The assumptions of a number of specialists were confirmed - the first financial report of Facebook as a public company, published on the night of July 26-27, 2012, did not cause a shock. However, it did disappoint a number of investors and analysts. In general, the impression can be characterized by the phrase "good, but not enough."
First unprofitable quarter in 2.5 years
Investors were unpleasantly surprised by a significant increase in the company's costs. And it's not just the colossal amount of compensation that Facebook paid its employees - $ 1.1 billion. Other expenses also increased significantly. For example, the company spent 7 times more money on launching new products than last year, and expenses on marketing and administrative needs quadrupled. In total, the cost is $ 1.93 billion, which is 4 times higher than in the second quarter of last year.
The company's revenue increased by almost a third and amounted to $ 1.18 billion. But the actual profit turned out to be significantly lower than expected - only 295 million (during the IPO, the figures sounded - 104 billion). And then, we can talk about profit only conditionally - except for the compensation paid to employees. And since they still need to be counted, only a bitter result remains: the company's net loss is 157 million US dollars.
Thus, in the period from April to June, for the first time in the last 2, 5 years, Facebook worked “in the red”. For comparison, the financial result of the second quarter of 2011 was a profit of $ 240 million.
No predictions for the future
Investors and analysts were also puzzled by the absence of any specific financial forecasts. And neither for the next reporting periods, nor in the long term. David Ebersman - CFO of Facebook - only said that revenue growth is extremely difficult to predict. This uncertainty does not add to the attractiveness of further investment.
According to a number of analysts, a few optimistic forecasts in the quarterly report would only benefit the company. Moreover, in general, Facebook is doing well. The number of social network users is growing, and people spend a lot of time on the site. The presence of advertising on the pages did not scare away visitors to the mobile versions of the site, namely, the monetization of mobile services was considered the main risk in the IPO of Facebook. Social advertising in the Sponsored Stories format allowed the company to receive 84% of revenue in the reporting quarter. And in the future, the company's management intends to develop this item of income.
So Facebook has a few months ahead of it to confirm its monetization success. And this means that even despite the declining share price, the newly announced public company has prospects.
