February 01, 2012 - 4:05pm EST: (New York, NY): Facebook has filed for its much awaited IPO. In a post-market close filing that generated enough traffic to clog the SEC website, Facebook filed an S-1 that revealed $3.711 billion in 2011 revenue, a growth of 88% from 2010. Total revenue was far below expectations of $4.3-5 billion in revenue (but very close to previously reported PrivCo figures of $3.8 billion). As PrivCo expected, Facebook's business showed impressive growth (154% and 88% between 2009-2010 and 2010-2011, respectively) but already shows signs of slowing down. Facebook's business is beginning to mature sooner than many had hoped. Also as PrivCo expected, Facebook selected Morgan Stanley as lead underwriter, will trade as ticker symbol "FB". The filing confirmed previous PrivCo reports that Facebook's advertising business is trailing well below expectations, but that Facebook's Virtual Goods Business (Facebook Credits) would be nearly double expectations and deliver 16% of Facebook's revenues (instead of the 8-10% widely reported by market research firms.) Facebook Credits and its position as a third party app developer's platform for social applications represent upside long-term growth potential for Facebook.
PrivCo, the private company financial data authority, has dug through the 200 page S-1 filing for some interesting findings, namely:
- Total Revenue for 2011 was $3,711,000,000, which, although is high, is a far cry from the $5-6 billion many analysts were predicting.
- Revenues grew 154% YOY in 2009-10 and 88% YOY in 2010-11 while net income grew net income grew 165% YOY and 65% YOY, respectively. Facebook’s margins are enviable.
- 2011 Ad revenue was $3,154,000,000, or 85% of total revenue
- Ad revenue growth: 2011: +68.8%, 2010 +144.5%
- Facebook Credits/Virtual Goods revenue for 2011 was $557,000,000, or 15% of total revenue (much higher than the 7-8% predicted by many analysts).
- Facebook Credits/Virtual Goods revenue growth was staggering: +425% in 2011 and +715% in 2010. As Facebook transitions from an ad-based company to a platform, this is the metric with which to analyze Facebook’s growth.
- 2011 Operating Income: 1,756,000,000 (70.1% growth)
- 2010 Operating Income: 1,032,000,000 (293.9 % growth)
As PrivCo previously predicted, Facebook will file under the stock ticker “FB”. The social network stated that it will list its shares on the NASDAQ or NYSE. The lead underwriter for the IPO will be Morgan Stanley.