Facebook Earnings Beat PLUS Updated Valuation!

So I thought we'd just start off by going through some of the highlights of their press release.

So we'll start off with earnings per share.

They came in with earnings per share for the quarter of a dollar and 76 cents, which beat expectations by quite a lot actually.

Their expectation was a dollar and 47, so that's quite a big beat in terms of EPS.

Uh, when it came to revenue, there was a revenue miss.

Revenue came in at 13.73 billion when they were expected to do 13.78 billion, um, and that represents 30% year-over-year growth.

So even though they missed, they still grew 30% year over year.

And I just forgot to mention that that earnings per share, uh, of a dollar 76 represents 11% year-over-year growth.

So you can see that revenue is still growing really strong, but that earnings per share and the net income is starting to grow a lot slower because of these increased costs, and we'll talk about that a little bit later.

Investors also like to look at the daily active users and the monthly active users as a bit of an indication of how the platform is going.

In terms of daily active users, they came in at 1.49 billion, uh, compared to one point, uh, five one billion, which was expected.

Uh, monthly active users was 2.27 billion compared to 2.29 billion, which was expected.

So they missed on both of those, but not by a lot.

It still blows me away that Facebook has so many people on their platform.

Another stat that just blew me away was that 2.6 billion people use at least one of their platforms, so whether that's the Facebook platform, the Messenger platform, Instagram, WhatsApp, one of their platforms.

2.6 billion people, and that represents 34% of the entire world population, which is pretty insane.

That blew me away that they've got so many people on their platforms.

And lastly, another key area that investors like to look at is the revenue generated by each user because it's great that they have billions of people on their platform, but how much money are each of those people, uh, providing for the platform in terms of advertising revenue, uh, from companies advertising in front of the audience? Um, and Facebook has a average revenue per user of $6 and 9 cents, which was exactly what was expected.

But of course, uh, since investors expected that there would be slightly more users, that- that's why they missed on revenue because they were in line with the revenue per user, but they missed on the number of users on their platform.

So then I just wanted to talk about one of the negative things that came out of this.

There was a few negative things, but this was one of the main ones for me at least, uh, and that was capital expenditure because this eats into free cash flow.

And capital expenditure, they said that in 2019, next year, financial year, um, there's gonna be capital expenditure of about $18 to $20 billion, which was higher than expected.

Um, and everyone knows why-

So I thought we'd just start off by going through some of the highlights of their press release.

So we'll start off with earnings per share.

They came in with earnings per share for the quarter of a dollar and 76 cents, which beat expectations by quite a lot actually.

Their expectation was a dollar and 47, so that's quite a big beat in terms of EPS.

Uh, when it came to revenue, there was a revenue miss.

Revenue came in at 13.73 billion when they were expected to do 13.78 billion, um, and that represents 30% year-over-year growth.

So even though they missed, they still grew 30% year over year.

And I just forgot to mention that that earnings per share, uh, of a dollar 76 represents 11% year-over-year growth.

So you can see that revenue is still growing really strong, but that earnings per share and the net income is starting to grow a lot slower because of these increased costs, and we'll talk about that a little bit later.

Investors also like to look at the daily active users and the monthly active users as a bit of an indication of how the platform is going.

In terms of daily active users, they came in at 1.49 billion, uh, compared to one point, uh, five one billion, which was expected.

Uh, monthly active users was 2.27 billion compared to 2.29 billion, which was expected.

So they missed on both of those, but not by a lot.

It still blows me away that Facebook has so many people on their platform.

Another stat that just blew me away was that 2.6 billion people use at least one of their platforms, so whether that's the Facebook platform, the Messenger platform, Instagram, WhatsApp, one of their platforms.

2.6 billion people, and that represents 34% of the entire world population, which is pretty insane.

That blew me away that they've got so many people on their platforms.

And lastly, another key area that investors like to look at is the revenue generated by each user because it's great that they have billions of people on their platform, but how much money are each of those people, uh, providing for the platform in terms of advertising revenue, uh, from companies advertising in front of the audience? Um, and Facebook has a average revenue per user of $6 and 9 cents, which was exactly what was expected.

But of course, uh, since investors expected that there would be slightly more users, that- that's why they missed on revenue because they were in line with the revenue per user, but they missed on the number of users on their platform.

So then I just wanted to talk about one of the negative things that came out of this.

There was a few negative things, but this was one of the main ones for me at least, uh, and that was capital expenditure because this eats into free cash flow.

And capital expenditure, they said that in 2019, next year, financial year, um, there's gonna be capital expenditure of about $18 to $20 billion, which was higher than expected.

Um, and everyone knows why-