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Quarterly Earnings Slides 
Q3 2014
Non-GAAP Measures 
In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These 
non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance 
prepared in accordance with U.S. GAAP. A reconciliation of non-GAAP financial measures to the corresponding 
GAAP measures is provided in the appendix to this presentation. 
2
665 699 728 
757 
180 195 208 216 
802 
829 864 
233 244 256 
In Millions 
Rest of World 
Asia 
Europe 
US & Canada 
584 618 
141 153 167 181 189 200 216 228 152 242 161 
160 169 179 182 188 195 203 206 212 
132 135 139 142 144 147 150 152 155 
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
3 
Daily Active Users (DAUs) 
DAUs / MAUs 
Q3'12 Q4'12 Q1'13 Q2'13 Q3’13 Q4'13 Q1'14 Q2'14 Q3'14 
58% 59% 60% 61% 61% 62% 63% 63% 64% 
Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile 
DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify 
as such users, respectively, based on their other activities on Facebook.
4 
Mobile Daily Active Users (Mobile DAUs) 
In Millions 
329 
374 
425 
469 
507 
556 
609 
654 
703 
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile 
DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify 
as such users, respectively, based on their other activities on Facebook.
1,110 
1,155 1,189 
1,228 1,276 
1,317 1,350 
288 304 327 346 362 376 395 411 423 
1,007 
1,056 
277 298 319 339 351 368 390 410 426 
253 261 269 272 276 282 289 292 296 
189 193 195 198 199 201 202 204 206 
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
5 
Monthly Active Users (MAUs) 
In Millions 
Rest of World 
Asia 
Europe 
US & Canada 
Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile 
DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify 
as such users, respectively, based on their other activities on Facebook.
6 
Mobile Monthly Active Users (Mobile MAUs) 
In Millions 
604 
680 
751 
819 
874 
945 
1,008 
1,070 
1,124 
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile 
DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify 
as such users, respectively, based on their other activities on Facebook.
7 
Mobile-Only Monthly Active Users (Mobile-Only MAUs) 
In Millions 
254 
296 
341 
399 
456 
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Mobile-only MAUs are defined as users who accessed Facebook solely through mobile apps or mobile versions of our website, or used our Messenger app, in the 
last 30 days of the given quarter. The number of mobile-only MAUs do not include Instagram users unless they would otherwise qualify as such users based on 
their other activities on Facebook.
Revenue 
In Millions 
Payments and other fees 
Advertising 
$1,086 
* 
$1,329 $1,245 
$1,599 
$1,798 
$2,344 $2,265 
$2,676 
$2,957 
$176 
$256 
$213 
$214 
$218 
$241 $237 
$234 
$246 
$1,262 
$1,585 
$1,458 
$1,813 
$2,016 
$2,585 $2,502 
$2,910 
$3,203 
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
8 
*In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of our 
Form 10-K filed on February 1, 2013.
In Millions 
Rest of World 
Asia 
Europe 
US & Canada 
$341 $1,514 
$637 $780 $679 $848 $962 
$1,206 $1,179 $1,308 
$440 
$423 
$505 
$538 
$727 $698 
$824 
$844 
$154 
$198 
$197 
$247 
$278 
$341 $354 
$431 
$492 
$130 
$167 
$159 
$213 
$238 
$311 $271 
$347 
$353 
$1,262 
$1,585 
$1,458 
$1,813 
$2,016 
$2,585 $2,502 
$2,910 
$3,203 
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
9 
Revenue by User Geography 
Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating 
activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically 
apportioned based on the location of the marketer or developer.
In Millions 
Rest of World 
Asia 
Europe 
US & Canada 
10 
Advertising Revenue by User Geography 
$295 $1,362 
$538 $631 $552 
Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating 
activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically 
apportioned based on the location of the marketer or developer. 
$721 $832 
$1,068 $1,039 $1,175 
$374 
$367 
$451 
$482 
$658 $631 
$757 
$783 
$133 
$168 
$176 
$225 
$255 
$318 $333 
$408 
$469 
$120 
$156 
$150 
$202 
$229 
$300 $262 
$336 
$343 
$1,086 
$1,329 
$1,245 
$1,599 
$1,798 
$2,344 
$2,265 
$2,676 
$2,957 
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14
In Millions 
Rest of World 
Asia 
Europe 
US & Canada 
$99 
$149 
$127 $127 $130 $138 $140 $133 
$152 
$46 
$66 
$56 $54 $56 
$69 $67 $67 
$61 
$21 
$30 
$21 $22 $23 
$23 $21 $23 
$23 
$10 
$11 
$9 $11 $9 
$11 $9 $11 
$10 
$176 
$256 
$213 $214 $218 
$241 $237 $234 
$246 
* 
Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
11 
Payments & Other Fees Revenue by User Geography 
Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a 
revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where 
revenue is geographically apportioned based on the location of the marketer or developer. 
