Facebook Bargain? 955M Users, $1.18B Revenue, Instagram 80M Members

Well, I guess not everyone were impressed by Facebook first-time quarterly reporting results (for the second quarter of 2012). In fact, it seems that most investors were pretty disappointed… How else can you explain a 8.5% dive in the share price?

But unlike most investors, I think that Facebook quarterly numbers aren’t as bad as the cold-hearted market makes them look like. Actually, in my opinion some of those figures are even spectacular. No, I’m not crazy… Why don’t you hear me out first?

Users

Facebook Monthly User Base Q2 2012The company indicates that the social network monthly active user-base has grown to 955 million users. That is still a fantastic quarterly growth rate of 6% (when most of the growth came outside of the North American market) from the 901 million monthly users reported in April.

The daily active user-base had also aligned with this quarter-to-quarter growth accordingly as it increased to 552 million daily users. It means that about 60% of Facebook’s monthly users are visiting the social network on a daily basis which is a remarkable thing.

What I found most interesting from the users angle, is Facebook’s mobile user-base. On the second quarter of 2012 Facebook had 543 million mobile monthly active users which represent nearly 60% of the total users and a rise from 54% on the first quarter of the year.

Mobile is becoming a bigger part for the company’s user-base and it is pretty safe to assume that it will even grow bigger throughout the year. Interestingly, those relative mobile chunk out of the pie are almost equal to Twitter’s mobile user-base percentages

Revenue

Facebook Revenue Q2 2012Facebook reported it earned on the second quarter of 2012 $1.18 billion, rising by over 30% from the second quarter of 2011. Most of the revenue came from ads which were responsible for 84% out of the total or $992 million. However, Facebook somehow managed to report an income loss of $743 million after expenses of $1.93 billion! How..?

Well, it appears that Facebook had to recognize a $1.3 billion share-based compensation for the company’s employees after the IPO. It is important to stress that this huge scary expense, which perhaps was the main reason for the fall in company’s share price, was just a one-time thing (at least in those enormous proportion).

Facebook can also be encouraged by the fact that the average revenue per user remain high at $1.28 which is even slightly higher than the $1.26 on the second quarter of 2011.

Instagram

Facebook’s monarch, Mark Zuckerberg, has issued the Instagram acquisition on the earnings call stating that currently there isn’t any integration between the two social networks as the deal hasn’t finalized yet. It has already been reported before that the FTC probes the deal which apparently leads to the deal’s closing delay.

But if and when the deal will eventually close, Facebook will receive a much greater photo-sharing community than the time it initially proposed to acquire it. On a pretty suspiciously coincidental timing as Facebook second quarter results, Instagram announced that it surpassed the 80 million members milestone.

This number is even more amazing when considering that just three months ago Instagram reported to have 50 million members, meaning a 60% boost in a matter of just a few months!

When I humbly observes all these data, I can’t help being optimistic about Facebook future and ponder if Facebook’s share is a bargain after its huge decline.

Disclosure: At the moment I’ve written this post, I don’t own any Facebook’s shares (and nor could afford to).

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