Facebook (FB, Financial) is the world's No.1 social networking site with over 1.40 billion monthly active users. People use FB as a medium to stay connected with friends and family, to discover what is going on in the world around them, and to share and express what matters to them to the people they care about.
First Quarter Results
Revenue increased by 42% and totaled at about $3.54 billion, when compared to $2.50 billion in the first quarter of 2014. Advertising revenue increased by 46% from last year and was at $3.32 billion. Payments and other fees revenue decreased by 5% from the first quarter of 2014, and was $226 million. Cost and expenses during the quarter increased by 83% from the first quarter of 2014 and was $2.61 billion. Revenue missed out on analyst expectations of $3.56 billion.
GAAP income from operations for the first quarter of 2015 was $933 million, which marked a decrease of 13% from the first quarter of 2014. Non-GAAP income from operations for the first quarter of 2015 was $1.84 billion, which increased by 30% compared to $1.42 billion for the first quarter of 2014. Capital expenditures for the first quarter of 2015 were $502 million.
GAAP net income for the first quarter of 2015 was $512 million, down 20% compared to $642 million for the first quarter of 2014. Non-GAAP net income for the first quarter of 2015 was $1.19 billion, up 28% compared to $926 million for the first quarter of 2014. GAAP diluted EPS was $0.18 in the first quarter of 2015, down 28% compared to $0.25 in the first quarter of 2014. Non-GAAP diluted EPS for the first quarter of 2015 was $0.42, up 20% compared to $0.35 in the first quarter of 2014.
Free cashflows for the first quarter of 2015 stood at $1.20 billion. Daily active users (DAUS) were 936 million on an average as of March 2015. Mobile DAUs were 798 million on average for March 2015. Monthly active users (MAUs) were 1.44 billion as of March 31, 2015. Mobile MAUs were 1.25 billion as of the current quarter.
What’s in Store
FB declared that 2015 will be a year of investment. It is already ramping up its investment plans. The mobile ads have already been a success and contributed to its revenue. The messenger team built up a new app called Hello. This app helps you to see who is calling and block the unwanted calls. Through this app if someone call you, and if that person’s number is not saved in your phone, you will be showed the information about the said person. You can also search for people and businesses on Facebook and call them with just one tap. So if a friend tells you about a new restaurant in your neighborhood, you can use Hello to find their hours, make a reservation and get directions, all without leaving the app.
FB’s Instagram recently collaborated with a popular match-making app Tinder. This will help users to link both their Instagram and Tinder profiles for an easier match-making. FB is constantly building on its messenger services.
Parting Thoughts
Facebook's mission is to give people the power to share and make the world more open and connected. People use FB to stay connected with friends and family, to discover what's going on in the world, and to share and express what matters to them. FB has a vast array of growth opportunities that have discovered. In the near future, the company will roll out video advertisements for U.S. users. This can be rolled out internationally over the coming years. FB currently has huge investment plans that include maintaining data servers to keep up with a growing user base.
The massive amount of data that the company has already collected (and it continues to collect) from the billion-plus users will be an extremely crucial asset that can be utilized in various ways to generate revenue. The future remains bright for FB, and more good news for the stock can be the company's inclusion within the S&P 500 index.
It is true that FB is heavily dependent on digital ads but Facebook’s success is by and largely dependent upon the number of its users. It has over 2 million advertisers as of now. This quarter,the company saw an increase in the number of its users, which is a good point. This first quarter the company posted mixed results, but I am quite bullish about this company and according to my opinion, it won’t let its investors down.