*In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 
and 48 of our Form 10-K filed on February 1, 2013.
12 
Average Revenue per User (ARPU) 
Europe 
$1.76 
Worldwide 
$2.36 $2.21 
$2.61 $2.66 
$0.20 
$0.25 
$0.23 
$0.23 $0.21 
$1.96 
$2.61 
$2.44 
$2.84 $2.87 
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Asia 
$0.74 
$0.88 $0.88 
US & Canada 
$1.02 $1.12 
$0.07 
$0.06 $0.06 
$0.06 
$0.06 
$0.81 
$0.95 $0.93 
$1.08 
$1.18 
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Rest of World 
$0.65 
$0.81 
Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform 
a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is 
geographically apportioned based on the location of the marketer or developer. Please see Facebook’s most recent quarterly or annual report filed with the 
SEC for the definition of ARPU. 
$0.68 
$0.83 $0.82 
$0.03 
$0.03 
$0.02 
$0.03 $0.02 
$0.67 
$0.84 
$0.70 
$0.86 $0.85 
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
$1.53 
$1.94 $1.81 
$2.06 $2.22 
$0.19 
$0.20 
$0.19 
$0.18 
$0.18 
$1.72 
$2.14 
$2.00 
$2.24 
$2.40 
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
$4.19 
$5.34 $5.16 $5.79 
$6.64 
$0.65 
$0.69 $0.69 
$0.66 
$0.74 
$4.85 
$6.03 $5.85 
$6.44 
$7.39 
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Payments 
Advertising
13 
Expenses as a % of Revenue 
Amortization of intangibles 
Cost of Revenue 
Marketing & Sales 
Share-based compensation + Payroll tax related to share-based compensation All other expenses 
12% 11% 13% 12% 12% 
10% 10% 11% 10% 10% 
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Research & Development 
18% 
9% 
16% 
7% 
18% 17% 
8% 8% 
19% 
8% 
9% 9% 10% 9% 11% 
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
General & Administrative 
8% 10% 
7% 7% 8% 
6% 5% 5% 5% 6% 
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
24% 
18% 18% 15% 16% 
25% 
19% 18% 
16% 18% 
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14
Income from Operations 
GAAP Income from Operations (In Millions) 
$373 
$562 
$736 
$1,133 $1,075 
$1,390 $1,397 
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Non-GAAP Income from Operations (In Millions) 
$596 
$830 
$1,024 
$1,498 $1,415 
$1,753 $1,820 
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
14 
Non-GAAP income from operations excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and amortization of 
intangibles—see the Appendix for a reconciliation of this non-GAAP measure to GAAP income from operations.
15 
Operating Margin 
GAAP Operating Margin 
26% 
31% 
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Non-GAAP Operating Margin 
37% 
41% 46% 51% 
44% 43% 48% 44% 
58% 57% 60% 57% 
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Non-GAAP operating margin excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and amortization of 
intangibles—see the Appendix for a reconciliation of this non-GAAP measure to GAAP operating margin.
16 
Effective Tax Rate 
GAAP Effective Tax Rate 
Non-GAAP Effective Tax Rate 
Q1 Q2 Q3 Q4 Q1 Q2 Q3 
($ in millions) 2013 2013 2013 2013 2014 2014 2014 
GAAP income before provision for income taxes $ 353 $ 545 $ 726 $ 1,130 $ 1,075 $ 1,386 $ 1,336 
GAAP provision for income taxes 134 212 301 607 433 595 530 
Effective Tax Rate 38% 39% 41% 54% 40% 43% 40% 
Q1 Q2 Q3 Q4 Q1 Q2 Q3 
($ in millions) 2013 2013 2013 2013 2014 2014 2014 
Non-GAAP income before provision for income taxes 576 813 1,014 1,495 1,415 1,749 1,759 
Non-GAAP provision for income taxes 241 294 348 681 489 627 610 
Effective Tax Rate 42% 36% 34% 46% 35% 36% 35%
17 
Net Income 
GAAP Net Income (In Millions) 
$219 
$333 $425 
$523 
$642 
$791 $806 
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Non-GAAP Net Income (In Millions) 
$335 
$519 
$666 
$814 $926 
Non-GAAP net income excludes share-based compensation expense, payroll tax expenses related to share-based compensation, related income 
tax adjustments, and amortization of intangibles—see the Appendix for a reconciliation of this non-GAAP measure to GAAP net income. 
$1,121 $1,149 
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14
18 
Diluted Earnings Per Share 
GAAP Diluted Earnings Per Share 
$0.09 
$0.13 
$0.17 
$0.20 
$0.25 
$0.30 $0.30 
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Non-GAAP Diluted Earnings Per Share 
$0.13 
$0.21 
$0.27 
$0.32 $0.35 
$0.43 $0.43 
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Non-GAAP diluted earnings per share excludes share-based compensation expense, payroll tax expenses related to share-based compensation, 
related income tax adjustments, and amortization of intangibles—see the Appendix for a reconciliation of this non-GAAP measure to GAAP 
diluted earnings per share.
19 
Capital Investments 
In Millions 
Property and equipment acquired 
under capital leases 
Purchases of property 
and equipment 
$606 
$1,235 
$1,362 
$473 
$340 
$1,079 
$1,575 
$1,373 
2011 2012 2013 
Annual 
$879 
$1,314 
$890 
$1,314 
YTD Q3'13 YTD Q3'14 
Quarterly
Appendix
21 
Reconciliations 
Income from Operations (in millions) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
GAAP income from operations $ 373 $ 562 $ 736 $ 1,133 $ 1,075 $ 1,390 $ 1,397 
Share-based compensation expense 170 224 239 273 274 314 353 
Payroll tax expenses related to share-based compensation 20 8 12 53 25 8 11 
Amortization of intangible assets 33 36 37 39 41 41 59 
Non-GAAP income from operations $ 596 $ 830 $ 1,024 $ 1,498 $ 1,415 $ 1,753 $ 1,820 
Operating Margin Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
GAAP operating margin 26% 31% 37% 44% 43% 48% 44% 
Share-based compensation expense 12% 12% 12% 11% 11% 11% 11% 
Payroll tax expenses related to share-based compensation 1% 0% 1% 2% 1% 0% 0% 
Amortization of intangible assets 2% 2% 2% 2% 2% 1% 2% 
Non-GAAP operating margin 41% 46% 51% 58% 57% 60% 57% 
Net Income (in millions) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
GAAP net income $ 219 $ 333 $ 425 $ 523 $ 642 $ 791 $ 806 
Share-based compensation expense 170 224 239 273 274 314 353 
Payroll tax expenses related to share-based compensation 20 8 12 53 25 8 11 
Amortization of intangible assets 33 36 37 39 41 41 59 
Income tax adjustments (107) (82) (47) (74) (56) (33) (80) 
Non-GAAP net income $ 335 $ 519 $ 666 $ 814 $ 926 $ 1,121 $ 1,149 
Diluted Earnings Per Share Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
GAAP diluted earnings per share $ 0.09 $ 0.13 $ 0.17 $ 0.20 $ 0.25 $ 0.30 $ 0.30 
Non-GAAP adjustments to net income 0.04 0.08 0.10 0.12 0.10 0.13 0.13 
Non-GAAP adjustments to diluted shares - - - - - - - 
Non-GAAP diluted earnings per share $ 0.13 $ 0.21 $ 0.27 $ 0.32 $ 0.35 $ 0.43 $ 0.43
Effective Tax Rate (in millions) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
GAAP income before provision for income taxes $ 353 $ 545 $ 726 $ 1,130 $ 1,075 $ 1,386 $ 1,336 
GAAP provision for income taxes 134 212 301 607 433 595 530 
GAAP effective tax rate 38% 39% 41% 54% 40% 43% 40% 
GAAP income before provision for income taxes $ 353 $ 545 $ 726 $ 1,130 $ 1,075 $ 1,386 $ 1,336 
Share-based compensation and related payroll tax expenses 190 232 251 326 299 322 364 
Amortization of intangibles 33 36 37 39 41 41 59 
Non-GAAP income before provision for income taxes $ 576 $ 813 $ 1,014 $ 1,495 $ 1,415 $ 1,749 $ 1,759 
Non-GAAP provision for income taxes 241 294 348 681 489 627 610 
Non-GAAP effective tax rate 42% 36% 34% 46% 35% 36% 35% 
22 
Reconciliations (continued)
23 
Reconciliations (continued) 
Free Cash Flow (in millions) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 
Net cash provided by operating activities $ 719 $ 1,322 $ 950 $ 1,231 $ 1,285 $ 1,341 $ 1,248 
Purchases of property and equipment 327 268 284 483 363 469 482 
Property and equpiment acquired under capital leases 11 - - - - - - 
Free Cash Flow $ 381 $ 1,054 $ 666 $ 748 $ 922 $ 872 $ 766
Limitations of Key Metrics and Other Data 
The numbers for our key metrics, which include our daily active users (DAUs), mobile DAUs, monthly active users (MAUs), 
mobile MAUs, and average revenue per user (ARPU), as well as certain other metrics such as mobile-only MAUs, are 
calculated using internal company data based on the activity of user accounts. While these numbers are based on what we 
believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges 
in measuring usage of our products across large online and mobile populations around the world. 
