FacebookQ22017Results

investor.fb.com
 DailyActiveUsers(DAUs)
InMillions
RestofWorld 1,325
Asia-Pacific 1,284
1,227
Europe 1,179
US&Canada 1,128
1,090 419
1,038 408
1,007 388
968 377
355
340
308 319
292

427 453
368 396
329 346
300 309
285

249 252 256 262 267 271

228 233 240

164 167 169 173 175 178 180 182 183

Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

DAUs/MAUs
Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17
65% 65% 65% 66% 66% 66% 66% 66% 66%
PleaseseeFacebook'smostrecentquarterlyreportfiledwiththeSECfordefinitionsofuseractivityusedtodeterminethenumberofourDAUsand
MAUs.ThenumbersforDAUsandMAUsdonotincludeInstagram,WhatsApp,orOculususersunlesstheywouldotherwisequalifyassuchusers,
respectively,basedontheirotheractivitiesonFacebook.

2
 MonthlyActiveUsers(MAUs)
InMillions
2,006
RestofWorld 1,936
Asia-Pacific 1,860
Europe 1,788
US&Canada 1,712
1,654 654
1,591 632
1,545 606
1,490 587
556
533
509
492
471

716 756
629 673
566 592
522 540
496

333 338 342 349 354 360

311 315 323

213 217 219 222 226 229 231 234 236

Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

PleaseseeFacebook'smostrecentquarterlyreportfiledwiththeSECfordefinitionsofuseractivityusedtodeterminethenumberofourDAUsand
MAUs.ThenumbersforDAUsandMAUsdonotincludeInstagram,WhatsApp,orOculususersunlesstheywouldotherwisequalifyassuchusers,
respectively,basedontheirotheractivitiesonFacebook.

3
Revenue
InMillions

PaymentsandOtherFees $9,321
Advertising $8,809 $157
$180
$8,032
$175
$7,011
$6,436 $195
$5,841 $197
$204 $5,382
$181
$4,501
$9,164
$4,042 $202 $8,629
$215 $7,857
$6,816
$6,239
$5,637
$5,201
$4,299
$3,827

Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

4
 RevenuebyUserGeography
InMillions

RestofWorld $9,321
Asia-Pacific $8,809
Europe $954
$839 $8,032
US&Canada
$784 $1,569
$7,011 $1,349
$6,436 $692 $1,375
$5,841 $614
$5,382 $1,154 $2,065 $2,242
$550
$473 $1,025
$4,501 $848 $1,905
$4,042 $862 $1,605
$451
$415 $1,585
$709 $1,456
$623 $1,307
$1,085
$1,037
$4,556 $4,556
$3,968
$3,560
$2,987 $3,212
$2,740
$1,967 $2,256

Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Revenuebyusergeographyisgeographicallyapportionedbasedonourestimationofthegeographiclocationofouruserswhentheyperformarevenue-
generatingactivity.Thisallocationdiffersfromourrevenuebygeographydisclosureinourcondensedconsolidatedfinancialstatementswhererevenueis
geographicallyapportionedbasedonthelocationofthemarketerordeveloper.Inlate2015,wediscoveredanerrorinthealgorithmweusedtoattribute
ourrevenuebyusergeography.Whilethisissuedidnotaffectouroverallworldwiderevenue,itdidaffectourattributionofrevenuetodifferentgeographic
regions.Thefourthquarterof2015revenuebyusergeographyforallregionswasadjustedtoreflectthisreclassification.
5
 AdvertisingRevenuebyUserGeography
InMillions
$9,164
RestofWorld
Asia-Pacific $8,629
$947
Europe $832 $7,857
US&Canada
$776 $1,558
$6,816 $1,337
$6,239 $685 $1,361
$5,637 $608
$5,201 $1,137 $2,025 $2,209
$544
$467 $1,009
$833 $1,869
$4,299
$849 $1,563
$3,827 $444
$1,545
$409 $694 $1,413
$605 $1,270
$1,041
$987 $4,435 $4,450
$3,851
$3,431
$2,847 $3,077
$2,615
$1,826 $2,120

Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Revenuebyusergeographyisgeographicallyapportionedbasedonourestimationofthegeographiclocationofouruserswhentheyperformarevenue-
generatingactivity.Thisallocationdiffersfromourrevenuebygeographydisclosureinourcondensedconsolidatedfinancialstatementswhererevenueis
geographicallyapportionedbasedonthelocationofthemarketerordeveloper.Inlate2015,wediscoveredanerrorinthealgorithmweusedtoattribute
ourrevenuebyusergeography.Whilethisissuedidnotaffectouroverallworldwiderevenue,itdidaffectourattributionofrevenuetodifferentgeographic
regions.Thefourthquarterof2015revenuebyusergeographyforallregionswasadjustedtoreflectthisreclassification.
6
 Payments&OtherFeesRevenuebyUserGeography
InMillions

RestofWorld
Asia-Pacific
Europe
US&Canada

$215
$6 $202 $204
$197 $195
$18 $7 $6
$6
$15 $15 $181 $7 $180 $175
$6 $16 $17 $7
$50 $13 $12 $8 $157
$44 $43 $14
$40 $42 $7
$37 $40 $11
$36
$33

$141 $136 $140 $135 $129

$125 $121 $117 $106

Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Revenuebyusergeographyisgeographicallyapportionedbasedonourestimationofthegeographiclocationofouruserswhentheyperformarevenue-
generatingactivity.Thisallocationdiffersfromourrevenuebygeographydisclosureinourcondensedconsolidatedfinancialstatementswhererevenueis
geographicallyapportionedbasedonthelocationofthemarketerordeveloper.Inlate2015,wediscoveredanerrorinthealgorithmweusedtoattribute
ourrevenuebyusergeography.Whilethisissuedidnotaffectouroverallworldwiderevenue,itdidaffectourattributionofrevenuetodifferentgeographic
regions.Thefourthquarterof2015revenuebyusergeographywasadjustedtoreflectthisreclassification.
7
 AverageRevenueperUser(ARPU)
PaymentsandOtherFees
Worldwide US & Canada
Advertising $19.81 $19.38
$0.53 $17.07 $0.45
$15.65 $0.50
$14.34 $0.57
$4.83 $4.73 $0.60
$4.01 $0.10 $4.23 $0.08
$3.82 $0.09 $19.28 $18.93
$0.12 $0.11 $16.56
$13.74 $15.08
$4.73 $4.14 $4.65
$3.71 $3.89

Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Europe $5.98 $6.28 Asia-Pacific Rest of World

$0.09
$0.12 $5.42
$4.72 $4.72 $0.10
$2.07 $2.13
$0.12 $0.12 $1.89 $1.98
$1.77 $0.02 $0.01 $1.48
$0.03 $0.02 $1.41
$6.19 $0.03
$1.13 $1.21 $1.27 $0.01
$5.86 $0.01
$5.32 $0.01 $0.01
$4.61 $4.60 $2.12 $0.01
$1.86 $2.05 $1.96
$1.74 $1.39 $1.47
$1.12 $1.20 $1.25

Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Revenuebyusergeographyisgeographicallyapportionedbasedonourestimationofthegeographiclocationofouruserswhentheyperformarevenue-generatingactivity.Thisallocationdiffersfrom
ourrevenuebygeographydisclosureinourcondensedconsolidatedfinancialstatementswhererevenueisgeographicallyapportionedbasedonthelocationofthemarketerordeveloper.Pleasesee
FacebooksmostrecentquarterlyreportfiledwiththeSECforthedefinitionofARPU.

8
 Expensesasa%ofRevenue
Cost of Revenue Research & Development

23% 22% 23% 21%

18%
14% 14% 12% 14% 13%

Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Marketing & Sales General & Administrative

14% 13% 13% 13% 12%

6% 6% 6% 8% 7%

Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Inthefourthquarterof2016,weelectedtoearlyadopttheFinancialAccountingStandardsBoard(FASB)'sAccountingStandardsUpdateNo.2016-09,
Compensation Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU2016-09).Assuch,quarterly
expensesforandfollowing2016includetheimpactofASU2016-09adoption.SeeASU2016-09AdoptionintheAppendixforadditionalinformation.

