

Facebook Q2 2012 Earnings - faramarz
http://investor.fb.com/results.cfm

======
kposehn
> Facebook now has independent ROI data from more than 60 advertising
> campaigns using a variety of third-party methodologies like panels and
> marketing mix models. The results show that 70% of campaigns resulted in a
> return on ad spend of 3x or better, and 49% of campaigns showed a return on
> ad spend of 5x or better.

This has pretty much been my experience in CPA and CPS on FB for 3+ years (in
the 5x bracket most of the time). I'm glad to see this data finally backed up
by Facebook.

------
henryw
It looks like most of the expenses (1.3 billion of 1.93 billion) were from
"$1.3 billion of share-based compensation [RSU's] and related payroll tax
expenses." If it weren't for that, then it doesn't look that bad. P/E is still
in the 60's though.

~~~
tatsuke95
Their Non-GAAP numbers exclude the share based compensation. Taking that into
account, growth appears to be slowing drastically.

Net Income, first half 2011: $531 2012: $582

------
rmckayfleming
For those not wanting to open the PDF, $743 million GAAP loss.

~~~
moondistance
Understanding that number requires some context:

"share-based compensation expense related to pre-2011 restricted stock units
(RSUs) was not recognized in advance of the initial public offering, and as a
result of the initial public offering during the second quarter, the company
recognized $1.3 billion of share-based compensation and related payroll tax
expenses"

and

"Excluding share-based compensation and related payroll tax expenses, non-GAAP
income from operations for the second quarter was $515 million, compared to
$477 million for the second quarter of 2011."

------
chrisacky
This was a really important number. No matter what happened, FB had to at
least come out and match the streets expectations of earnings per share (which
they did). After the ZNGA plummet of 40%~ Facebook took the ripple of about
5-7%.

Since IPO, ZNGA is down 70% <http://i.imgur.com/kiXss.png> (courtesy of henryw
in another thread) and despite having 1.2B "in the bank" I don't see much life
left in them. Not when you come out blaming shortfallings on "UI changes".
Total BS. (Not to mention the backlash Pincus is going to get on taking $200M)

GRPN also down 50% since their IPO. (The only notable increase is LNKD ).

FB need to come out and show that they aren't dependent on ZNGA's earnings
(which they aren't). Facebook's worth is their "market", which we know is
rapidly approaching 1B~, and Zynga's market cap seems to wane based entirely
on their daily active users (DAU) - Take a look at their P/E, it's ridiculous.
Zynga's user base is comprised entirely of casual gamers, built on a platform
which is looking for long term growth and isn't afraid to make UI changes
which they know will damage a company who accounted for 15% of their previous
quarters earnings...

Anyway, this was clearly an important announcement, if I had the money, I
would happily buy FB.

~~~
veyron
"FB had to at least come out and match the streets expectations of earnings
per share (which they did)"

The quarter-to-quarter revenue numbers are suggesting a major slowdown ...

This may all turn out to be a joke if the guidance is good, but that'll have
to wait for the conference call

------
AlexMuir

      Second Quarter 2012 Financial Summary
            In millions, except percentages and per share amounts Q2'12      Q2'11
            Revenue                                               $ 1,184    $  895
            Income (Loss) from Operations
            GAAP                                                  $  (743)   $  407
            Non-GAAP                                              $    515   $  477
            Operating Margin
            GAAP                                                  (63%)      45%
            Non-GAAP                                              43%        53%
            Net Income (Loss)
            GAAP                                                  $  (157)   $  240
            Non-GAAP                                              $    295   $  285
            Diluted Earnings (Loss) per Share (EPS)
            GAAP                                                  $ (0.08)   $ 0.11
            Non-GAAP                                              $   0.12   $ 0.12

Monthly active users (MAUs) were 955 million as of June 30, 2012, an increase
of 29% year-over-year.

Daily active users (DAUs) were 552 million on average for June 2012, an
increase of 32% year-over-year.

Mobile MAUs were 543 million as of June 30, 2012, an increase of 67% year-
over-year.

Stock down c.10% after hours so far. That's after an 8.5% fall already today.