For example, there may be individuals who maintain one or more Facebook accounts in violation of our terms of service, 
despite our efforts to detect and suppress such behavior. We estimate, for example, that “duplicate” accounts (an account 
that a user maintains in addition to his or her principal account) may have represented between approximately 4.3% and 
7.9% of our worldwide MAUs in 2013. We also seek to identify “false” accounts, which we divide into two categories: (1) 
user-misclassified accounts, where users have created personal profiles for a business, organization, or non-human entity 
such as a pet (such entities are permitted on Facebook using a Page rather than a personal profile under our terms of 
service); and (2) undesirable accounts, which represent user profiles that we determine are intended to be used for purposes 
that violate our terms of service, such as spamming. In 2013, for example, we estimate user-misclassified accounts may 
have represented between approximately 0.8% and 2.1% of our worldwide MAUs and undesirable accounts may have 
represented between approximately 0.4% and 1.2% of our worldwide MAUs. We believe the percentage of accounts that are 
duplicate or false is meaningfully lower in developed markets such as the United States or the United Kingdom and higher in 
developing markets such as India and Turkey. However, these estimates are based on an internal review of a limited sample 
of accounts and we apply significant judgment in making this determination, such as identifying names that appear to be fake 
or other behavior that appears inauthentic to the reviewers. As such, our estimation of duplicate or false accounts may not 
accurately represent the actual number of such accounts. We are continually seeking to improve our ability to identify 
duplicate or false accounts and estimate the total number of such accounts, and such estimates may be affected by 
improvements or changes in our methodology. Due to inherent variability in such estimates at particular dates of 
measurement, we disclose these estimates as a range over a recent period. 
24
Limitations of Key Metrics and Other Data (cont.) 
Our data limitations may affect our understanding of certain details of our business. For example, while user-provided data indicates a 
decline in usage among younger users, this age data is unreliable because a disproportionate number of our younger users register 
with an inaccurate age. Accordingly, our understanding of usage by age group may not be complete. 
Some of our metrics have also been affected by applications on certain mobile devices that automatically contact our servers for regular 
updates with no user action involved, and this activity can cause our system to count the user associated with such a device as an 
active user on the day such contact occurs. For example, we estimate that less than 5% of our estimated worldwide DAUs as of 
December 31, 2011 resulted from this type of automatic mobile activity, and that this type of activity had a substantially smaller effect on 
our estimate of worldwide MAUs and mobile MAUs. The impact of this automatic activity on our metrics varies by geography because 
mobile usage varies in different regions of the world. In addition, our data regarding the geographic location of our users is estimated 
based on a number of factors, such as the user’s IP address and self-disclosed location. These factors may not always accurately 
reflect the user’s actual location. For example, a mobile-only user may appear to be accessing Facebook from the location of the proxy 
server that the user connects to rather than from the user’s actual location. The methodologies used to measure user metrics may also 
be susceptible to algorithm or other technical errors. For example, in early June 2012, we discovered an error in the algorithm we used 
to estimate the geographic location of our users that affected our attribution of certain user locations for the period ended March 31, 
2012. While this issue did not affect our overall worldwide DAU and MAU numbers, it did affect our attribution of users across different 
geographic regions. We estimate that the number of MAUs as of March 31, 2012 for the United States & Canada region was overstated 
as a result of the error by approximately 3% and this overstatement was offset by understatements in other regions. The number of such 
users for the period ended March 31, 2012 presented herein reflect the reclassification to more correctly attribute users by geographic 
region. Our estimates for revenue by user location are also affected by these factors. 