9
 IncomefromOperations
InMillions

$4,566
$4,401

$3,327
$3,117
$2,734
$2,560

$2,010

$1,459
$1,273

Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Inthefourthquarterof2016,weelectedtoearlyadoptASU2016-09.Assuch,quarterlyincomefromoperationsforandfollowing2016includethe
impactofASU2016-09adoption.SeeASU2016-09AdoptionintheAppendixforadditionalinformation.

10
 OperatingMargin

52%
47%
44% 44%
42% 41%
37%

31% 32%

Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Inthefourthquarterof2016,weelectedtoearlyadoptASU2016-09.Assuch,quarterlyoperatingmarginforandfollowing2016includetheimpactofASU
2016-09adoption.SeeASU2016-09AdoptionintheAppendixforadditionalinformation.

11
 EffectiveTaxRate
($inmillions) Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17
Incomebeforeprovisionforincometaxes $ 1,273 $ 1,432 $ 2,557 $ 2,066 $ 2,754 $ 3,164 $ 4,533 $ 3,408 $ 4,488
Provisionforincometaxes 554 536 995 328 471 537 965 344 594
Effective Tax Rate 44% 37% 39% 16% 17% 17% 21% 10% 13%

Inthefourthquarterof2016,weelectedtoearlyadoptASU2016-09.Assuch,quarterlyeffectivetaxratesforandfollowing2016includetheimpactof
ASU2016-09adoption.SeeASU2016-09AdoptionintheAppendixforadditionalinformation.

12
 NetIncome
InMillions

$3,894
$3,568

$3,064

$2,627

$2,283

$1,738
$1,562

$896
$719

Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Inthefourthquarterof2016,weelectedtoearlyadoptASU2016-09.Assuch,quarterlynetincomeforandfollowing2016includetheimpactofASU
2016-09adoption.SeeASU2016-09AdoptionintheAppendixforadditionalinformation.

13
 DilutedEarningsPerShare

$1.32
$1.21

$1.04

$0.90
$0.78

$0.60
$0.54

$0.31
$0.25

Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Inthefourthquarterof2016,weelectedtoearlyadoptASU2016-09.Assuch,quarterlydilutedearningspershareforandfollowing2016includethe
impactofASU2016-09adoption.SeeASU2016-09AdoptionintheAppendixforadditionalinformation.

14
 CapitalInvestments
InMillions

$4,491

$2,523

$1,444

$995

Q2'16 Q2'17 2015 2016

Quarterly Annual

Capitalinvestmentsforperiodspresentedwererelatedtopurchasesofpropertyandequipment.

15
Appendix
ASU2016-09Adoption
Inthefourthquarterof2016,weelectedtoearlyadoptASU2016-09whichaddresses,amongotheritems,theaccountingforincometaxesandforfeitures,andcashflowpresentationofshare-
basedcompensation.WewererequiredtoreflectanyadjustmentsasofJanuary1,2016,thebeginningoftheannualperiodthatincludedtheinterimperiodofadoption.Uponadoption,excess
taxbenefitsgeneratedwhenstockawardsvestorsettlewerenolongerrecognizedinequitybutwereinsteadrecognizedasareductiontoprovisionforincometaxes.Wealsoelectedtoaccount
forforfeituresastheyoccur,ratherthanestimateexpectedforfeitures.Cashflowsrelatedtoexcesstaxbenefitswererequiredtobepresentedasanoperatingactivityratherthanafinancing
activity.Weadoptedtheaspectsofthestandardaffectingthecashflowpresentationretrospectively,andaccordingly,cashflowsforandfollowing2016hadbeenreclassifiedtoreflecttheimpact
ofASU2016-09adoption.

TheadoptionofASU2016-09resultedin,amongotheritems,(i)netcumulative-effectadjustmentof$1.67billionincreasetoretainedearningsasofJanuary1,2016,(ii)reductiontoourprovision
forincometaxesof$214millionand$934million,mostlyrelatedtotherecognitionofexcesstaxbenefitsforthefourthquarterandfullyear2016,respectively,and(iii)adjustmentstoour
unauditedselectedquarterlydatapreviouslyreportedforfiscalyear2016asfollows:

