Everything You Need to Know About Facebook’s Q4 and Full-Year 2015 Results

Mobile continued to increase its share of the Facebook revenue pie, accounting for 80 percent of the company’s total advertising revenue in the fourth quarter of 2015, up from 69 percent in the fourth quarter of 2014.

Mobile continued to increase its share of the Facebook revenue pie, accounting for 80 percent of the company’s total advertising revenue in the fourth quarter of 2015, up from 69 percent in the fourth quarter of 2014.

Facebook reported its financial results for the fourth quarter of 2015 and the full year after market close Wednesday, and highlights included:

  • Revenue: $5.841 billion, up 51.7 percent from $3.851 billion in the previous-year period. For the full year, revenue of $17.928 billion was up 43.8 percent from $12.466 billion in 2014.
  • Net income: Facebook reported GAAP (generally accepted accounting principles) net income of $1.562 billion in the fourth quarter, up 122.8 percent from $701 million in the same period of 2014, and $3.688 billion for full-year 2015, up 25.4 percent from the 2014 total of $2.94 billion.
  • Earnings per share: GAAP EPS of $0.54 in the fourth quarter was up 116 percent from $0.25 in the year-earlier quarter, while for the full year, GAAP EPS rose 17.2 percent, to $1.29 from $1.10.
  • Monthly active users: Facebook reached 1.591 billion MAUs at the end of 2015, up just under 3 percent from 1.545 billion at the end of the third quarter and up 14.2 percent from 1.393 billion at year-end 2014.
  • Mobile MAUs: The social network reported 1.442 mobile MAUs, up 4.1 percent from 1.385 billion in the previous quarter and up 21.3 percent from 1.189 billion at the end of 2014.
  • Mobile-only MAUs: 823 million, up 13.2 percent from 727 million at the end of the third quarter of 2015 and up 56.5 percent from 526 million at the end of 2014.
  • Daily active users: 1.038 billion at the end of 2015, up 3.1 percent from 1.007 billion at the end of the prior quarter and up 16.6 percent from the year-end 2014 total of 890 million.

4Q2015Revenue 4Q2015RevenueGeography 4Q2015AdRevenueGeography 4Q2015ARPU 4Q2015NetIncome 4Q2015MAU 4Q2015MobileMAU 4Q2015MobileOnlyMAU 4Q2015DAU 4Q2015MobileDAU

The social network also announced the following milestones that were achieved during 2015:

4Q2015Milestones 4Q2015Groups

Highlights follow from Facebook’s earnings call, which took place after market close Wednesday.

On advertising in general, chief operating officer Sheryl Sandberg said during her opening remarks:

Last quarter, we announced that we had over 2.5 million active advertisers, and since then, our growth has remained strong. This represents a small fraction of the over 50 million small businesses now actively using pages. So we see a big opportunity to continue to grow the number of Facebook advertisers going forward. We’re also very pleased with the growth in advertiser adoption of Instagram and the positive results advertisers are seeing from their investments. 98 of the top 100 advertisers on Facebook also advertised on Instagram in the fourth quarter.

The ad load on Facebook and Instagram came up frequently during the question-and-answer part of the call, with JPMorgan Securities analyst Douglas Anmuth asking:

On the ad load, a few years ago, you talked about ad load at mid-single-digit levels, and then more recently, it is up significantly since then. Do you still feel like there is still significant room to increase ad load here, and how do you think about the theoretical ceiling there?

Chief financial officer David Wehner replied:

Ad load is definitely up significantly from where we were a couple of years ago. And as I mentioned, it’s one of the factors driving an increasing inventory. Really one thing to kind of think about here is that improving the quality and the relevance of the ads has enabled us to show more of them without harming the experience, and our focus really remains on the experience. So we’ll continue to monitor engagement and sentiment very carefully. I mentioned that we expect the factors that drove the performance in 2015 to continue to drive the performance in 2016. So, I think that’s the color I can give on ad loads.

And in response to a question from UBS Securities analyst Eric Sheridan regarding Instagram, Sandberg said:

When we introduce ads into feed and continue to increase the ad load, we monitor it really carefully. We’re looking at user engagement on the platform. We also look at the quality of ads. And our basic belief is that if we have high-quality ads, they create a good consumer experience, and we can look at what consumers are doing because we can understand how actively engaged they are on the platform. For Instagram, we don’t break out revenue, but we’re pleased with the growth on Instagram. And as I mentioned, 98 of our top 100 advertisers in Facebook are now advertising on Instagram. It’s also the case that Facebook had remarkably strong growth, as well. So, we’re seeing strong growth across those platforms.

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