Facebook Update

If anybody is still interested on Facebook on this board, here is a quick rundown on their earnings report from this afternoon:

Here are the most important numbers:

Revenue: $4.5 billion vs. analyst expectations of $4.37 billion, up 41% year-over-year.

Adjusted EPS: $0.57 vs. analyst expectations of $0.52.

MAUs: 1.55 billion monthly active users vs. 1.52 billion expected.

The after-hours stock was up nearly 5% initially, dipped down to +2%, and settled around 4% after the earnings call. At about 107.7, Facebook’s stock is at a new all-time high and shares are up roughly 25% since mid-August.

None of the numbers reported in the release were hugely surprising. Its expenses were up 68% year-over-year, but the company had previously said that it plans to invest heavily this year. Also as expected, Facebook saw an increase in the percentage of its revenue coming from mobile.

From http://www.businessinsider.com/facebook-q3-earnings-2015-11

The big, mind-blowing number everybody will be talking about though is that there are now 8 billion video views on Facebook a day. That’s double the number from April.

Facebook is also averaging a billion users/day.

A lot to like here.

Here are the 1YPEG numbers we are all familiar with. Revenue and EPS growth are slowing down marginally, as you can see. Also the bottom line is being hurt by all of the spending they’re doing but they have said all along this year would be an heavy investment year:


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

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

Current
(11/4/15, 2015 Q3 Earnings):

Revenue Growth (billions)
2014 Q3 TTM Revenue = 11.2
2015 Q3 TTM Revenue = 15.937
Year Over Year Revenue Growth = 42.29%, previously 46.19%

Non-GAAP Earnings Growth (per share)
2014 Q3 TTM Earnings = 1.53
2015 Q3 TTM Earnings = 2.03
Year Over Year EPS Growth = 32.7%, previously 38%

P/E = (Check Current Price) 103.94/2.03 = 51.2

1YPEG = 51.2/32.7 = 1.57

  • Matt
26 Likes

Thanks for the rundown. I’m long FB because I like that it’s really the dominant force in connecting the world, and also for Instagram, Whatsapp, and to a lesser extent Oculus.

There is a video from earlier this year from a marketing guy regarding the “four horsemen” of tech – AMZN, FB, GOOG, AAPL (https://www.youtube.com/watch?v=XCvwCcEP74Q). I agree with a lot of Galloway’s arguments (though he might have underestimated Amazon Web Services). My favorite line was his assertion that Facebook has a bigger reach than God (having more users than the Catholic church).

5 Likes