | Total stockholders’ equity|   |  | 13,309|  |  |  | 4,899|   | |   |  |  |  |  |  |  |  | Total liabilities and stockholders’ equity|   | $| 14,928|  |  | $| 6,331|   | |   |  |  |  |  |  |  |  | Revenue|   | $| 1,184|  |  | $| 895|  |  | $| 2,242|   |  | | 1,626|   | Costs and expenses:|   | | | |  | | | |  | | | |  | | | | Cost of revenue|   |  | 367|   |  |  | 210|  |  |  | 644|   |  |  | 377|  | Marketing and sales|   |  | 392|   |  |  | 96|  |  |  | 535|   |  |  | 158|  | Research and development|   |  | 705|   |  |  | 99|  |  |  | 858|   |  |  | 156|  | General and administrative|   |  | 463|   |  |  | 83|  |  |  | 567|   |  |  | 140|  | |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total costs and expenses|   |  | 1,927|   |  |  | 488|  |  |  | 2,604|   |  |  | 831|  | |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (Loss) income from operations|   |  | (743| ) |  |  | 407|  |  |  | (362| ) |  |  | 795|  | Interest and other income (expense), net:|   | | | |  | | | |  | | | |  | | | | Interest expense|   |  | (10| ) |  |  | (9| ) |  |  | (24| ) |  |  | (17| ) | Other income (expense), net|   |  | (12| ) |  |  | 1|   |  |  | 3|   |  |  | 19|  | |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (Loss) income before benefit from (provision for) income taxes|   |  | (765| ) |  |  | 399|  |  |  | (383| ) |  |  | 797 |  | Benefit from (provision for) income taxes|   |  | 608|   |  |  | (159| ) |  |  | 431|   |  |  | (326| ) | |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Net (loss) income|   | $| (157| ) |  | $| 240|  |  | $| 48|   |  | $| 471|   | |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Less: Net income attributable to participating securities|   |  | 0|   |  |  | 81|   |  |  | 21|   |  |  | 160|   | |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Net (loss) income attributable to Class A and Class B common stockholders|   | $| (157| ) |  | $| 159|  |  | $| 27|   |  | $| 311|  | |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (Loss) earnings per share attributable to Class A and Class B common stockholders:|   | | | |  | | | |  | | | |  | | | | Basic|   | ($| 0. 08| ) |  | $| 0. 12|   |  | $| 0. 02|   |  | $| 0. 25|   | |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Diluted|   | ($| 0. 08| ) |  | $| 0. 11|   |  | $| 0. 02|   |  | $| 0. 22|   | |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Weighted verage shares used to compute (loss) earnings per share attributable to Class A and Class B common stockholders:|   | | | |  | | | |  | | | |  | | | | Basic|   |  | 1,879|   |  |  | 1,292|   |  |  | 1,613|   |  |  | 1,267|   | |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Dil uted|   |  | 1,879|   |  |  | 1,510|   |  |  | 1,792|   |  |  | 1,499|   | |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Share-based compensation expense included in costs and expenses:|   | | | |  | | | |  | | | |  | | | | Cost of revenue|   | $| 66|   |  | $| 3|   |  | $| 71|   |  | $| 3|   | Marketing and sales|   |  | 232|   |  |  | 11|   |  |  | 251|   |  |  | 11|   | Research and development|   |  | 545|   |  |  | 35|   |  |  | 605|   |  |  | 39|   | General and administrative|   |  | 263|   |  |  | 15|   |  |  | 282|   |  |  | 18|   | |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total share-based compensation ex pense|   | $| 1,106|   |  | $| 64|   |  | $| 1,209|   |  | $| 71|  | | Three Months Ended June 30,|  |   | Six Months Ended June 30,|  |   | 2012|  |  | 2011|  |   | 2012|  |  | 2011|  | Net (loss) income|   | $| (157| ) |  | $| 240|  |   | $| 48|   |  | $|  471|   | Other comprehensive (loss) income:|   | | | |  | | | |   | | | |  | | | | Foreign currency translation adjustment|   |  | (21| ) |  |  | 0|   |   |  | (22| ) |  |  | 1|   | Change in unrealized gain (loss) on available-for-sale investments, net of tax|   |  | (1| ) |  |  | 0|   |   |  | (1| ) |  |  | 0|   | |   |  |  |  |  |  |  |  |   |  |  |  |  |  |  |  | Comprehensive (loss) income|   | $| (179| ) |  | $| 240|   |   | $| 25|   |  | $| 472|   | |   |  |  |  |  |  |  |  |   |  |  |  |  |  |  |  | Figure #: Financial Statement (Sources: United States Securities And Exchange Commission, Form 10-Q, For the quarterly period ended June 30, 2012) Looking at the Financial Statement of Facebook Inc above we can calculate the current ratio on June 30, 2012 and compare it with December 31, 2011's ratio. We can calculate the 2011 ratio by using Total Asset of $6,331 million divided by Total Liabilities of $1,432 million equals $4. 