fb q213 investor deck

7/27/2019 FB Q213 Investor Deck

1/26

Quarterly Earnings SlidesQ2 2013


2/26


3/26

117 124 126 129 130 132 135 139 142

127 135 143152 154 160 169

179 182

8598 105

119 129141

153167 181

87100

109126 139

152161

180195

417457 483

526552

584618

665 699

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

3

Daily Active Users (DAUs)

DAUs / MAUs

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

56% 57% 57% 58% 58% 58% 59% 60% 61%

Rest of World

Asia

Europe

US & Canada

Please see Facebook's most recent Form 10-Q filed with the SEC for definitions of user activity used to determine the number of our DAUs, MAUs, and mobileMAUs. The number of DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based ontheir other activities on Facebook.

In Millions


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169 176 179 183 186 189 193 195 198

212 221 229 239246 253 261 269 272

174 196212 234 255 277

298 319339183

207225

245268

288304 327 346

739800

845901

9551,007

1,0561,110

1,155

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

4

Monthly Active Users (MAUs)

In MillionsRest of World

Asia

Europe

US & Canada

Please see Facebook's most recent Form 10-Q filed with the SEC for definitions of user activity used to determine the number of our DAUs, MAUs, and mobileMAUs. The number of DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based ontheir other activities on Facebook.


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Mobile-Only Monthly Active Users (Mobile-Only MAUs)

In Millions

102

126

157

189

219

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Mobile-only MAUs are defined as users who accessed Facebook solely through mobile apps or our mobile website during a given month. The number ofmobile-only MAUs do not include Instagram users unless they would otherwise qualify as such users based on their other activities on Facebook.


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$776 $798$943 $872

$992$1,086

$1,329$1,245

$1,599$119 $156

$188$186

$192$176

$256 $213

$214

$895$954

$1,131$1,058

$1,184$1,262

$1,585

$1,458

$1,813

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Payments and other fees

Advertising

Revenue

In Millions

8

*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 ourForm 10-K filed on February 1, 2013.

*


9/26

$471 $482 $567 $525$590 $637

$780$679

$848

$275 $290

$361$328

$346$341

$440

$423

$505

$82 $104

$115$118

$135$154

$198

$197

$247

$65

$78

$87$87

$113$130

$167

$159

$213

$895$954

$1,131$1,058

$1,184$1,262

$1,585

$1,458

$1,813

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Rest of World

Asia

Europe

US & Canada

9

Revenue by User Geography

Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform arevenue-generating activity. This allocation differs from our revenue by geography disclosure in our condensed consolidated financialstatements where revenue is geographically apportioned based on the location of the marketer or developer.

In Millions


10/26

Rest of World

Asia

Europe

US & Canada

10

Advertising Revenue by User Geography


$394 $395$462

$419$479 $538

$631$552

$721

$245 $245

$306$274

$294 $295

$374$367

$451

$74 $88

$95$99

$115$133

$168$176

$225

$61 $71

$79$79

$104$120

$156

$150

$202

$776 $798

$943$872

$992$1,086

$1,329$1,245

$1,599

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

In Millions


11/26

Rest of World

Asia

Europe

US & Canada

$77 $87$105 $106 $111 $99

$149$127 $127

$30$45

$55 $54 $52

$46

$66

$56 $54

$8

$16

$20 $19 $20

$21

$30

$21 $22

$4

$7

$8 $8 $9$10

$11

$9 $11

$119

$156

$188$186 $192

$176

$256

$213 $214

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

11

Payments & Other Revenue by User Geography


*In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47and 48 of our Form 10-K filed on February 1, 2013.

In Millions

*


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12

Average Revenue per User (ARPU)

$1.21 $1.18$1.46 $1.38

$1.67

$0.21 $0.18

$0.26$0.21

$0.20

$1.43$1.37

$1.71$1.60

$1.87

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Europe

$0.47 $0.50$0.58 $0.57

$0.68

$0.08 $0.08

$0.10 $0.07

$0.07

$0.55$0.58

$0.69$0.64

$0.75

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Asia

Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they performa revenue-generating activity. This allocation differs from our revenue by geography disclosure in our condensed consolidated financial statements whererevenue is geographically apportioned based on the location of the marketer or developer. Please see Facebooks Form 10-Q for the quarter ended June30, 2013 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 ofour Form 10-K filed on February 1, 2013.

