Facebook Inc (FB) reported Q4 2015 revenues of $5.84b (vs. Street estimates of $5.36b) for growth of 52% YoY (60% YoY excl. FX). Advertising: Revenue was $5.64b for growth of 57% YoY (66% excl. FX – an acceleration from 57% in Q3). In Q4, mobile advertising revenue represented approx. 80% of total advertising revs, up from 78% in Q3 2015 & 69% in Q4 2014. Payments: Revenue was $204mm, a 21% decrease YoY. Adj. EBITD was $3.88b (vs. Street of $3.41b) for 66.3% margin (vs. Street 63.6%). Adj. EPS was $0.79 (vs. Street of $0.68). Investors were giddy about the results and shares soared 12.12% to $94.45 in after hours trading.
Mark Zuckerberg noted on the Facebook conference call:
Overall, Q4 was a strong quarter and a great end to the year. More than 1.59 billion people now use Facebook each month and 1.04 billion every day. Our growth of nearly 200 million people monthly and 148 million people daily this year. More than 1.44 billion people use Facebook on mobile devices.
And, when it comes to our business, we’re also pleased with our continued growth. Total revenue grew by 52% year-over-year to more than $5.8 billion, and advertising revenues grew by 57% to reach more than $5.6 billion.
Analysts were also impressed with Facebook results.
Facebook reported strong 4Q results, driven by better-than expected user growth and an acceleration in monetization, boosted by increased ad load, more video, and Instagram. Impressively, ad revenue accelerated to +66% Y/Y (ex FX), up from +57% Y/Y in 3Q:15, and mobile ad revenue accelerated to +82% Y/Y (from +72%). Given the robust quarter and a continuation of favorable trends into FY:16, we’re reiterating our BUY rating and raising our estimates/PT to $140 from $130. FB remains a top pick for us given, 1) its position as the largest/most engaging Internet platform, offering personalized marketing at scale; 2) the massive video viewing shift from TV to online, 3) migration of ad$ to mobile/social, and 4) yet untapped monetization potential for WhatsApp, Messenger, and Oculus.
Social boom, led by Facebook, has dominated the global internet space for the past few years. Facebook has successfully integrated its ad business model into its social platform by better targeting (i.e., good ROI for business) and turning the ads into contents for consumers (i.e., good user experience for consumers). Facebook’s market cap is up c.230% since its IPO. We now focus on the mobile messengers for the following reasons: (1) Consumers’ #1 activity on mobile is messaging, taking up 25~50% of time spent share across the regions; (2) Messengers are transforming into platforms and we have seen some success stories in monetisation of mobile gaming and digital contents; (3) Messengers are currently building up ecosystem linking users and businesses, facilitating ‘discovery’ and convenience for the two parties; we see substantial potential in mobile ads/O2O commerce for the major mobile messengers.
Global MAUs were up 14% YoY to 1.59b – in line with our est. of 1.59b. Global DAUs were up 17% YoY to 1.04b, above our est. of 1.03b. Mobile DAUs increased 25% YoY (to 934mm) slightly below the +27% YoY growth shown in the prior quarter. Mobile MAUs were up 21% YoY to 1.44b (vs. +23% YoY in Q3 2015)