Your Friendly Facebook Quarterly Update

Facebook reported earnings after the close today. And once again they absolutely crushed it!

Facebook continued its winning streak as other tech companies floundered, reaching 1.65 billion monthly users and surpassing estimates in its Q1 2016 earnings report with $5.38 billion in revenue and $0.77 earnings per share. Facebook’s share price climbed over 8% in the moments after earnings were announced, reaching over $117 in after-hours trading.

Revenue was up 52% year over year, and Facebook is still operating with strong efficiency, coining $1.5 billion in profit in Q1, up 195% year over year. Average revenue per user was up 32% YoY.

From http://techcrunch.com/2016/04/27/facebook-q1-2016-earnings/

Here is the quick rundown of what their earnings and revenue growth is looking like:


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

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

Current (2016 Q1 Earnings):

Revenue Growth (billions)
2015 Q1 TTM Revenue = 13.507
2016 Q1 TTM Revenue = 19.766
Year Over Year Revenue Growth = 46.33%, previous Q 43.8%,

EPS Growth (non-GAAP)
2015 Q1 TTM Earnings = 1.82
2016 Q1 TTM Earnings = 2.63
Year Over Year EPS Growth = 44.5%, previous Q 30.29%

P/E (Check Current Price) 108.89/2.63 = 41.4

1YPEG = 41.4/44.5 = 0.93

User growth continues to climb. Compared to Twitter, there’s just no contest:

DAUs: 1.09 billion average, +16% YOY
Mobile DAUs: 989 million average, +24% YOY
MAUs: 1.65 billion, +15% YOY
Mobile MAUs: 1.51 billion, +21% YOY

Have not listened to conference call yet, so I do not know if the user engagement is down as was reported earlier this month. What I do know is that there are more active users and that Facebook is making more and more money from these active users. Oh, and revenue and EPS growth is accelerating, not slowing down.

Shares look sharply up in AH trading.

Matt
Long FB
MasterCard (MA) and PayPal (PYPL) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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Aaah, I want to rec this one twice!!!

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FB had a fantastic quarter the last time, too. Then the stock opened at $105 the next day and has done pretty much nothing in the last 3 months. You could have picked up FB shares earlier today at $106. Maybe it will be different this time. FB is my biggest holding.

You’re right dovbgood, but it’s hard to complain too much. They’re probably going to open up about 50% higher than they were a year ago. Not too shabby!

Matt
Long FB
MasterCard (MA) and PayPal (PYPL) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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FB is my highest conviction stock followed by SKX. For the second time in a row, FB had the best quarterly report and CC of all the companies in the S&P 500. Very impressive.

It is my biggest holding already but I plan to add more.

The numbers you showed demonstrate that FB fits right in with the stocks we discuss in this group. Growth rate is higher than P/E.

There are 1.5B people logging in to FB daily!!

3 Likes

reaching 1.65 billion monthly users…

I looked it up – current global population is 7.125 billion.

This means that 23+% of all the humans there are engage with FB every month. That astounds me.

Jackson
whose mouth hangs open and head shakes slowly back and forth, whispering “How can that be?”

1 Like

Jackson
whose mouth hangs open and head shakes slowly back and forth, whispering “How can that be?”

:wink:

FB is now my largest position after adding some 2018 options last week to the shares already held.

I’m liking it!

JT

This means that 23+% of all the humans there are engage with FB every month.

Makes one wonder about the law of large numbers and growth, doesn’t it?

“This means that 23+% of all the humans there are engage with FB every month.”

Makes one wonder about the law of large numbers and growth, doesn’t it?

True, user growth can only go so high, but it seems they’ve only just BEGUN to monetize it!

True, user growth can only go so high, but it seems they’ve only just BEGUN to monetize it!

That is indeed the key, Foodles! I’m glad you brought it up. Facebook Messenger has 900 million MAUs, yet they haven’t done anything to monetize it…yet. Ditto for WhatsApp and its 1 billion MAUs. There are plans for both of those apps - big plans - but they’re being careful and cautious just as they were with their flagship platform and Instagram.

Speaking of Instagram, they’ve been advertising on it for less than a year and already there are 200k advertisers running ads on the platform. That’s incredible!

As Joshua Brown writes on his blog Reformed Broker:

Facebook’s market cap is $330 billion as a result of its explosive open to new highs this morning. It’s trading at more than 13x sales and is now one of the most valuable companies in the history of planet earth. You can say it shouldn’t be for reasons A, B, and C – and these would be rational opinions. But has any company before ever monopolized this much of humanity’s time and attention, en masse, around the world? Will any subsequent company be able to do so any time soon?

The Super Bowl is the most widely watched event in the world, and it’s because roughly 100 million people watch it. Facebook wouldn’t get out of bed for that kind of nightly audience. And think of the dollar amounts that the Super Bowl commands for thirty-second ads. Facebook’s usage is more than 10X the Super Bowl and it’s 24 / 7 / 365.

From http://thereformedbroker.com/2016/04/28/the-new-religion/

How do you value that? IMHO, they’ve barely scratched the surface of its earnings power thus far.

Matt
Long FB
MasterCard (MA) and PayPal (PYPL) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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True, user growth can only go so high, but it seems they’ve only just BEGUN to monetize it!

But, one also doesn’t know the extent to which they can.