$0.40 $0.43$0.53

$0.48$0.60

$0.03$0.04

$0.04$0.03

$0.03

$0.44$0.47

$0.56

$0.50

$0.63

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Rest of World

$1.07 $1.11$1.29 $1.15 $1.41

$0.21 $0.18

$0.25

$0.20

$0.19$1.28 $1.29

$1.54

$1.35

$1.60

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Worldwide

$2.59 $2.87$3.30 $2.85

$3.67

$0.60$0.53

$0.78

$0.65

$0.65

$3.20$3.40

$4.08

$3.50

$4.32

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

US & Canada

Payments*

Advertising


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Share-Based Compensation Expense

13

$58 $59 $74 $97$113 $138

$137 $135$175

$986

$28 $24 $9$17

$64 $70 $76$103

$1,106

$179 $184 $170

$224

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

In MillionsPre-2011 RSUs

Post-2011 RSUs

Options & Other


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14

Expenses as a % of Revenue

11% 12% 10% 12% 13%

33%

13% 12% 14% 15%

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Marketing & Sales

25% 25% 24%28% 25%

31%

26% 25%28%

26%

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Cost of Revenue

9% 11% 10% 11% 10%

60%

19% 19% 20% 19%

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Research & Development

11% 10% 9% 10% 8%

39%

12% 11% 12% 10%

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

General & Administrative

Share-based compensation + Payroll tax related to share-based compensation All other expenses


15/26

Income (Loss) from Operations

$407 $414$548

$381

($743)

$377$523

$373$562

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

GAAP Income (Loss) from Operations (in millions)

$477 $484$624

$485 $515 $525

$736

$563

$794

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Non-GAAP Income from Operations (in millions)

15

Non-GAAP income (loss) from operations excludes share-based compensation expense, payroll tax expenses related to share-basedcompensation, and related income tax adjustmentssee the Appendix for a reconciliation of this non-GAAP measure to GAAP income (loss)from operations.


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16

Operating Margin

53% 51% 55%46% 43% 42% 46% 39%

44%

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Non-GAAP Operating Margin

45% 43% 48% 36%

(63%)

30% 33% 26% 31%

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

GAAP Operating Margin

Non-GAAP operating margin excludes share-based compensation expense, payroll tax expenses related to share-based compensation, andrelated income tax adjustmentssee the Appendix for a reconciliation of this non-GAAP measure to GAAP operating margin.


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17

Effective Tax Rate

Q212 through Q412 GAAP effective tax rates were influenced by significant share-based compensation expense resulting from our initial publicoffering, a portion of which is not tax-deductiblesee the Appendix for a reconciliation of this non-GAAP measure to GAAP effective tax rate.

GAAP Effective Tax Rate

Non-GAAP Effective Tax Rate

Q2 Q3 Q4 Q1 Q2 FY FY

($ in millions) 2012 2012 2012 2013 2013 2011 2012

Non-GAAP income before provision for income taxes 493 520 718 543 777 1,919 2,217

Non-GAAP provision for income taxes 198 209 292 231 289 755 900

Effective Tax Rate 40% 40% 41% 43% 37% 39% 41%

Q2 Q3 Q4 Q1 Q2 FY FY

($ in millions) 2012 2012 2012 2013 2013 2011 2012

GAAP (loss) income before provision for income taxes (765)$ 372$ 505$ 353 545 1,695 494

GAAP (provision for) benefit from income taxes 608 (431) (441) (134) (212) (695) (441)

Effective Tax Rate 79% 116% 87% 38% 39% 41% 89%


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18

Net Income (Loss)

$240 $227$302

$205

($157)($59)

$64

$219$333

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Non-GAAP net income excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and relatedincome tax adjustmentssee the Appendix for a reconciliation of this non-GAAP measure to GAAP net income.