We regularly review our processes for calculating these metrics, and from time to time we may make adjustments to improve their 
accuracy. These adjustments may result in the recalculation of our historical metrics, which are immaterial unless otherwise noted. In 
addition, our MAU and DAU estimates will differ from estimates published by third parties due to differences in methodology. For 
example, some third parties are not able to accurately measure mobile users or do not count mobile users for certain user groups or at 
all in their analyses. 
The numbers of DAUs, mobile DAUs, MAUs, mobile MAUs, and mobile-only MAUs represented in these slides, as well as ARPU, do 
not include users of Instagram unless they would otherwise qualify as such users, respectively, based on their other activities on 
Facebook. 
25
Facebook q314 earnings slides

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Facebook q314 earnings slides

  • 2. Non-GAAP Measures In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation of non-GAAP financial measures to the corresponding GAAP measures is provided in the appendix to this presentation. 2
  • 3. 665 699 728 757 180 195 208 216 802 829 864 233 244 256 In Millions Rest of World Asia Europe US & Canada 584 618 141 153 167 181 189 200 216 228 152 242 161 160 169 179 182 188 195 203 206 212 132 135 139 142 144 147 150 152 155 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 3 Daily Active Users (DAUs) DAUs / MAUs Q3'12 Q4'12 Q1'13 Q2'13 Q3’13 Q4'13 Q1'14 Q2'14 Q3'14 58% 59% 60% 61% 61% 62% 63% 63% 64% Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.
  • 4. 4 Mobile Daily Active Users (Mobile DAUs) In Millions 329 374 425 469 507 556 609 654 703 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.
  • 5. 1,110 1,155 1,189 1,228 1,276 1,317 1,350 288 304 327 346 362 376 395 411 423 1,007 1,056 277 298 319 339 351 368 390 410 426 253 261 269 272 276 282 289 292 296 189 193 195 198 199 201 202 204 206 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 5 Monthly Active Users (MAUs) In Millions Rest of World Asia Europe US & Canada Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.
  • 6. 6 Mobile Monthly Active Users (Mobile MAUs) In Millions 604 680 751 819 874 945 1,008 1,070 1,124 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.
  • 7. 7 Mobile-Only Monthly Active Users (Mobile-Only MAUs) In Millions 254 296 341 399 456 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Mobile-only MAUs are defined as users who accessed Facebook solely through mobile apps or mobile versions of our website, or used our Messenger app, in the last 30 days of the given quarter. The number of mobile-only MAUs do not include Instagram users unless they would otherwise qualify as such users based on their other activities on Facebook.
  • 8. Revenue In Millions Payments and other fees Advertising $1,086 * $1,329 $1,245 $1,599 $1,798 $2,344 $2,265 $2,676 $2,957 $176 $256 $213 $214 $218 $241 $237 $234 $246 $1,262 $1,585 $1,458 $1,813 $2,016 $2,585 $2,502 $2,910 $3,203 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 8 *In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of our Form 10-K filed on February 1, 2013.
  • 9. In Millions Rest of World Asia Europe US & Canada $341 $1,514 $637 $780 $679 $848 $962 $1,206 $1,179 $1,308 $440 $423 $505 $538 $727 $698 $824 $844 $154 $198 $197 $247 $278 $341 $354 $431 $492 $130 $167 $159 $213 $238 $311 $271 $347 $353 $1,262 $1,585 $1,458 $1,813 $2,016 $2,585 $2,502 $2,910 $3,203 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 9 Revenue by User Geography Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer.
  • 10. In Millions Rest of World Asia Europe US & Canada 10 Advertising Revenue by User Geography $295 $1,362 $538 $631 $552 Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer. $721 $832 $1,068 $1,039 $1,175 $374 $367 $451 $482 $658 $631 $757 $783 $133 $168 $176 $225 $255 $318 $333 $408 $469 $120 $156 $150 $202 $229 $300 $262 $336 $343 $1,086 $1,329 $1,245 $1,599 $1,798 $2,344 $2,265 $2,676 $2,957 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14
  • 11. In Millions Rest of World Asia Europe US & Canada $99 $149 $127 $127 $130 $138 $140 $133 $152 $46 $66 $56 $54 $56 $69 $67 $67 $61 $21 $30 $21 $22 $23 $23 $21 $23 $23 $10 $11 $9 $11 $9 $11 $9 $11 $10 $176 $256 $213 $214 $218 $241 $237 $234 $246 * Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 11 Payments & Other Fees Revenue by User Geography Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer. *In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of our Form 10-K filed on February 1, 2013.
