Facebook Q1 2017 Results investor.fb.com Daily Active Users (DAUs) - PowerPoint PPT Presentation

Facebook Q1 2017 Results investor.fb.com

Daily Active Users (DAUs) In Millions 1,284 Rest of World 1,227 Asia-Pacific 1,179 1,128 Europe 1,090 1,038 US & Canada 408 1,007 388 968 936 377 355 340 319 308 292 280 427 396 368 346 329 309 300 285 270 267 262 256 252 249 240 233 228 225 175 178 180 182 164 167 169 173 161 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 DAUs / MAUs Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 65% 65% 65% 65% 66% 66% 66% 66% 66% Please see Facebook's most recent quarterly and annual reports filed with the SEC for definitions of user activity used to determine the number of our DAUs and MAUs. The numbers for DAUs and MAUs do not include Instagram, WhatsApp, or Oculus users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook. 2

Monthly Active Users (MAUs) In Millions 1,936 Rest of World 1,860 Asia-Pacific 1,788 1,712 Europe 1,654 US & Canada 1,591 632 1,545 606 1,490 1,441 587 556 533 509 492 471 453 716 673 629 592 566 540 522 496 471 354 349 342 338 333 323 315 311 307 229 231 234 217 219 222 226 210 213 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Please see Facebook's most recent quarterly and annual reports filed with the SEC for definitions of user activity used to determine the number of our DAUs and MAUs. The numbers for DAUs and MAUs do not include Instagram, WhatsApp, or Oculus users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook. 3

Revenue In Millions $8,809 Payments and Other Fees $180 Advertising $8,032 $175 $7,011 $195 $6,436 $197 $5,841 $5,382 $204 $181 $4,501 $8,629 $4,042 $202 $7,857 $3,543 $215 $6,816 $226 $6,239 $5,637 $5,201 $4,299 $3,827 $3,317 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 4

Revenue by User Geography In Millions $8,809 Rest of World Asia-Pacific $839 $8,032 Europe $784 US & Canada $1,349 $7,011 $6,436 $692 $1,375 $614 $5,841 $1,154 $5,382 $2,065 $550 $1,025 $473 $1,905 $848 $4,501 $862 $1,605 $4,042 $451 $1,585 $415 $3,543 $1,456 $709 $1,307 $354 $623 $542 $1,085 $1,037 $4,556 $908 $3,968 $3,560 $3,212 $2,987 $2,740 $2,256 $1,967 $1,739 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue- generating activity. This allocation differs from our revenue by geography disclosure in our condensed consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer. We discovered an error in the algorithm we used to attribute our revenue by user geography in late 2015. While this issue did not affect our overall worldwide revenue, it did affect our attribution of revenue to different geographic regions. The fourth quarter of 2015 revenue by user geography for all regions was adjusted to reflect this reclassification. 5

Advertising Revenue by User Geography In Millions $8,629 Rest of World $832 Asia-Pacific $7,857 Europe $776 US & Canada $1,337 $6,816 $6,239 $685 $1,361 $608 $5,637 $1,137 $5,201 $2,025 $544 $1,009 $467 $1,869 $833 $4,299 $849 $1,563 $3,827 $444 $1,545 $409 $3,317 $1,413 $694 $1,270 $346 $605 $524 $1,041 $987 $4,435 $855 $3,851 $3,431 $3,077 $2,847 $2,615 $2,120 $1,826 $1,592 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue- generating activity. This allocation differs from our revenue by geography disclosure in our condensed consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer. We discovered an error in the algorithm we used to attribute our revenue by user geography in late 2015. While this issue did not affect our overall worldwide revenue, it did affect our attribution of revenue to different geographic regions. The fourth quarter of 2015 revenue by user geography for all regions was adjusted to reflect this reclassification. 6

Payments & Other Fees Revenue by User Geography In Millions Rest of World Asia-Pacific Europe US & Canada $226 $215 $8 $204 $202 $6 $18 $197 $195 $18 $6 $7 $6 $181 $15 $180 $7 $15 $175 $16 $17 $6 $7 $53 $8 $13 $12 $50 $43 $14 $44 $40 $42 $37 $40 $36 $147 $141 $140 $136 $135 $129 $125 $121 $117 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue- generating activity. This allocation differs from our revenue by geography disclosure in our condensed consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer. We discovered an error in the algorithm we used to attribute our revenue by user geography in late 2015. While this issue did not affect our overall worldwide revenue, it did affect our attribution of revenue to different geographic regions. The fourth quarter of 2015 revenue by user geography was adjusted to reflect this reclassification. 7