$285 $273$360

$287 $295 $311$426

$312

$488

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

GAAP Net Income (Loss) (in millions)

Non-GAAP Net Income (in millions)


19/26

19

Diluted EPS

$0.11 $0.10$0.14

$0.09

($0.08)

($0.02)

$0.03

$0.09$0.13

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

$0.12 $0.12$0.15

$0.12 $0.12 $0.12

$0.17

$0.12

$0.19

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

GAAP Diluted EPS

Non-GAAP Diluted EPS

Non-GAAP diluted EPS excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and relatedincome tax adjustmentssee the Appendix for a reconciliation of this non-GAAP measure to GAAP diluted EPS.


20/26

20

Capital Investments

Millions of DollarsProperty and equipment acquired

under capital leases

Purchases of property

and equipment

$293

$606

$1,235

$217

$473

$340

$510

$1,079

$1,575

2010 2011 2012

AnnualQuarterly

$866

$595

$90

$11

$956

$606

1H'12 1H'13


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Appendix


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22

Reconciliations

Income from Operations(in millions) Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

GAAP income (loss) from operations 407$ 414$ 548$ 381$ (743)$ 377$ 523$ 373$ 562$

Share-based compensation expense 64 70 76 103 1,106 179 184 170 224

Payroll tax expenses related to share-based compensation 6 - - 1 152 (31) 29 20 8

Non-GAAP income from operations 477$ 484$ 624$ 485$ 515$ 525$ 736$ 563$ 794$

Operating Margins Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

GAAP operating margin 45% 43% 48% 36% (63%) 30% 33% 26% 31%

Share-based compensation expense 7% 7% 7% 10% 93% 14% 12% 12% 12%

Payroll tax expenses related to share-based compensation 1% 0% 0% 0% 13% (2%) 2% 1% 0%

Non-GAAP operating margin 53% 51% 55% 46% 43% 42% 46% 39% 44%

Net Income (Loss) (in millions) Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13GAAP net income (loss) 240$ 227$ 302$ 205$ (157)$ (59)$ 64$ 219$ 333$

Share-based compensation expense 64 70 76 103 1,106 179 184 170 224

Payroll tax expenses related to share-based compensation 6 - - 1 152 (31) 29 20 8

Income tax adjustments (25) (24) (18) (22) (806) 222 149 (97) (77)

Non-GAAP net income 285$ 273$ 360$ 287$ 295$ 311$ 426$ 312$ 488$

Diluted Earnings (Loss) Per Share Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

GAAP diluted earnings (loss) per share 0.11$ 0.10$ 0.14$ 0.09$ (0.08)$ (0.02)$ 0.03$ 0.09$ 0.13$

Net income attributable to participating securities 0.05 0.05 0.05 0.04 - - - - -

Non-GAAP adjustments to net income (loss) 0.03 0.03 0.04 0.05 0.24 0.15 0.14 0.03 0.06

Non-GAAP adjustments to diluted shares (0.07) (0.06) (0.08) (0.06) (0.04) (0.01) - - -

Non-GAAP diluted earnings per share 0.12$ 0.12$ 0.15$ 0.12$ 0.12$ 0.12$ 0.17$ 0.12$ 0.19$


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Reconciliations (continued)

Effective Tax Rate (in millions) Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 FY2011 FY2012

GAAP (loss) income before tax (765)$ 372$ 505$ 353$ 545$ 1,695$ 494$

GAAP benefit from (provision for) income taxes 608 (431) (441) (134) (212) (695) (441)

GAAP effective tax rate 79% 116% 87% 38% 39% 41% 89%

GAAP benefit from (provision for) income taxes (765)$ 372$ 505$ 353$ 545$ 1,695$ 494$

Share-based compensation and related payroll tax expenses 1,258 148 213 190 232 224 1,723

Non-GAAP income before provision for income taxes 493$ 520$ 718$ 543$ 777$ 1,919$ 2,217$

Non-GAAP provision for income taxes 198 209 292 231 289 755 900

Non-GAAP effective tax rate 40% 40% 41% 43% 37% 39% 41%


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