42 million. And we can also find out the current ratio of Facebook Inc on June 30, 2012 by using the Current Assets of $11,976 million divided by Current Liabilities of $1,916 million equals $6. 25 million.Financial StatementsAs we can see the just in six months Facebook Inc's ratio increased almost by 70%. 7. 2 Active Users Figure #: Trends in Facebook User Metrics, Daily Active Users(Sour ces: United States Securities And Exchange Commission, Form 10-Q, For the quarterly period ended June 30, 2012) The graph above showed us how Facebook Inc increased their ratio almost 70% in just six months. As we can see Daily Active Users Worldwide had increased from 108 million to 552 million users. Facebook Inc define a daily active users as a registered Facebook user who logged in and visited Facebook through the Facebook website or through a device that can connect with Facebook.Facebook Inc check DAU (Daily Active Users) everyday. In Figure # we can see that the Worldwide DAUs increased 32% from 417 million users on June 2011 to 552 million users on June 2012. Most of the users now can log into Facebook through mobile device and Facebook Inc has already realized that. March 31, 2012, DAU's increased from 526 million to 552 million because of the increase of mobile users. 7. 3 Competitor The biggest competitor for Facebook is Twitter. The reason is that because many celebritie s like to use Twitter to connect with their fans. Twitter has not only become a well known social network but yet a tool for celebrities to do advertisement.In the United States presidential election of 2012, President Barack Obama used Twitter to connect with his fans. Figure #: Twitter Total Active Users, Worldwide (Source: Business Wired 2012) Even though Twitter is one of the threats for Facebook, but from the figure # we can clearly see the big difference that the two company have. On March 31, 2012 Facebook has 526 million active users worldwide, and Twitter only has 200 million active users worldwide. Facebook clearly beat Twitter. 7. 4 Facebook's Stock Markets Even though Facebook beat Twitter in the social network markets, but it has clearly not beat anyone in the stock markets. Below is the graph for Facebook's stock markets.Figure #: Facebook Stock Market graph, June 2011-December 2012 (Sources: United States Securities And Exchange Commission, Form 10-Q, For the quarterl y period ended June 30, 2012) Facebook opened its stock markets with $31 per stock on May 18, 2011 and on November 16, 2012 it has closed with $23. 56 per stock. Facebook's stock market did not increase as we can see through Facebook. Below is the graph why it has dropped dramatically. Figure #: Facebook's Revenue Makeup, 2012 (Business Insider 2012) As the graph shows that Facebook Inc spent most of their money in Advertising the market instead of using the money to pay off their Payments and Other.Although Facebook will continue to increase their active users due to mobile services, but if users growth flattens or decline, the impact of these increase have on Facebook's revenue growth will be limited for sure. Sources: Financial Statement : http://www. sec. gov/Archives/edgar/data/1326801/000119312512325997/d371464d10q. htm#tx371464_3 Daily Active Users: http://www. sec. gov/Archives/edgar/data/1326801/000119312512325997/d371464d10q. htm Twitter Active Users: http://blog. business wire. com/tag/social-media/ Facebook Stock Markets http://tmx. quotemedia. com/charting. php? qm_symbol=FB:US Facebook's Revenue Makeup: http://www. businessinsider. com/facebook-users-decline-2012-8
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