  • 12. 12 Average Revenue per User (ARPU) Europe $1.76 Worldwide $2.36 $2.21 $2.61 $2.66 $0.20 $0.25 $0.23 $0.23 $0.21 $1.96 $2.61 $2.44 $2.84 $2.87 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Asia $0.74 $0.88 $0.88 US & Canada $1.02 $1.12 $0.07 $0.06 $0.06 $0.06 $0.06 $0.81 $0.95 $0.93 $1.08 $1.18 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Rest of World $0.65 $0.81 Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer. Please see Facebook’s most recent quarterly or annual report filed with the SEC for the definition of ARPU. $0.68 $0.83 $0.82 $0.03 $0.03 $0.02 $0.03 $0.02 $0.67 $0.84 $0.70 $0.86 $0.85 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 $1.53 $1.94 $1.81 $2.06 $2.22 $0.19 $0.20 $0.19 $0.18 $0.18 $1.72 $2.14 $2.00 $2.24 $2.40 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 $4.19 $5.34 $5.16 $5.79 $6.64 $0.65 $0.69 $0.69 $0.66 $0.74 $4.85 $6.03 $5.85 $6.44 $7.39 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Payments Advertising
  • 13. 13 Expenses as a % of Revenue Amortization of intangibles Cost of Revenue Marketing & Sales Share-based compensation + Payroll tax related to share-based compensation All other expenses 12% 11% 13% 12% 12% 10% 10% 11% 10% 10% Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Research & Development 18% 9% 16% 7% 18% 17% 8% 8% 19% 8% 9% 9% 10% 9% 11% Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 General & Administrative 8% 10% 7% 7% 8% 6% 5% 5% 5% 6% Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 24% 18% 18% 15% 16% 25% 19% 18% 16% 18% Q3'13 Q4'13 Q1'14 Q2'14 Q3'14
  • 14. Income from Operations GAAP Income from Operations (In Millions) $373 $562 $736 $1,133 $1,075 $1,390 $1,397 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Non-GAAP Income from Operations (In Millions) $596 $830 $1,024 $1,498 $1,415 $1,753 $1,820 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 14 Non-GAAP income from operations excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and amortization of intangibles—see the Appendix for a reconciliation of this non-GAAP measure to GAAP income from operations.
  • 15. 15 Operating Margin GAAP Operating Margin 26% 31% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Non-GAAP Operating Margin 37% 41% 46% 51% 44% 43% 48% 44% 58% 57% 60% 57% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Non-GAAP operating margin excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and amortization of intangibles—see the Appendix for a reconciliation of this non-GAAP measure to GAAP operating margin.
  • 16. 16 Effective Tax Rate GAAP Effective Tax Rate Non-GAAP Effective Tax Rate Q1 Q2 Q3 Q4 Q1 Q2 Q3 ($ in millions) 2013 2013 2013 2013 2014 2014 2014 GAAP income before provision for income taxes $ 353 $ 545 $ 726 $ 1,130 $ 1,075 $ 1,386 $ 1,336 GAAP provision for income taxes 134 212 301 607 433 595 530 Effective Tax Rate 38% 39% 41% 54% 40% 43% 40% Q1 Q2 Q3 Q4 Q1 Q2 Q3 ($ in millions) 2013 2013 2013 2013 2014 2014 2014 Non-GAAP income before provision for income taxes 576 813 1,014 1,495 1,415 1,749 1,759 Non-GAAP provision for income taxes 241 294 348 681 489 627 610 Effective Tax Rate 42% 36% 34% 46% 35% 36% 35%
  • 17. 17 Net Income GAAP Net Income (In Millions) $219 $333 $425 $523 $642 $791 $806 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Non-GAAP Net Income (In Millions) $335 $519 $666 $814 $926 Non-GAAP net income excludes share-based compensation expense, payroll tax expenses related to share-based compensation, related income tax adjustments, and amortization of intangibles—see the Appendix for a reconciliation of this non-GAAP measure to GAAP net income. $1,121 $1,149 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14
  • 18. 18 Diluted Earnings Per Share GAAP Diluted Earnings Per Share $0.09 $0.13 $0.17 $0.20 $0.25 $0.30 $0.30 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Non-GAAP Diluted Earnings Per Share $0.13 $0.21 $0.27 $0.32 $0.35 $0.43 $0.43 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Non-GAAP diluted earnings per share excludes share-based compensation expense, payroll tax expenses related to share-based compensation, related income tax adjustments, and amortization of intangibles—see the Appendix for a reconciliation of this non-GAAP measure to GAAP diluted earnings per share.
