Facebook S-1 Form 4th Amendment: 901 Million Users, Instagram Deal, Zynga Dependency and More

Facebook Details April 2012Fun, fun, fun. Ever since Facebook filed for IPO about three months ago, it is pretty much required to update and disclose details about the company’s state and important recent events that might impact it, for the sake of future potential investors and transparency.

So now, the giant social networking company has filed its fourth amendment of the S-1 form, which indicates about some major changes across many aspects of the company. So far, this amendment contains the most significant changes than all others and offers us a close glimpse about the company updated status for the first quarter of 2012.

Let’s go over how Facebook is evaluating its latest changes as they are being reflected on the updated S-1 form:

Users

Facebook ended up the first quarter of 2012 (until March 31st) with the amazing number of 901 million monthly active users! This is a 6.6% rise in three months and reinforce the early analysis that the social network might cross the one billion users at some point during the third quarter of the year.

The company also reported that it crossed the half of billion daily active users after a rise of 8.9% since the end of December 2011, climbing to 526 million users that enter Facebook on a daily-basis.

Mobile users generated the biggest jump- 488 million monthly users who uses Facebook mobile products and more than 500 million monthly mobile users in general. That is a 15.7% jump from the 432 million mobile users in December as reported in the second amendment.

Facebook Monthly/Daily Active Users March 2012

Revenue

Facebook total revenue in the first quarter summed at $1.058 billion. That’s significantly higher (nearly +45%) than the $731 million in the first quarter of 2011, which isn’t surprising when considering the massive growth of the network’s user-base.

However, the company’s profits bottom line (net income) was lower- $205 million compared to $233 million in 2011. That also isn’t surprising when considering the giant acquisition of Instagram (more on that next). Overall, advertising was responsible for the big majority of the company’s revenue with $872 million.

The company is also indicating that it managed to optimize its average revenue per user- On the first quarter of 2012 it earned $1.21 per user which is 6% higher than the first quarter of 2011. Another good indication is that the company decreased its dependency on the north-American market- Down to 50% of the total revenue, from 54% in Q1 2011.

Facebook Revenue March 2012

Company Worth

Facebook is evaluating that its share price (Class B common stock) as for January 31st is fairly valued at $30.89. According to this share price, Facebook essentially evaluating it worth by about $77 billion (the company has about 2.5 billion shares in total).

This share price is much lower than the share prices the company was traded on secondary private markets (which went as high as $44.10 a share) and granted the company a worth of more than $100 billion. The reason? Facebook lawyers and accountants probably tries to stick to more (much more) conservative estimations.

Instagram Deal

Facebook reported that it acquired Instagram for $300 million in cash and additional approximately 23 million stocks. Based on the company’s own share price valuation ($30.89) the total deal value is about $1.01 billion. But if we evaluate Facebook’s share by less conservative estimation, let’s say $40 a share, the deal can be worth more than $1.2 billion.

Another interesting disclosure about the deal terms, is that Facebook agreed to pay Instagram $200 million termination fee if the deal will eventually wouldn’t close (which expected to happen on the second quarter of the year).

Zynga Dependency

Facebook stating that in the first quarter of 2012, Zynga was responsible directly for 11% of the company’s revenue and 15% in total (including Zynga’s third-party apps). Even though it is lower than the 19% of the revenue in total Zynga was responsible in 2011, it is still pretty heavy dependency.

It is important to mention that Zynga has announced on the launch of zynga.com as a standalone gaming platform site at the beginning of March, which may shift gamers to play on this site and not on Facebook.

These are the most important updates from this revised S-1 form, which will probably be the last one until the actual public offering (reported to occur on May 17th). If you think there are more important changes that I didn’t mentioned, you are welcome to leave a comment!

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