March 31, 2016 June 30, 2016 September 30, 2016

($inmillions) As reported As adjusted As reported As adjusted As reported As adjusted
Consolidated Balance Sheets Data:
Otherassets $ 700 $ 886 $ 703 $ 935 $ 660 $ 990
Totalassets $ 52,075 $ 52,262 $ 55,739 $ 55,968 $ 59,674 $ 60,007
Otherliabilities $ 3,116 $ 1,867 $ 3,145 $ 2,170 $ 2,964 $ 2,290
Totalliabilities $ 4,925 $ 3,674 $ 5,356 $ 4,373 $ 5,559 $ 4,886
Commonstockandadditionalpaid-incapital $ 36,129 $ 35,673 $ 37,405 $ 36,494 $ 38,756 $ 37,391
Retainedearnings $ 11,297 $ 13,191 $ 13,352 $ 15,475 $ 15,731 $ 18,102

Three months ended Three months ended Three months ended

March 31, 2016 June 30, 2016 September 30, 2016
($inmillions,exceptpercentagesandpershareamounts) As reported As adjusted As reported As adjusted As reported As adjusted
Consolidated Statements of Income Data:
Share-basedcompensationincludedincostsandexpenses $ 747 $ 746 $ 805 $ 817 $ 819 $ 824
Totalcostsandexpenses $ 3,373 $ 3,372 $ 3,690 $ 3,702 $ 3,889 $ 3,894
Provisionforincometaxes $ 555 $ 328 $ 711 $ 471 $ 790 $ 537
Netincome $ 1,510 $ 1,738 $ 2,055 $ 2,283 $ 2,379 $ 2,627
Effective tax rate 27% 16% 26% 17% 25% 17%
BasicEPS $ 0.53 $ 0.61 $ 0.72 $ 0.80 $ 0.83 $ 0.91
DilutedEPS $ 0.52 $ 0.60 $ 0.71 $ 0.78 $ 0.82 $ 0.90
Dilutedweightedaveragesharesoutstanding 2,888 2,905 2,904 2,921 2,915 2,931

17
ASU2016-09Adoption(continued)
Three months ended Six months ended Nine months ended
March 31, 2016 June 30, 2016 September 30, 2016
($inmillions) As reported As adjusted As reported As adjusted As reported As adjusted
Consolidated Statements of Cash Flows Data:
Netcashprovidedbyoperatingactivities $ 2,983 $ 3,477 $ 6,181 $ 7,142 $ 9,758 $ 11,178
Netcashprovidedby(usedin)financingactivities $ 184 $ (310) $ 655 $ (306) $ 1,106 $ (314)

18
 FreeCashFlowReconciliation
($inmillions) Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17
Netcashprovidedbyoperatingactivities $ 2,266 $ 2,538 $ 3,393 $ 3,477 $ 3,665 $ 4,036 $ 4,930 $ 5,058 $ 5,360
Less:Purchasesofpropertyandequipment 549 780 692 1,132 995 1,095 1,269 1,271 1,444
FreeCashFlow $ 1,717 $ 1,758 $ 2,701 $ 2,345 $ 2,670 $ 2,941 $ 3,661 $ 3,787 $ 3,916

Inthefourthquarterof2016,weelectedtoearlyadoptASU2016-09.Quarterlynetcashprovidedbyoperatingactivitiesandfreecashflowsforall
periodspresentedwereadjustedtoreflecttheimpactoftheASU2016-09adoption.SeeASU2016-09AdoptioninthisAppendixforadditional
information.

FreeCashFlow(FCF)isanon-GAAPfinancialmeasurethathaslimitationsasananalyticaltool,andyoushouldnotconsideritinisolationorasa
substituteforanalysisofotherGAAPfinancialmeasures,suchasnetcashprovidedbyoperatingactivities.SomeofthelimitationsofFCFare:(i)FCF
doesnotreflectourfuturecontractualcommitments,and(ii)othercompaniesinourindustrypresentsimilarlytitledmeasuresdifferentlythanwedo,
limitingtheirusefulnessascomparativemeasures.
19
 LimitationsofKeyMetricsandOtherData

