1 Facebook Reports Fourth Quarter and Full Year 2016 Results MENLO PARK, Calif. – February 1, 2017 – Facebook, Inc. (NASDAQ: FB) today reported financial results for the fourth quarter and full year ended December 31, 2016. "Our mission to connect the world is more important now than ever," said Mark Zuckerberg, Facebook founder and CEO. "Our business did well in 2016, but we have a lot of work ahead to help bring people together." Fourth Quarter and Full Year 2016 Financial Highlights (1) Three Months Ended December 31, Year-over- Year % Change Year Ended December 31, Year-over- Year % Change In millions, except percentages and per share amounts 2016 2015 2016 2015 Revenue: Advertising $ 8,629 $ 5,637 53 % $ 26,885 $ 17,079 57 % Payments and other fees 180 204 (12 )% 753 849 (11 )% Total revenue 8,809 5,841 51 % 27,638 17,928 54 % Total costs and expenses (2) 4,243 3,281 29 % 15,211 11,703 30 % Income from operations (2) $ 4,566 $ 2,560 78 % $ 12,427 $ 6,225 100 % Operating margin (2) 52 % 44 % 45 % 35 % Provision for income taxes (2) $ 965 $ 2,301 Effective tax rate (2) 21 % 18 % Net income (2) $ 3,568 $ 1,562 128 % $ 10,217 $ 3,688 177 % Diluted Earnings per Share (EPS) (2) $ 1.21 $ 0.54 124 % $ 3.49 $ 1.29 171 % (1) The information in the Fourth Quarter and Full Year 2016 Financial Highlights table is presented in accordance with generally accepted accounting principles in the United States (GAAP). For non-GAAP financial information, see the table below titled "Reconciliation of GAAP to Non-GAAP Results." (2) In the fourth quarter of 2016, we elected to early adopt Accounting Standards Update No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09) which, among other items, requires us to record excess tax benefits as a reduction of the provision for income taxes in the income statements, whereas they were previously recognized in equity. We are required to reflect any adoption adjustments as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. As such, certain financial highlights data for the three months and year ended December 31, 2016 included the impact of the ASU 2016-09 adoption. See "Adoption of New Accounting Guidance" below for additional information. Full Year 2016 Operational Highlights • Daily active users (DAUs) – DAUs were 1.23 billion on average for December 2016, an increase of 18% year-over-year. • Mobile DAUs – Mobile DAUs were 1.15 billion on average for December 2016, an increase of 23% year- over-year. • Monthly active users (MAUs) – MAUs were 1.86 billion as of December 31, 2016, an increase of 17% year-over-year. • Mobile MAUs – Mobile MAUs were 1.74 billion as of December 31, 2016, an increase of 21% year-over- year.
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Facebook Reports Fourth Quarter and Full Year 2016 Results · • Capital expenditures – Capital expenditures for the full year 2016 were $4.49 billion. • Cash and cash equivalents
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Facebook Reports Fourth Quarter and Full Year 2016 Results
MENLO PARK, Calif. – February 1, 2017 – Facebook, Inc. (NASDAQ: FB) today reported financial results for
the fourth quarter and full year ended December 31, 2016.
"Our mission to connect the world is more important now than ever," said Mark Zuckerberg, Facebook founder
and CEO. "Our business did well in 2016, but we have a lot of work ahead to help bring people together."
Fourth Quarter and Full Year 2016 Financial Highlights(1)
Three Months Ended
December 31, Year-over-
Year %
Change
Year Ended December 31, Year-over-
Year %
Change In millions, except percentages and per share
(1) We elected to early adopt ASU 2016-09 in the fourth quarter of 2016. The impacts of adoption, such as the recognition of excess tax benefits for awards
that vested or settled in 2016 as a reduction to our provision for income taxes, have been reflected in our net income under net cash provided by
operating activities for the three months and year ended December 31, 2016. Since we adopted the aspects of the cash flow presentation retrospectively,
to conform to the current year presentation, we reclassified $566 million and $1.72 billion of excess tax benefits under financing activities to operating
activities for the fourth quarter and full year 2015, respectively. See "Adoption of New Accounting Guidance" above for additional information.
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Reconciliation of GAAP to Non-GAAP Results
(In millions, except percentages and per share amounts)
(Unaudited)
Three Months Ended
December 31, Year Ended December
31,
2016 2015 2016 2015
GAAP revenue $ 8,809 $ 5,841 $ 27,638 $ 17,928
Foreign exchange effect on 2016 revenue using 2015 rates 36 270
Payroll tax expenses related to share-based compensation — % — % — % — %
Amortization of intangible assets 2 % 3 % 3 % 4 %
Non-GAAP operating margin 64 % 60 % 60 % 56 %
GAAP income before provision for income taxes(1) $ 4,533 $ 2,557 $ 12,518 $ 6,194
GAAP provision for income taxes(1) 965 995 2,301 2,506
GAAP effective tax rate(1) 21 % 39 % 18 % 40 %
GAAP income before provision for income taxes(1) $ 4,533 $ 2,557 $ 12,518 $ 6,194
Share-based compensation and related payroll tax expenses(1) 848 772 3,316 3,046
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Amortization of intangible assets 183 191 751 730
Non-GAAP income before provision for income taxes $ 5,564 $ 3,520 $ 16,585 $ 9,970
Non-GAAP provision for income taxes 1,414 1,255 4,217 3,452
Non-GAAP effective tax rate 25 % 36 % 25 % 35 %
Net cash provided by operating activities(1) $ 4,930 $ 3,393 $ 16,108 $ 10,320
Purchases of property and equipment (1,269 ) (692 ) (4,491 ) (2,523 )
Free cash flow(1) $ 3,661 $ 2,701 $ 11,617 $ 7,797 (1) In the fourth quarter of 2016, we elected to early adopt ASU 2016-09. The impacts of adoption have been reflected in certain results of operations and
cash flows data for the three months and year ended December 31, 2016. In addition, certain cash flows data for the three months and year ended
December 31, 2015 have been adjusted accordingly. See "Adoption of New Accounting Guidance" above for additional information.