Average Revenue per User (ARPU) Payments and Other Fees US & Canada Worldwide Advertising $19.81 $17.07 $0.53 $15.65 $14.34 $0.50 $4.83 $12.43 $0.57 $4.23 $0.60 $4.01 $3.82 $0.10 $0.57 $3.32 $0.09 $19.28 $0.11 $0.12 $16.56 $0.11 $15.08 $13.74 $4.73 $11.86 $4.14 $3.89 $3.71 $3.21 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Europe Asia-Pacific Rest of World $5.98 $5.42 $4.72 $4.72 $0.12 $0.10 $2.07 $3.98 $1.98 $1.89 $1.41 $0.12 $0.12 $1.77 $0.02 $1.27 $0.02 $1.21 $1.56 $0.03 $0.11 $1.13 $0.03 $0.01 $5.86 $0.02 $0.01 $0.01 $5.32 $0.91 $0.01 $4.61 $4.60 $2.05 $1.96 $1.86 $0.01 $3.87 $1.74 $1.39 $1.54 $1.25 $1.20 $1.12 $0.90 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 8

Expenses as a % of Revenue Cost of Revenue Research & Development 25% 23% 23% 22% 18% 16% 14% 14% 14% 12% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Marketing & Sales General & Administrative 15% 14% 13% 13% 13% 8% 7% 6% 6% 6% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 In the fourth quarter of 2016, we elected to early adopt the Financial Accounting Standards Board (FASB)'s Accounting Standards Update No. 2016-09, Compensation Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09). As such, quarterly expenses for and following 2016 include the impact of ASU 2016-09 adoption. See ASU 2016-09 Adoption in the Appendix for additional information. 9

Income from Operations In Millions $4,566 $3,327 $3,117 $2,734 $2,560 $2,010 $1,459 $1,273 $933 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 In the fourth quarter of 2016, we elected to early adopt ASU 2016-09. As such, quarterly income from operations for and following 2016 includes the impact of ASU 2016-09 adoption. See ASU 2016-09 Adoption in the Appendix for additional information. 10

Operating Margin 52% 44% 44% 42% 41% 37% 32% 31% 26% Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 In the fourth quarter of 2016, we elected to early adopt ASU 2016-09. As such, quarterly operating margin for and following 2016 includes the impact of ASU 2016-09 adoption. See ASU 2016-09 Adoption in the Appendix for additional information. 11

Effective Tax Rate ($ in millions) Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Income before provision for income taxes $ 932 $ 1,273 $ 1,432 $ 2,557 $ 2,066 $ 2,754 $ 3,164 $ 4,533 $ 3,408 Provision for income taxes 420 554 536 995 328 471 537 965 344 Effective Tax Rate 45% 44% 37% 39% 16% 17% 17% 21% 10% In the fourth quarter of 2016, we elected to early adopt ASU 2016-09. As such, quarterly effective tax rate for and following 2016 includes the impact of ASU 2016-09 adoption. See ASU 2016-09 Adoption in the Appendix for additional information. 12

Net Income In Millions $3,568 $3,064 $2,627 $2,283 $1,738 $1,562 $896 $719 $512 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 In the fourth quarter of 2016, we elected to early adopt ASU 2016-09. As such, quarterly net income for and following 2016 includes the impact of ASU 2016-09 adoption. See ASU 2016-09 Adoption in the Appendix for additional information. 13

Diluted Earnings Per Share $1.21 $1.04 $0.90 $0.78 $0.60 $0.54 $0.31 $0.25 $0.18 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 In the fourth quarter of 2016, we elected to early adopt ASU 2016-09. As such, quarterly diluted earnings per share for and following 2016 include the impact of ASU 2016-09 adoption. See ASU 2016-09 Adoption in the Appendix for additional information. 14

Capital Investments In Millions $4,491 $2,523 $1,271 $1,132 Q1'16 Q1'17 2015 2016 Quarterly Annual Capital investments for periods presented were related to purchases of property and equipment. 15

Appendix