Thenumbersforourkeymetrics,whichincludeourdailyactiveusers(DAUs),monthlyactiveusers(MAUs),andaveragerevenueperuser(ARPU),arecalculatedusinginternal
companydatabasedontheactivityofuseraccounts.Whilethesenumbersarebasedonwhatwebelievetobereasonableestimatesofouruserbasefortheapplicableperiod
ofmeasurement,thereareinherentchallengesinmeasuringusageofourproductsacrosslargeonlineandmobilepopulationsaroundtheworld.Inaddition,wearecontinually
seekingtoimproveourestimatesofouruserbase,andsuchestimatesmaychangeduetoimprovementsorchangesinourmethodology.In2016,weestimatethat"duplicate"
accounts(anaccountthatausermaintainsinadditiontohisorherprincipalaccount)mayhaverepresentedapproximately6%ofourworldwideMAUs.Wealsoseektoidentify
"false"accounts,whichwedivideintotwocategories:(1)user-misclassifiedaccounts,whereusershavecreatedpersonalprofilesforabusiness,organization,ornon-human
entitysuchasapet(suchentitiesarepermittedonFacebookusingaPageratherthanapersonalprofileunderourtermsofservice);and(2)undesirableaccounts,which
representuserprofilesthatwedetermineareintendedtobeusedforpurposesthatviolateourtermsofservice,suchasspamming.In2016,forexample,weestimateuser-
misclassifiedandundesirableaccountsmayhaverepresentedapproximately1%ofourworldwideMAUs.However,theseestimatesarebasedonaninternalreviewofalimited
sampleofaccountsandweapplysignificantjudgmentinmakingthisdetermination,suchasidentifyingnamesthatappeartobefakeorotherbehaviorthatappearsinauthentic
tothereviewers.Ourestimatesmaychangeasourmethodologiesevolve,includingthroughtheapplicationofnewtechnologies,whichmayallowustoidentifypreviously
undetectedfalseorduplicateaccountsandimproveourabilitytoevaluateabroaderpopulationofourusers.Assuch,ourestimationofduplicateorfalseaccountsmaynot
accuratelyrepresenttheactualnumberofsuchaccounts.

Ourdatalimitationsmayaffectourunderstandingofcertaindetailsofourbusiness.Forexample,whileuser-provideddataindicatesadeclineinusageamongyoungerusers,
thisagedataisunreliablebecauseadisproportionatenumberofouryoungerusersregisterwithaninaccurateage.Accordingly,ourunderstandingofusagebyagegroupmay
notbecomplete.

Inaddition,ourdataregardingthegeographiclocationofourusersisestimatedbasedonanumberoffactors,suchastheuser'sIPaddressandself-disclosedlocation.These
factorsmaynotalwaysaccuratelyreflecttheuser'sactuallocation.Forexample,ausermayappeartobeaccessingFacebookfromthelocationoftheproxyserverthatthe
userconnectstoratherthanfromtheuser'sactuallocation.Themethodologiesusedtomeasureusermetricsmayalsobesusceptibletoalgorithmorothertechnicalerrors.Our
estimatesforrevenuebyuserlocationandrevenuebyuserdevicearealsoaffectedbythesefactors.Forexample,inlate2015,wediscoveredanerrorinthealgorithmweused
toattributeourrevenuebyusergeography.Whilethisissuedidnotaffectouroverallworldwiderevenue,itdidaffectourattributionofrevenuetodifferentgeographicregions.
Thefourthquarterof2015revenuebyusergeographyamountswereadjustedtoreflectthisreclassification.

Weregularlyreviewourprocessesforcalculatingthesemetrics,andfromtimetotimewemaydiscoverinaccuraciesinourmetricsormakeadjustmentstoimprovetheiraccuracy,
includingadjustmentsthatmayresultintherecalculationofourhistoricalmetrics.Webelievethatanysuchinaccuraciesoradjustmentsareimmaterialunlessotherwisestated.
Inaddition,ourDAUandMAUestimateswilldifferfromestimatespublishedbythirdpartiesduetodifferencesinmethodology.

ThenumbersofDAUsandMAUsdiscussedinthispresentation,aswellasARPU,donotincludeInstagram,WhatsApp,orOculususersunlesstheywouldotherwisequalifyas
suchusers,respectively,basedontheirotheractivitiesonFacebook.

20
FacebookQ22017Results

investor.fb.com