Information Technology - Internet, Software & Services | Reports January 27, After Markets Close
Key Takeaways
- The Estimize consensus calls for Facebook (O:FB) EPS of $0.69 and revenue of $5.385 billion, right in line with Wall Street’s estimates
- Facebook no longer relies solely on ad revenue and has now developed new sources of revenue stream, largely contributing to its booming growth.
- Facebook continually reports double the monthly active users (MAU) and daily active users (DAU) of its peers, Twitter (N:TWTR) and LinkedIn (N:LNKD).
The social media darling Facebook is poised to close an impressive 2015 when it reports fourth quarter earnings this evening, January 27, after the markets close. The Estimize consensus calls for EPS of $0.69 and revenue of $5.385 billion, right in line with Wall Street’s estimates.
Compared to Q4 2014, this represents a projected YoY increase in EPS and revenue of 26% and 40%, respectively. This has come at the delight of investors as share prices have risen over 25% in the past year. Facebook no longer relies solely on ad revenue and has now developed new sources of revenue, largely contributing to its booming growth. 
Last quarter, Facebook reported 1.55B monthly active users (MAU), a resounding 14% YoY increase. This is crucial in the industry because a stronger social network leverages more opportunities for valuable interactions, user growth and revenue. Compared with its peers, Twitter and Linkedin, Facebook is far ahead in both MAU and DAU.
Facebook has also developed an interest in growing internationally. Despite lower revenue per user in emerging markets, Mark Zuckerberg has been drawn to expanding in India, home to more than one billion people who are not connected to the internet. By reaching a larger audience, Facebook’s instant ads will create more value for advertisers.
The Facebook of today is drastically different than the one that went public in 2012. It no longer relies solely on ad revenue and has expanded its ecosystem to services and applications. Notably, Facebook’s past acquisitions of WhatsApp, Oculus Rift, and Instagram have performed remarkably well.
This March, Facebook will start shipping the Oculus Rift virtual reality device, creating a potential source for long-term revenue growth. WhatsApp is approaching a record one billion users while Instagram has more than 400 million users. Facebook’s newest partnership, and possibly biggest, with Royal Bank of Scotland (L:RBS), will work on a new enterprise product “Facebook at Work” to connect company employees around the world. With many new initiatives in place, Facebook’s revenue grew an impressive 40% over each quarter of 2015 and shows no sign of waning in 2016.