Archive for February, 2012

Facebook IPO: The things you can learn!

Wednesday, February 8th, 2012

SELECTED CONSOLIDATED FINANCIAL DATA

 

The consolidated statements of income data for each of the years ended December 31, 2009, 2010, and 2011 and the consolidated balance sheets data as of December 31, 2010 and 2011 are derived from our audited consolidated financial statements that are included elsewhere in this prospectus. The consolidated statements of operations data for the years ended December 31, 2007 and 2008 and the consolidated balance sheets data as of December 31, 2007, 2008, and 2009 are derived from audited consolidated financial statements that are not included in this prospectus.

 

You should read this information together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus.

 

     Year Ended December 31,  
   2007     2008     2009      2010      2011  
     (in millions, except per share data)  
Consolidated Statements of Operations Data:             
Revenue    $ 153      $ 272      $ 777       $ 1,974       $ 3,711   
Costs and expenses(1) :             
Cost of revenue      41        124        223         493         860   
Marketing and sales      32        76        115         184         427   
Research and development      81        47        87         144         388   
General and administrative      123        80        90         121         280   
Total costs and expenses      277        327        515         942         1,955   
Income (loss) from operations      (124     (55     262         1,032         1,756   
Other expense, net      11        1        8         24         61   
Income (loss) before provision for income taxes      (135     (56     254         1,008         1695   
Provision for income taxes      3               25         402         695   
Net income (loss)    $ (138   $ (56   $ 229       $ 606       $ 1,000   
Net income (loss) attributable to Class A and Class B common stockholders    $ (138   $ (56   $ 122       $ 372       $ 668   
Earnings (loss) per share attributable to Class A and Class B common stockholders(2):             
Basic    $ (0.16   $ (0.06   $ 0.12       $ 0.34       $ 0.52   
Diluted    $ (0.16   $ (0.06   $ 0.10       $ 0.28       $ 0.46   
Pro forma earnings per share attributable to Class A and Class B common stockholders(2):             
Basic              $ 0.49   
Diluted              $ 0.43   

 

(1)  

Costs and expenses include share-based compensation expense as follows:

 

     Year Ended December 31,  
       2007          2008          2009          2010          2011    
     (in millions)  
Cost of revenue    $ 1       $       $       $       $ 9   
Marketing and sales      3         4         2         2         43   
Research and development      56         7         6         9         114   
General and administrative      13         19         19         9         51   
Total share-based compensation expense    $   73       $   30       $   27       $   20       $ 217   

 

(2)  

See note 2 of the notes to our consolidated financial statements for a description of how we compute basic and diluted earnings (loss) per share attributable to Class A and Class B common stockholders and pro forma basic and diluted earnings per share attributable to Class A and Class B common stockholders.

As you can see, Facebook was losing TONS of money until in 2007 and 2008, and it wasn’t until 2009 that revenue overtook expenses. Think about that, a company started in 2004, losing millions of dollars a year, and not until 2009 was it profitable. 5 years of just spending money, 5 years of justifying the lack of revenue and the costs of everything. 5 years of, “Yeah, we’ve been losing a lot of money, but you should still invest in us”.

Another interesting thing to look at is the MAU graph, it details out what Facebook has been doing since 2004, and how many users they have obtained through that time:

 

I just find it AMAZING how much information is being provided as a by-product of Facebook going public.

The link to Facebook’s Registration Statement can be found here: http://www.sec.gov/Archives/edgar/data/1326801/000119312512034517/d287954ds1.htm#toc287954_2