  • 19. 19 Capital Investments In Millions Property and equipment acquired under capital leases Purchases of property and equipment $606 $1,235 $1,362 $473 $340 $1,079 $1,575 $1,373 2011 2012 2013 Annual $879 $1,314 $890 $1,314 YTD Q3'13 YTD Q3'14 Quarterly
  • 21. 21 Reconciliations Income from Operations (in millions) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 GAAP income from operations $ 373 $ 562 $ 736 $ 1,133 $ 1,075 $ 1,390 $ 1,397 Share-based compensation expense 170 224 239 273 274 314 353 Payroll tax expenses related to share-based compensation 20 8 12 53 25 8 11 Amortization of intangible assets 33 36 37 39 41 41 59 Non-GAAP income from operations $ 596 $ 830 $ 1,024 $ 1,498 $ 1,415 $ 1,753 $ 1,820 Operating Margin Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 GAAP operating margin 26% 31% 37% 44% 43% 48% 44% Share-based compensation expense 12% 12% 12% 11% 11% 11% 11% Payroll tax expenses related to share-based compensation 1% 0% 1% 2% 1% 0% 0% Amortization of intangible assets 2% 2% 2% 2% 2% 1% 2% Non-GAAP operating margin 41% 46% 51% 58% 57% 60% 57% Net Income (in millions) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 GAAP net income $ 219 $ 333 $ 425 $ 523 $ 642 $ 791 $ 806 Share-based compensation expense 170 224 239 273 274 314 353 Payroll tax expenses related to share-based compensation 20 8 12 53 25 8 11 Amortization of intangible assets 33 36 37 39 41 41 59 Income tax adjustments (107) (82) (47) (74) (56) (33) (80) Non-GAAP net income $ 335 $ 519 $ 666 $ 814 $ 926 $ 1,121 $ 1,149 Diluted Earnings Per Share Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 GAAP diluted earnings per share $ 0.09 $ 0.13 $ 0.17 $ 0.20 $ 0.25 $ 0.30 $ 0.30 Non-GAAP adjustments to net income 0.04 0.08 0.10 0.12 0.10 0.13 0.13 Non-GAAP adjustments to diluted shares - - - - - - - Non-GAAP diluted earnings per share $ 0.13 $ 0.21 $ 0.27 $ 0.32 $ 0.35 $ 0.43 $ 0.43
  • 22. Effective Tax Rate (in millions) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 GAAP income before provision for income taxes $ 353 $ 545 $ 726 $ 1,130 $ 1,075 $ 1,386 $ 1,336 GAAP provision for income taxes 134 212 301 607 433 595 530 GAAP effective tax rate 38% 39% 41% 54% 40% 43% 40% GAAP income before provision for income taxes $ 353 $ 545 $ 726 $ 1,130 $ 1,075 $ 1,386 $ 1,336 Share-based compensation and related payroll tax expenses 190 232 251 326 299 322 364 Amortization of intangibles 33 36 37 39 41 41 59 Non-GAAP income before provision for income taxes $ 576 $ 813 $ 1,014 $ 1,495 $ 1,415 $ 1,749 $ 1,759 Non-GAAP provision for income taxes 241 294 348 681 489 627 610 Non-GAAP effective tax rate 42% 36% 34% 46% 35% 36% 35% 22 Reconciliations (continued)
  • 23. 23 Reconciliations (continued) Free Cash Flow (in millions) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Net cash provided by operating activities $ 719 $ 1,322 $ 950 $ 1,231 $ 1,285 $ 1,341 $ 1,248 Purchases of property and equipment 327 268 284 483 363 469 482 Property and equpiment acquired under capital leases 11 - - - - - - Free Cash Flow $ 381 $ 1,054 $ 666 $ 748 $ 922 $ 872 $ 766
  • 24. Limitations of Key Metrics and Other Data The numbers for our key metrics, which include our daily active users (DAUs), mobile DAUs, monthly active users (MAUs), mobile MAUs, and average revenue per user (ARPU), as well as certain other metrics such as mobile-only MAUs, are calculated using internal company data based on the activity of user accounts. While these numbers are based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring usage of our products across large online and mobile populations around the world. For example, there may be individuals who maintain one or more Facebook accounts in violation of our terms of service, despite our efforts to detect and suppress such behavior. We estimate, for example, that “duplicate” accounts (an account that a user maintains in addition to his or her principal account) may have represented between approximately 4.3% and 7.9% of our worldwide MAUs in 2013. We also seek to identify “false” accounts, which we divide into two categories: (1) user-misclassified accounts, where users have created personal profiles for a business, organization, or non-human entity such as a pet (such entities are permitted on Facebook using a Page rather than a personal profile under our terms of service); and (2) undesirable accounts, which represent user profiles that we determine are intended to be used for purposes that violate our terms of