Facebook earnings report was very strong, as the company once again executed very well.
The company post $26B in quarterly sales and is now has a $104B annualized revenue run-rate. This is something that we hypothesized three years ago, yet we estimated it would take five years.
Despite this milestone, the future is stronger today with virtual and augmented reality and social commerce as new viable revenue segments. In addition, Facebook finished the quarter with 43% margins and $64B in cash, leaving them plenty of room to execute.
Growth
– $26B in sales, +48% y/y. Other revenue saw $1.6B over the last two quarters (key)
– 3.45B family users are on the platform today, +15% y/y
– $104B annual revenue run rate.
– Management called out commerce, virtual and augmented reality priorities.
Margins
– 43% operating margins (strong)
– $64B in cash and $573M in debt (incredible)
I continue to believe that Facebook is well-positioned to empower multiple constituents in the digital world. With over 200M small businesses and over 3B users, the network effects are powerful. Instagram is slowly becoming a platform of choice for online shopping, while Oculus is starting to see traction in its virtual reality ecosystem.
Twitter: @_SeanDavid
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