Facebook Q3 Bests Wall Street Expectations: $1.26 Billion Revenue, $0.12 Non-GAAP EPS

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Facebook released the financial results for the third quarter of 2012 just after the stock market closed this afternoon.

All eyes are on the social networking company to show Wall Street some sort of sign of strength in the results from its second quarter as a publicly-traded company. Its stock price has lagged at around $20 and below for several months now, a significant decline from the $38 per share price it had when it held its closely-watched (and much-criticized) initial public offering this past May.

We’ll be digging into the company’s results for the next couple hours, with a careful eye on its mobile traction, as well as sitting in on its call with investors and analysts. But to get started, here are the straight up Q3 numbers and how they compare to Facebook’s history:

Facebook posted third quarter revenue of $1.26 billion, up nearly seven percent from its Q2 2012 revenue of $1.18 billion and up 32 percent from the $954 million in revenue it posted in the third quarter of 2011, before it went public. The company’s third quarter net income on a non-GAAP basis was $372 million, up from the $295 million in non-GAAP net income it posted in Q2 and up from the $227 million in net income it reported a year ago in the third quarter of 2011. This means its non-GAAP earnings per share (EPS) was 12 cents.

On a GAAP (generally accepted accounting principles) basis, Facebook posted a loss of $59 million during the third quarter. The major discrepancy between GAAP and non-GAAP here is share-based compensation, income taxes and payroll tax adjustments. Generally, Wall Street analysts have been evaluating Facebook’s net income performance from a non-GAAP perspective since its IPO.


Wall Street analysts projected
that Facebook would report revenue of $1.23 billion and non-GAAP profit of 11 cents per share, so this report safely surpassed those estimates. The company’s stock has been perking up over the past couple of days in preparation for the earnings report, and in after-hours trading the stock continued to rally: In the first twenty minutes after its Q3 report was published, Facebook stock was up nearly 10 percent, to $21.41 per share.

In a statement accompanying the earnings report, Facebook CEO Mark Zuckerberg touted the fact that Facebook’s user count just passed the 1 billion mark, as well as updated mobile numbers — and vowed to take advantage of the company’s scope as an opportunity to make more cash:

“As proud as I am that a billion people use Facebook each month, I’m also really happy that over 600 million people now share and connect on Facebook every month using mobile devices. People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform. At the same time, we are deeply integrating monetization into our product teams in order to build a stronger, more valuable company.”

Here’s Facebook’s Q3 earnings compared to its past few quarterly results in handy graph form, courtesy of TechCrunch’s graphic designer Bryce Durbin: