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Facebook Earnings Beat - Revenue Misses

October 31, 2018

Facebook reported financial results for the quarter ended September 30, 2018.

Q3 revenue came in at $13.73 billion, up 33 percent from the same period last year. But, that less than the $13.78 billion which was expected. The firm's Q3 profit was reported at $5.14 billion, or $1.76 per share. That number was up 9 percent from the same period last year and more than the $1.48 per share which was sought.

"Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day," said Mark Zuckerberg, Facebook founder and CEO. "We're building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well."

Third Quarter 2018 Financial Highlights


 

Three Months Ended September 30,


 

Year-over-Year %
Change

In millions

2018


 

2017


 

Revenue:


 

 

 

 

 

Advertising

$

13,539


 

 

$

10,142


 

 

33

%

Payments and other fees

188


 

 

186


 

 

1

%

Total revenue

13,727


 

 

10,328


 

 

33

%

Total costs and expenses

7,946


 

 

5,206


 

 

53

%

Income from operations

$

5,781


 

 

$

5,122


 

 

13

%

Operating margin

42

%


 

50

%


 

 

Provision for income taxes

$

775


 

 

 

 

 

 

 

Effective tax rate

13

%


 

 

 

 

 

 

Net income

$

5,137


 

 

$

4,707


 

 

9

%

Diluted Earnings per Share (EPS)

$

1.76


 

 

$

1.59


 

 

11

%

Third Quarter 2018 Operational and Other Financial Highlights

  • Daily active users (DAUs) DAUs were 1.49 billion on average for September 2018, an increase of 9% year-over-year.
  • Monthly active users (MAUs) MAUs were 2.27 billion as of September 30, 2018, an increase of 10% year-over-year.
  • Mobile advertising revenue Mobile advertising revenue represented approximately 92% of advertising revenue for the third quarter of 2018, up from approximately 88% of advertising revenue in the third quarter of 2017.
  • Effective Tax Rate Our effective tax rate was 13%, which was lower than expected primarily due to the withdrawal in August of an appellate court ruling in the case of Altera Corp. v. Commissioner.
  • Capital expenditures Capital expenditures for the third quarter of 2018 were $3.34 billion.
  • Cash and cash equivalents and marketable securities Cash and cash equivalents and marketable securities were $41.21 billion at the end of the third quarter of 2018.
  • Headcount Headcount was 33,606 as of September 30, 2018, an increase of 45% year-over-year.

In addition, we estimate that more than 2.6 billion people now use Facebook, WhatsApp, Instagram, or Messenger (our "Family" of services) each month, and more than 2 billion people use at least one of our Family of services every day on average.

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