April 22, 2015 Last Updated 3:32 pm

Facebook reports revenue up 42% to $3.54 billion, income dips on higher expenses

The world’s largest social media company, Facebook, today reported that its revenue grew 42 percent in the first quarter of 2015. Net income, however, disappointed, driving down the stock slightly in after hours trading.

Facebook CEO doesn’t sound like he finds these earnings reports very interesting anymore, not even trying to come up with an interesting quote for the earnings press release.

“This was a strong start to the year,” said Mark Zuckerberg, Facebook founder and CEO. “We continue to focus on serving our community and connecting the world.”

OK, that was deep. And that was it, the complete comments (not counting the investor conference call, of course).

BusinessInsider says “Facebook drops on light revenue” – yeah, $3.54 billion, 42 percent growth in revenue is “light” (by way of comparison, The New York Times Co. reported $1.59 billion in revenue… for all of 2014). I think they realized how silly that sounded and revised the heading to “Facebook drops after light revenue, but engagement keeps rising.” Nice try.

There highlights from the Q1 earnings report:

Revenue – Revenue for the first quarter of 2015 totaled $3.54 billion, an increase of 42%, compared with $2.50 billion in the first quarter of 2014. Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have increased by 49%.

  • Revenue from advertising was $3.32 billion, a 46% increase from the same quarter last year. Excluding the impact of year-over-year changes in foreign exchange rates, revenue from advertising would have increased by 55%.
  • Mobile advertising revenue represented approximately 73% of advertising revenue for the first quarter of 2015, up from approximately 59% of advertising revenue in the first quarter of 2014.
  • Payments and other fees revenue was $226 million, a 5% decrease from the same quarter last year

Costs and expenses – GAAP costs and expenses for the first quarter of 2015 were $2.61 billion, an increase of 83% from the first quarter of 2014. Non-GAAP costs and expenses were $1.70 billion in the first quarter of 2015, up 57% compared to $1.09 billion for the first quarter of 2014.

Income from operations – GAAP income from operations for the first quarter of 2015 was $933 million, a 13% decrease compared to $1.08 billion for the first quarter of 2014. Non-GAAP income from operations for the first quarter of 2015 was $1.84 billion, up 30% compared to $1.42 billion for the first quarter of 2014.

Operating margin – GAAP operating margin was 26% for the first quarter of 2015, compared to 43% in the first quarter of 2014. Non-GAAP operating margin was 52% for the first quarter of 2015, compared to 57% for the first quarter of 2014.

Provision for income taxes – GAAP income tax expense for the first quarter of 2015 was $420 million, representing a 45% effective tax rate. Non-GAAP effective tax rate would have been approximately 35%.

Net income and EPS – GAAP net income for the first quarter of 2015 was $512 million, down 20% compared to $642 million for the first quarter of 2014. Non-GAAP net income for the first quarter of 2015 was $1.19 billion, up 28% compared to $926 million for the first quarter of 2014. GAAP diluted EPS was $0.18 in the first quarter of 2015, down 28% compared to $0.25 in the first quarter of 2014. Non-GAAP diluted EPS for the first quarter of 2015 was $0.42, up 20% compared to $0.35 in the first quarter of 2014.

Facebook-Q1-2015

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