Facebook Reports First Quarter 2013 Results

Facebook, Inc. (NASDAQ: FB) today reported financial results for the first quarter, which ended March 31, 2013.

"We've made a lot of progress in the first few months of the year," said Mark Zuckerberg, Facebook founder and CEO. "We have seen strong growth and engagement across our community and launched several exciting products." 

First Quarter 2013 Operational Highlights

• Daily active users (DAUs) were 665 million on average for March 2013, an increase of 26% year-over-year.
• Monthly active users (MAUs) were 1.11 billion as of March 31, 2013, an increase of 23% year-over-year.
• Mobile MAUs were 751 million as of March 31, 2013, an increase of 54% year-over-year.

Recent Business Highlights

• Launched Facebook Home, a mobile experience for Android that puts people before apps and makes the phone a more social experience.  
• Instagram reached 100 million monthly active users in the first quarter of 2013.
• Launched new advertising products such as Lookalike Audiences, Managed Custom Audiences, and Partner Categories, which help marketers improve their targeting capabilities on Facebook.
• Continue to invest in our ad serving and measurement platforms:
  • Partnered with Datalogix, Epsilon, Acxiom, and BlueKai to enable marketers to incorporate off-Facebook purchasing data in order to deliver more relevant ads to users.
  • Enhanced ability to measure advertiser ROI on digital media across the internet through our acquisition of the Atlas Advertising Suite.
• Appointed Susan D. Desmond-Hellmann, M.D., M.P.H., chancellor of the University of California, San Francisco (UCSF), to the company's board of directors.

First Quarter 2013 Financial Highlights

Revenue — Revenue for the first quarter totaled $1.46 billion, an increase of 38%, compared with $1.06 billion in the first quarter of 2012. 

• Revenue from advertising was $1.25 billion, representing 85% of total revenue and a 43% increase from the same quarter last year.
• Mobile advertising revenue represented approximately 30% of advertising revenue for the first quarter of 2013.
• Payments and other fees revenue was $213 million for the first quarter of 2013.

Costs and expenses — First quarter GAAP costs and expenses were $1.08 billion, an increase of 60% from the first quarter of 2012, driven primarily by infrastructure expense and increased headcount.  Non-GAAP costs and expenses were $895 million in the first quarter, up 56% compared to $573 million for the first quarter of 2012.

Income from operations — For the first quarter, GAAP income from operations was $373 million, down 2% from $381 million in the first quarter of 2012. Excluding share-based compensation and related payroll tax expenses, non-GAAP income from operations for the first quarter was $563 million, up 16% compared to $485 million for the first quarter of 2012.

Operating margin — GAAP operating margin was 26% for the first quarter of 2013, compared to 36% in the first quarter of 2012. Excluding share-based compensation and related payroll tax expenses, non-GAAP operating margin was 39% for the first quarter of 2013, compared to 46% for the first quarter of 2012.

Provision for income taxes — GAAP income tax expense for the first quarter of 2013 was $134 million, representing a 38% effective tax rate. Excluding share-based compensation expense and related payroll tax expenses, the non-GAAP effective tax rate would have been approximately 43%.

Net income and EPS — For the first quarter, GAAP net income was $219 million, up 7% compared to net income of $205 million for the first quarter of 2012. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP net income for the first quarter of 2013 was $312 million, up 9% compared to $287 million for the first quarter of 2012.  GAAP diluted EPS was $0.09 in the first quarter of 2013.  Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP diluted EPS for the first quarter of 2013 was $0.12, essentially flat compared to the first quarter of 2012.

Capital expenditures — Capital expenditures for the quarter were $327 million, a 28% decrease from the first quarter of 2012. Additionally, $11 million of equipment was procured or financed through capital leases during the first quarter of 2013.

Cash and marketable securities — Cash and marketable securities were $9.5 billion at the end of the first quarter of 2013. 

Webcast and Conference Call Information

Facebook will host a conference call to discuss the results at 2 p.m. PT / 5 p.m. ET today. The live webcast can be accessed at the Facebook Investor Relations website at investor.fb.com, along with the company's earnings press release, financial tables and slide presentation.

Following the call, a replay will be available at the same website. A telephonic replay will be available for one week following the conference call at + 1 (404) 537-3406 or + 1 (855) 859-2056, conference ID 29615930.