~~~
rhufnagel
How did you get the formatting like that?

Edit: please don't downvote, just asking a question

~~~
AlexMuir
Double-space and then it's ASCII time. And I pasted the results from a wire
service.

~~~
veyron
You don't need to double space -- you need to prepend each line with 4 spaces

    
    
        Like
        This
    

Edit: downvote? really? What was incorrect about the statement?

------
benofsky
RE: The stock being down ~10% in after-hours.

I think there's a real divide between the people who use Facebook, for whom it
is (often) a serious part of their social life and, those who comment on FB in
the media and invest in FB on the public market.

Being 19 Facebook is a critical part of finding out what's going on,
organising events and, keeping in touch with everyone (whether I see them
every day or once a year). I'm not unique in this, it's true for all my
friends and pretty much anyone I meet, of my age, around the (western?) world.

Obviously, the market thinks FB is over-valued; I'm not commenting on whether
it is or isn't. I'm just interested at what the market might value FB at if
the people buying its stock used it as much and in the same way as younger
generations. (As far as I see it, it's like a single private company owning
the whole "phone system" for young people. What would that be valued at?)

~~~
AlexMuir
For me, the valuation of FB is closer to a TV channel with an audience of c.
500m people for 30mins every day of the week. And one which shows ads to
people based on their own interests. What's that worth? I'm not sure.

The comparison with a phone network isn't quite right because I can't see FB
ever being able to charge for service.

But I agree with your point. I think Linkedin is far more likely to be wiped
out than Facebook, but the market thinks different.

~~~
benofsky
I like the TV analogy, it's perhaps more apt. Surely the point of any TV
network is to show ads based on their viewers interests? Just FB is able to be
much more targeted (at the same time they also have to compete with the huge
over-supply of online display-ads, are my eyeballs worth more on facebook.com
vs. joes-blog.com? I don't think so, which is the major issue with their
current monetization strategy (EDIT: and they haven't shown that their
targeting is significantly better than Google Adwords as of yet)).

I am confident though that they will find a way to make FB a seriously viable
business. The list of things I use FB for is just so long, I don't see how
they couldn't find at least one v. profitable workflow to tap into (organising
a night out, checking-in on the night out, posting photos the next day, etc.).

~~~
veyron
There are things like adblock which allow you to fully experience facebook
sans ads.

Yes, there is tivo etc, but you have to pay extra to get out of the ad
experience (and it doesnt always work). TV ads are much more intrusive than FB
ads, and I'd imagine TV-style facebook ads (like some websites that force you
to sit through an ad) most likely will kill the platform.

------
i0exception
Interesting to see that Google's Y/Y revenue growth beats Facebook's for Q2
2012.

(Edit : Google's Y/Y revenue growth was 35% and Facebook's 32%. In contrast,
Google's market cap is about two times that of $FB)

~~~
taligent
And your point is what exactly. That Google is far more diversified with its
income than Facebook. That Google doesn't break out Google+ P/L so we can't do
a direct comparison. That search advertising has different dynamics to social
advertising.

I mean did you also want to compare Facebook with Exxon Mobile or Starbucks ?

~~~
i0exception
Google is a direct competitor to Facebook when it comes to Ads. It doesn't
really matter if the advertising is search based or social. They are vying for
a piece of the same pie.

The really high valuation of Facebook is partly because investors expect it to
grow substantially, at least in the short term. The fact that it's growth is
lower than that of it's direct competitors (who have a much lower P/E) is not
a good sign for the stock in days to come.

~~~
taligent
But again. Google is diversified beyond just advertising whilst Facebook
isn't. It seems illogical to just blindly compare total revenues.

Why not compare Facebook/Google to Apple then since they are also vying for
the same piece of the pie ? Or News Corp ? Or Vogue magazine ? Or Playboy ?

