Financial report for the third quarter of the fiscal year 2021 as of September 30 shows that Facebook’s total revenue in the third quarter was US$29.01 billion, an increase of 35% from US$21.470 billion in the same period last year; net profit was US$9.194 billion, an increase of 17% from US$7.846 billion in the same period last year.
Facebook said that the company’s investment in augmented reality, virtual reality, and other related businesses will result in a reduction of approximately US$10 billion in overall operating profit for the company this year. Facebook also announced an additional $50 billion in stock repurchases. Facebook’s third-quarter revenue fell short of expectations, but earnings per share exceeded expectations, and its stock price rose more than 2% in after-hours trading.
Facebook’s opening price on the Nasdaq exchange on Monday was $320.30. As of Monday’s close, Facebook’s stock price rose by 4.08 US dollars to close at 328.69 US dollars, an increase of 1.26%. As of 17:17 on Monday, Facebook’s stock price rose by US$6.64 to US$335.33 in after-hours trading, an increase of 2.02%. In the past 52 weeks, the highest Facebook share price was $384.33 and the lowest was $244.61.
Key operating points for the third quarter:
In September 2021, the average daily active users (DAU) of Facebook was 1.93 billion people, a year-on-year increase of 6%;
As of September 30, 2021, Facebook has 2.91 billion monthly active users (MAU), a year-on-year increase of 6%;
In September 2021, the average daily active users (DAP) of the application family (Facebook, Instagram, etc.) was 2.81 billion, an increase of 11% year-on-year;
As of September 30, 2021, the monthly active users (MAP) of the application family were 3.58 billion, a year-on-year increase of 12%.
Financial Performance for the third quarter:
Total revenue was US$29.01 billion, an increase of 35% from US$21.470 billion in the same period last year;
・Advertising revenue was USD 28.276 billion, an increase of 33% from USD 21.221 billion in the same period last year;
・Other revenue was US$734 million, an increase of 195% from US$249 million in the same period last year;
Total costs and expenditures were USD 18.587 billion, an increase of 38% from USD 13.430 billion in the same period last year;
Operating profit was 10.423 billion U.S. dollars, an increase of 30% from the 8.40 billion U.S. dollars in the same period last year; the operating profit ratio was 36%, which was a decrease of 1 percentage point from 37% in the same period last year;
The income tax reserve was 1.371 billion U.S. dollars, an increase of 378% from the 287 million U.S. dollars in the same period last year;
The effective tax rate is 13%, an increase of 9 percentage points from 4% in the same period last year;
Net profit was USD 9.194 billion, an increase of 17% from USD 7.846 billion in the same period last year;
Diluted earnings per share were US$3.22, an increase of 19% from US$2.71 in the same period last year;
Capital expenditures of US$4.54 billion, including principal repayment of financial leases;
As of September 30, 2021, the total amount of cash, cash equivalents, and marketable securities held by Facebook was US$58.08 billion;
As of September 30, 2021, the total number of Facebook employees was 68,177, a year-on-year increase of 20%.
Additional USD 50 billion in stock repurchase
In the third quarter, Facebook repurchased the company’s Class A common stock worth $14.37 billion. As of September 30, 2021, Facebook’s previously announced share repurchase plan has a remaining amount of US$7.97 billion. Facebook also announced today that it will increase the size of the company’s authorized stock repurchase by $50 billion.
Facebook founder and CEO Mark Zuckerberg said: “We made good progress in the third quarter and our community continues to grow. I’m very excited about our roadmap, especially about creators, Business, and a road map to help build the meta-universe.”
Outlook for the fourth quarter:
Starting from the fourth-quarter earnings report, Facebook will spin off the Facebook Reality Lab (FRL) as a separate department report. Under this structure, Facebook will report revenue and operating profit in two parts: one is the application family, including Facebook, Instagram, Messenger, WhatsApp, and other services; the second part is the Facebook reality laboratory, which includes augmented reality and Virtual reality related hardware, software, and content.
Facebook expects that the company’s investment in Facebook Reality Lab will result in a decrease of approximately US$10 billion in overall operating profit in 2021, and will increase investment in the next few years;
Total revenue for the fourth quarter is expected to be between US$31.5 billion and US$34 billion;
Total expenditure this year will be between US$70 billion and US$71 billion, which is lower than the previously estimated US$70 billion to US$73 billion; the total expenditure for the whole year of 2022 will be between US$91 billion and US$97 billion. Mainly driven by investment in technology and product talents and infrastructure-related costs;
This year’s capital expenditure is expected to be approximately US$19 billion, compared to the previous forecast of between US$19 billion and US$21 billion; capital expenditure in 2022 is expected to be between US$29 billion and US$34 billion; tax rates for the fourth quarter of 2021 It is expected to range from 18% to 19%, and the annual tax rate in 2022 is expected to be close to this year.