service, such as spamming. In 2013, for example, we estimate user-misclassified accounts may have represented between approximately 0.8% and 2.1% of our worldwide MAUs and undesirable accounts may have represented between approximately 0.4% and 1.2% of our worldwide MAUs. We believe the percentage of accounts that are duplicate or false is meaningfully lower in developed markets such as the United States or the United Kingdom and higher in developing markets such as India and Turkey. However, these estimates are based on an internal review of a limited sample of accounts and we apply significant judgment in making this determination, such as identifying names that appear to be fake or other behavior that appears inauthentic to the reviewers. As such, our estimation of duplicate or false accounts may not accurately represent the actual number of such accounts. We are continually seeking to improve our ability to identify duplicate or false accounts and estimate the total number of such accounts, and such estimates may be affected by improvements or changes in our methodology. Due to inherent variability in such estimates at particular dates of measurement, we disclose these estimates as a range over a recent period. 24
  • 25. Limitations of Key Metrics and Other Data (cont.) Our data limitations may affect our understanding of certain details of our business. For example, while user-provided data indicates a decline in usage among younger users, this age data is unreliable because a disproportionate number of our younger users register with an inaccurate age. Accordingly, our understanding of usage by age group may not be complete. Some of our metrics have also been affected by applications on certain mobile devices that automatically contact our servers for regular updates with no user action involved, and this activity can cause our system to count the user associated with such a device as an active user on the day such contact occurs. For example, we estimate that less than 5% of our estimated worldwide DAUs as of December 31, 2011 resulted from this type of automatic mobile activity, and that this type of activity had a substantially smaller effect on our estimate of worldwide MAUs and mobile MAUs. The impact of this automatic activity on our metrics varies by geography because mobile usage varies in different regions of the world. In addition, our data regarding the geographic location of our users is estimated based on a number of factors, such as the user’s IP address and self-disclosed location. These factors may not always accurately reflect the user’s actual location. For example, a mobile-only user may appear to be accessing Facebook from the location of the proxy server that the user connects to rather than from the user’s actual location. The methodologies used to measure user metrics may also be susceptible to algorithm or other technical errors. For example, in early June 2012, we discovered an error in the algorithm we used to estimate the geographic location of our users that affected our attribution of certain user locations for the period ended March 31, 2012. While this issue did not affect our overall worldwide DAU and MAU numbers, it did affect our attribution of users across different geographic regions. We estimate that the number of MAUs as of March 31, 2012 for the United States & Canada region was overstated as a result of the error by approximately 3% and this overstatement was offset by understatements in other regions. The number of such users for the period ended March 31, 2012 presented herein reflect the reclassification to more correctly attribute users by geographic region. Our estimates for revenue by user location are also affected by these factors. We regularly review our processes for calculating these metrics, and from time to time we may make adjustments to improve their accuracy. These adjustments may result in the recalculation of our historical metrics, which are immaterial unless otherwise noted. In addition, our MAU and DAU estimates will differ from estimates published by third parties due to differences in methodology. For example, some third parties are not able to accurately measure mobile users or do not count mobile users for certain user groups or at all in their analyses. The numbers of DAUs, mobile DAUs, MAUs, mobile MAUs, and mobile-only MAUs represented in these slides, as well as ARPU, do not include users of Instagram unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook. 25