Facebook Reports Second Quarter 2019 Results
 
MENLO PARK, Calif. – July 24, 2019 – Facebook, Inc. (Nasdaq: FB) today reported financial results for the quarter ended June 30, 2019.

"We had a strong quarter and our business and community continue to grow," said Mark Zuckerberg, Facebook founder and CEO. "We are investing in building stronger privacy protections for everyone and on delivering new experiences for the people who use our services."


Second Quarter 2019 Financial Highlights
 
Three Months Ended June 30,
 
Year-over-Year % Change
In millions, except percentages and per share amounts
2019*
 
2018
 
Revenue:
 
 
 
 
 
   Advertising
$
16,624

 
$
13,038

 
28
 %
   Payments and other fees
262

 
193

 
36
 %
Total revenue
16,886

 
13,231

 
28
 %
Total costs and expenses
12,260

 
7,368

 
66
 %
Income from operations
$
4,626

 
$
5,863

 
(21
)%
Operating margin
27
%
 
44
%
 

Provision for income taxes
$
2,216

 
 
 
 
Effective tax rate
46
%
 
 
 


Net income
$
2,616

 
$
5,106

 
(49
)%
Diluted earnings per share (EPS)
$
0.91

 
$
1.74

 
(48
)%
*Includes an additional $2.0 billion legal expense related to the U.S. Federal Trade Commission (FTC) settlement and a $1.1 billion income tax expense due to the developments in Altera Corp. v. Commissioner, as discussed below. As the FTC expense is not expected to be tax-deductible, it had no effect on our provision for income taxes. Excluding these expenses, our operating margin would have been 12 percentage points higher, our effective tax rate would have been 30 percentage points lower and our diluted EPS would have been $1.08 higher.

Second Quarter 2019 Operational and Other Financial Highlights

Daily active users (DAUs) – DAUs were 1.59 billion on average for June 2019, an increase of 8% year-over-year.
Monthly active users (MAUs) – MAUs were 2.41 billion as of June 30, 2019, an increase of 8% year-over-year.
Mobile advertising revenue – Mobile advertising revenue represented approximately 94% of advertising revenue for the second quarter of 2019, up from approximately 91% of advertising revenue in the second quarter of 2018.
Capital expenditures – Capital expenditures, including principal payments on finance leases, were $3.78 billion for the second quarter of 2019.
Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $48.60 billion at the end of the second quarter of 2019.
Headcount – Headcount was 39,651 as of June 30, 2019, an increase of 31% year-over-year.
In addition, we estimate that more than 2.1 billion people now use Facebook, Instagram, WhatsApp, or Messenger (our "Family" of services) every day on average, and more than 2.7 billion people use at least one of our Family of services each month.
In July 2019, we entered into a settlement and modified consent order to resolve the inquiry of the FTC into our platform and user data practices. Among other matters, our settlement with the FTC requires us to pay a penalty of $5.0 billion and to significantly enhance our practices and processes for privacy compliance and oversight. In particular, we have agreed to implement a comprehensive expansion of our privacy program, including substantial management and board of directors oversight, stringent operational requirements and reporting obligations, and a process to regularly certify our compliance with the privacy program to the FTC. In the second quarter of 2019, we recorded an additional $2.0 billion accrual in

1


The following information was filed by Facebook Inc (FB) on Wednesday, July 24, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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