Facebook Business Analysis 2014

Revenues and Profitswww.revenuesandprofits.com

Presentation Outline

2

‣ Facebook Revenue Model

‣ Facebook Overall Revenues And Profits Analysis

‣ Facebook Segment Revenues Analysis

‣ Facebook Key Business Metrics Analysis

How Facebook Makes Money? (From Marketers)

3

Reference: http://www.revenuesandprofits.com/how-facebook-makes-money/

Facebook

Social content feed via website and mobile apps

(Marketer ads are placed in the content feed)

$$$

Online Users

Marketers

Facebook Ad Tools

Request for content shared by family, friends, and brands

How Facebook Makes Money? (From Developers)

4

Reference: http://www.revenuesandprofits.com/how-facebook-makes-money/

Facebook

Platform and APIs to build

apps

Online UsersDevelopersFees for using

Facebook Payment

Infrastructure

Web and mobile apps on Facebook

Payments for virtual and

digital goods

Facebook Revenues and Revenue Growth

5

Reve

nues

($ m

illion

s)

0

3500

7000

10500

14000

Reve

nue

Gro

wth

0%

22.5%

45%

67.5%

90%

2010 2011 2012 2013 2014Revenue Growth Revenues

12,466

7,8725,089

3,7111,975

58.4%54.7%

37.1%

87.9%87.9%

37.1%

54.7% 58.4%

Facebook Profit Margins

6

0%

22.5%

45%

67.5%

90%

2010 2011 2012 2013 2014

23.6%19.1%

1.0%

27.0%30.7%40.1%

35.6%

10.6%

47.3%52.3%

82.7%76.2%73.2%76.8%75.1%

Gross Margin Operating Margin Net Margin

Facebook Product Segments Revenue Share

7

0%

25%

50%

75%

100%

2010 2011 2012 2013 2014

7.8%11.3%15.9%15.0%5.4%

92.2%88.7%84.1%85.0%94.6%

Advertising Revenue Payment and Other Fees

Facebook Advertising Revenue - Geographic Segments Share

8

0%

25%

50%

75%

100%

2010 2011 2012 2013 2014

11.6%12.6%10.7%8.1%5.2%

15.1%13.9%12.0%9.9%7.6%

27.2%28.0%28.9%31.8%29.7%

46.0%45.4%48.3%50.2%57.3%

US & Canada Europe Asia Rest Of The World

Facebook Advertising Revenues - Desktop Vs Mobile Devices Share

9

0%

25%

50%

75%

100%

2010 2011 2012 2013 2014

35.4%54.9%

88.6%100.0%100.0%

64.6%45.1%

11.4%

Mobile Ad Revenues Desktop Ad Revenues

Facebook ‘Total’ Monthly Active Users (MAUs) And Daily Active Users (DAUs) Worldwide

10

0

350

700

1050

1400

Q4'10 Q4'11 Q4'12 Q4'13 Q4’14

1,393

1,228

1,056

845

608

890757

618483

327

Daily Active Users Worldwide Monthly Active Users Worldwide

(in millions)

Facebook Monthly Active Users (MAUs) - Geographic Segments Share

11

0%

25%

50%

75%

100%

Q4'10 Q4'11 Q4'12 Q4'13 Q4’14

31.3%30.6%28.8%26.6%21.9%

32.2%30.0%28.2%25.1%22.7%

21.6%23.0%24.7%27.1%30.1%

14.9%16.4%18.3%21.2%25.3%

US & Canada Europe Asia Rest Of The World

Facebook Users Engagement Across Geographies - DAU-To-MAU Ratio

12

0%

10%

20%

30%

40%

50%

60%

70%

80%

Q4'10 Q4'11 Q4'12 Q4'13 Q4’14

US & Canada Europe Asia Rest Of The WorldWorldwide

Facebook Advertising ARPU (Average Revenue Per User) by Geography

13

$0.0

$7.5

$15.0

$22.5

$30.0

2012 2013 2014

$8.7$6.0

$4.5 $3.3$2.5$1.7$4.2

$2.9$2.0

$10.7

$7.2$5.0

$25.9

$16.1

$11.1

US & Canada Europe Asia Rest Of The WorldWorldwide

Facebook ‘Mobile’ Monthly Active Users (MAUs) And Daily Active Users (DAUs) Worldwide

14

0

300

600

900

1200

Q4'10 Q4'11 Q4'12 Q4'13 Q4’14

1,189

945

680

432

245

745

556

374

Mobile Daily Active Users WorldwideMobile Monthly Active Users Worldwide

(in millions)

Facebook Worldwide Monthly Active Users (MAUs) Share By Access Device

15

0%

25%

50%

75%

100%

Q4'11 Q4'12 Q4'13 Q4’14

14.6%23.0%

35.6%48.9%

47.6%

52.9%

49.5%

44.3%

37.8%24.1%

14.9%6.9%

Mobile Only MAUs Dual Access (Mobile and Desktop) MAUsDesktop Only MAUs

Copyright And Disclaimer

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‣ The content in this presentation is available under Creative Commons Attribution-NonCommercial (CC BY-NC) license. The license details are available at https://creativecommons.org/licenses/by-nc/4.0/ .

‣ The presentation is for informational and educational purposes only. You should consult your investment advisors for any advice on buying or selling of stocks of the companies analyzed in the presentation.

‣ The financial analysis provided in the presentation was done using publicly available information in the company filings. While we take utmost care in using the right numbers for our analysis, we provide no warranty of the accuracy of information, text, or graphics contained in the presentation. If you observed any errors in any of the numbers or analysis, please write to us. Our contact details are available over our website.

‣ We expressly disclaim all liability arising out of errors or misuse or misinterpretation of any information provided in this presentation.

Thank You

Revenues and Profitswww.revenuesandprofits.com