Facebook Reports Stellar 2017 Q2

Investment Analysis Clubs Saul’s Investing Discussions
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One day somebody is going to have to remind me why this stock doesn’t drum up more interest on this board. It was another excellent quarter for the social media giant. Shares were up more than 3% in AH trading yesterday, we’ll see how it reacts today. Via CNBC:

Facebook reported a much-higher quarterly profit, driven by surging sales of mobile video ads, as its advertising revenue grew at more than twice the rate of larger rival Google.

The company also said on a conference call to discuss the results that 2017 expenses would rise less than previously forecast – it’s now saying that expenses will go up 40 to 45 percent, instead of 40 to 50 percent.

The stock jumped as much as 4 percent to a record high after Facebook announced that news.

…

Mobile ad sales now provide most of Facebook’s revenue and hit $8 billion for the quarter, a jump of 53 percent and more than analysts expected.

“As content consumption changes, online marketers are saying, 'I want to reach consumers wherever they are, whatever device they’re using,” said David Staas, president of NinthDecimal, which provides location data and other digital marketing tools to 250 ad agencies, brand advertisers and media companies.

Read more at http://www.cnbc.com/2017/07/26/facebook-earnings-q2-2017.htm…

Here are some numbers:


Revenue (billions)	Q1		Q2		Q3		Q4
2013			1.458		1.813		2.016		2.585
2014			2.502		2.910		3.203		3.851
2015			3.543		4.042		4.501		5.841
2016			5.382		6.436		7.011		8.809
2017			8.032		9.321

EPS (non-GAAP)	        Q1		Q2		Q3		Q4
2013			0.12		0.19		0.27		0.32
2014			0.35		0.43		0.43		0.54
2015			0.42		0.50		0.57		0.79
2016			0.77		0.97		1.09		1.41

EPS (GAAP)		Q1		Q2		Q3		Q4
2014							0.30		0.25
2015			0.18		0.25		0.31		0.54
2016			0.60		0.78		0.82		1.21
2017			1.04		1.32

2017 Q2 Earnings (Current):

Revenue Growth (billions)
2016 Q2 TTM Revenue = 22.16
2017 Q2 TTM Revenue = 33.173
YOY TTM Revenue Growth = 50%, previous quarter 53.2%

EPS Growth (GAAP)
2016 Q2 TTM Earnings = 2.23
2017 Q2 TTM Earnings = 4.39
YOY TTM EPS Growth = 97%, previous quarter 122%
P/E (Check Current Price) = 165.61/4.39 = 37.7
1YPEG = 0.39

Important note! Facebook ceased reporting non-GAAP EPS 2016 Q4. Will leave the non-GAAP historical numbers up for a few quarters but will eventually leave it off my updates.

Here are some of the other quarter’s highlights:

DAUs (daily active users): 1.32B, +17% YOY
MAUs (monthly active users): 2.01B, +17% YOY
Cash and cash equivalents: $35.45, previous quarter $32.3B, +9.75% sequentially
Cap Ex: $1.44B
Mobile advertising revenue: Made up 87% of all revenue, up from 84% of all revenue in prior year’s quarter

Matt
Long FB
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See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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Matt,

Thanks for the FB post. I bought FB simply because every young person I knew uses it. It is a classic Peter Lynch type of investment… the masses keep using the product. There are competitors but FB is not going away. It has become a part of our lexicon, even if we’ve never posted on FB (as this old geezer admits).

Jim

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I bought FB simply because every young person I knew uses it.

When a company has 2 BILLION users it’s something special. What other company has more than 25% of the WORLD’S entire population (and growing) as users? It’s not just young people who use FB.

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It has become a part of our lexicon, even if we’ve never posted on FB (as this old geezer admits).

Then you must be REALLY old :wink: I’m in my early 40’s, my parents in their mid 60’s, and I’m not sure which of us is on it more.

If anyone 40 or older is on social media in any way, the OVERWHELMING data says they’re on Facebook. And the older one is, the more likely they’re only on one platform (Facebook).

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Yes FB is a monster. I got shares at the IPO and flipped them for a quick $5 the day of the IPO. I thought I was smart when it dropped into the $20s but not so smart when I eventually repurchased shares at $77. I haven’t sold a share since and got a great opportunity to double up on the “flash crash” at the same price. I think they have just started to monetize Whatsapp and Messenger (each with over 1B users) so they still have quite a runway.

Rob

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Actually, now it’s the YOUNG folks that have STOPPED using Facebook. They have stopped because everyone and their mother (literally) is on it. My 3 kids (late teens to early 20s) NEVER use Facebook unless they HAVE to for school or some other purpose. It’s not the “cool” app anymore (hasn’t been for some time) and this could have doomed it to failure like the original “MySpace”, but what Facebook did was be able to pull in the older generations which have stayed with in and aren’t as fickle as the youngsters to move on to the next great app.

BTW, the majority of what my kids and their friends use are Snapchat (although I wouldn’t invest in it because Instagram is killing it, and I’m in FB), Youtube (I’m in GOOG), and Reddit.

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Actually, now it’s the YOUNG folks that have STOPPED using Facebook. They have stopped because everyone and their mother (literally) is on it.

Yes, but those are the folks with the purse strings, and the eyeballs for all those sponsored ads in their feed. FB has done a great job monetizing.

BTW, the majority of what my kids and their friends use are Snapchat (although I wouldn’t invest in it because Instagram is killing it, and I’m in FB)

And SNAP’s down about 50% since it’s IPO. IG’s not just killing it, they’re killing SNAP (though it could be argued that SNAP is killing itself with feature-creep).

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My kids are Millennials and they and their friends are all on FB so I guess “it depends”. I can’t vouch for younger cohorts although my niece and nephews and their friends in the 19-23 range are all on FB also. I wouldn’t write off all the youth.

Rob

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Anecdotally, my kids used to be all Snapchat. But now Instagram seems like the preferred medium since they copied many of snaps features.

Scott

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I bought FB simply because every young person I knew uses it.

You just revealed how old you are :slight_smile: no one who is young uses facebook.

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  1. FB is definitely dead to the younger generation, people under the age of 15 don’t typically have them anymore, they prefer snapchat and Instagram.

  2. Instagram isn’t killing snapchat, although everyone likes to think so.

Two completely separate social medias, don’t be fooled by what others say.

The instagram stories numbers are completely bogus, talk to anyone under the age of 20 and they’ll agree that there are 10-20X More stories posted on their snapchat feeds rather than their IG feeds everyday, if not more. Now can snapchat monetize? No idea, but those numbers that say IG stories are more popular than Snapchats just aren’t right. How are they twisting the numbers? No idea but it’s simply not true.

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Just an edit. Young means people under the age of 14-16. People over 16 got a facebook 5-10 years ago when it was cool and you had to lie about your age because at the time you had to be 13 to make an account. I know because I was one of those kids. So yes, everyone over 18 has a facebook, but it’s becoming more like linkedin rather than what it used to be. It’s not for fun, it’s for having a presence online, texting people whose phone #s you don’t have (Through messenger), and for stalking guys/girls your friends are interested in. Very few people post photos or say anything meaningful on the platform anymore who are young.

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Thank you Matt, for posting this. I continue to believe in the stock, and have held fast to my shares.

TracyK