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No. of Recommendations: 4
On 1/29/20, Facebook reported 2019 Q4 and FY19 earnings after the bell, and reactions were mixed. In all, Facebook beat analyst consensus on earnings and revenues, but was penalized for outlook indicating slower growth ahead. Remain foolish and take it with a grain of salt - We had seen a similar call back in FY18 Q2, but the Q4 and year end results seem to had exceeded investor expectations.

By the Numbers:

Earnings per share (EPS): $2.56 reported, beating analyst consensus of $2.53. Earnings up 8% year over year.
Revenue: $21.082 Billion, beating analyst consensus of $20.87 Billion. Revenue up 25% year over year.
Monthly Active Users (MAU): 2.50 Billion, up from 2.32 Billion. MAU up 8% year over year.
Daily Active Users (DAU): 1.66 Billion, up from 1.52 Billion. DAU up 9% year over year.

To put it into perspective, the earnings and revenue numbers look decent. Both the monthly and daily user metrics are up 8-9% year over year. Facebook's operating margin narrowed to 42% down from 46% a year ago. Across individual geographic segments, both revenue and advertising revenue were up across the board.

User Metrics:

Both monthly and daily active users breakouts show US & Canada numbers were up slightly. European user numbers were up considerably compared to quarters from previous years. Users in the Asia-Pacific and rest of the world accounted for the majority of overall user growth.

Across the full portfolio of Facebook owned applications, there are 2.89 Billion monthly users (up ~70 million users since last quarter). More than a third of the Earth's population use Facebook, WhatsApp, Instagram, or Messenger every month. Approximately, 2.26 Billion people use at least one of Facebook's services each day. Additionally, we learned more than 140 Million small business are now using Facebook's family of services.

Other notable mentions:

Mark Zuckerberg mentioned on the investor call 2020 will continue to be a key year for making progress on social issues including election integrity, improving privacy, virtual / augmented reality, as well as greater commerce and payment systems.

Facebook quietly has ditched its Instagram TV (IGTV) standalone product and its major attempt to enter standalone video services (at least for the time being). Investments into payment systems and commerce through the family of applications was big news of 2019 and will continue to be a major story into 2020.

Lastly, we learned Drew Houston has joined the Facebook Board of Directors. Drew is the co-founder and CEO of Dropbox.


Link to Press Release:

https://investor.fb.com/investor-news/press-release-details/...


Replay of the Conference Call:

https://edge.media-server.com/mmc/p/dj3mequp


Link to Conference Call Transcript:

https://s21.q4cdn.com/399680738/files/doc_financials/2019/q4...

Link to Follow Up Conf Call Transcript:

https://s21.q4cdn.com/399680738/files/doc_financials/2019/q4...

Link to 2019 Q4 Conference Call Slide Deck Presentation (PDF):

https://s21.q4cdn.com/399680738/files/doc_financials/2019/q4...

Drew Houston Joins Facebook Board of Directors:

https://investor.fb.com/investor-news/press-release-details/...

More Foolish Coverage:

Facebook’s Post-Earnings Sell-Off Is an Opportunity for Investors - https://www.fool.com/investing/2020/02/05/facebooks-post-ear...

Instagram Is a Bigger Piece of Facebook's Revenue Than You Think - https://www.fool.com/investing/2020/02/05/instagram-is-a-big...

2 Reasons to Be Excited About Facebook's Potential in 2020 and Beyond - https://www.fool.com/investing/2020/02/04/2-reasons-to-be-ex...

Why I’m Buying More Facebook After the Final Earnings Report of 2019 - https://www.fool.com/investing/2020/02/01/why-im-buying-more...

Facebook's Super-App Strategy Is Paying Off - https://www.fool.com/investing/2020/01/31/facebooks-super-ap...

Facebook Introduces Even More Family Metrics - https://www.fool.com/investing/2020/01/31/facebook-introduce...

Why These 2 Stocks Turned Sour on Thursday - https://www.fool.com/investing/2020/01/30/why-these-2-stocks...

Why Facebook Stock Dropped Today - https://www.fool.com/investing/2020/01/30/why-facebook-stock...

Before I sign off on this quarter's report out, I wanted to give a shout out and recognize the FB Boards community. The conversations are both Motley and Foolish, with a very diverse group of views and member driven discussion. You and your contributions are what makes the boards community exceptional. Keep being awesome!

If you like this type of coverage and would like to see more of it, let me know by hitting the "Recommend It!" button or leave a comment. More importantly, feel free to chime in with your thoughts and expectations for FY20.


CMFHeavyMetal

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Ticker Guide for Costco Wholesale (COST), Facebook (FB), iQiyi (IQ), Magellan Midstream Partners (MMP), Pegasystems (PEGA), Retail Opportunity Investments Corp. (ROIC), & Upwork (UPWK)
Disclosure: May own shares of some, or all of the companies mentioned in this post. (http://tinyurl.com/HM-Disclosure)
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