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The Most Ridiculous Charts From Facebook's Quarterly Earnings
Facebook may still be able to fool most people most of the time, with gullible investors ready to believe that there were 1.393 billion monthly active addicts who just have to tell the world how their day went, of which 208 million were in the US and Canada, which is more than every single working-age American and Canadian, but where the magic of Facebook's just reported earnings of $0.54 can truly be appreciated, is in the absolutely magical breakdown between GAAP and non-GAAP for the net income microblogging service.
The punchline: Facebook reported $1,133 billion in GAAP earnings: exactly the same as a year ago. What happened to non-GAAP income from operations during the same period? It rose from $1.5 billion to $2.2 billion. Again: this is in a period in which GAAP income remained unchanged!
As for real, GAAP EPS, it was... drumroll... $0.25, or less than half of the mark-to-unicorn number that only FB shareholders, if not advertisers, can love.
Why does this matter? Because while Facebook can fool all the ostriches with their heads happily stuck in the sand, for as long as they all want, and pretend non-GAAP EPS is surging, what matters at the end of the day are profits. Real profits. GAAP profits.
The following:
So where did the adjustments, which amounted to $0.29 per share on GAAP EPS of $0.25 per share, come from? Well, everywhere...
... and to a great extent: tax gimmicks.
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FuckFacebook.
I will only consider Non-GAAP income when BTFATH.
This article is way offbase. Once Zuck's Rio Grande Rafters finish swarming the southern border then FaceBook will have 75 billion users...
...all with the same social security number
Do you know how to click ads on.........Facebook?
What ads? I use Adblock and Adblock Plus. I never see any ads.
Yup. Karl over at the MarketTicker blocked all his traffic over AdBlock. He is reasonably savvy, so I presume it must work pretty good!
Also ...
I think I know what was intended here, but this is kind of misleading for us US folks who like our pounds, teaspoons, furlongs, gallons, and periods instead of commas.
Regards,
Cooter
.
All the more reason to speak in terms of PROFITS per share rather than this EPS EBITDA charade.
BTW: good catch.
Here's NSA whistleblower and former Technical Director, William Binney, in an extensive interview where he says the FB is a security state dream:
https://www.youtube.com/watch?v=3owk7vEEOvs
thx
Binney 2016
Facebook equals people you wanted to forget about in your life find you and try to ruin the rest of your life. I do not have a need to share what my last shit looked like and at 47 yrs old I am capable of communicating with people by using my speech. how and why Facebook even exist is the 8 th wonder of this messed up world
i deleted mine two years ago, but as a 20 something i can assure you that most guys spend their time on facebook "creeping" on girls, ie looking at and in some instances masturbiznating to girls' pictures. and most girls spend their time on facebook trying to outdo the other girls, more slutty pictures, more stupid posts, more nonsense. it's a perpetual shitstorm of hormones and general retardation.
"Masturbiznating?"
=]
masturbiznate, v. to take care of one's bizness
FuckFacebook? I'd rather fuck Heidi Klum.
Tesla does the same thing. Why use GAAP when Non-GAAP makes profit look so much better. GAAP accounting is for my Dad, this is the New Math
Then your dad must have lived when 2+2=4. During a time when rules and laws mattered. Unlike the New Math and New Age where we, I mean "they", get to make it us as they go.
Facebook is a joke.......and always has been.
Had they reported last night the stock would be up 10. Last night thanks to AAPL new math didn't matter. After today's sell-off the Junkie's are Jonesing.
I'm sure you'll get tons of likes with that attitude.
Sarcasm?!
When the negation of something becomes that something, then the something becomes what the negation used to be. That is to say, if non-GAAP is the new norm, then it is GAAP, and non-GAAP is what GAAP used to be.
No habla Englise
< head explodes...>
When fraud isthe status quo, possession is 100% of the law.
that is all.
And IBB IS CERTAINLY WORTH A 997 PE..?.. right?
Ahh sooo....I see you are a master debater and holder of the word juijitsu
Ah, what's a facebook anyway? Never used it -- never will! Next!
GAAP or non-GAAP, FB is still a piece of shit.
Hence, fEcebook
I guess Zuckerberg counts every fake account as $2 in income.
Out of all the people on Earth, Zuckerberg is the one I want to hit in the face the most. He just needs to have his giant nose broken. Then I can laugh my ass off as he cries like a little girl and runs off.
Although the rage I would put through my fist would probably kill him on inpact.
I propose a cage match between Tim Cook and MarkZ
Flawless Victory
SpongeBob v. Mr. Burns.
I wonder if they count the accounts that they make for people who appear in users photos/posts?
What about Linkedin ~? No Farceplant is complete, without some Linkedin?
Don't get me started....people work backbreaking jobs for shit wages while some asshole PR bitch at Linkedin walks away with millions in stock options...
What a fucking sham that company is. I live a few minutes from their HQ.
FaceLinkedBookIn
Same shit, different label.
I suggest FeceLinks. Think about the imagery.
Actually, you're on to something. ‰ hOVERBOARDS.
It is hard to justify a 70+ P/E when earnings are stagnating/declining.
What we have here is a GAAP in management honesty. They don't want anyone to know that we have reached peak FB.
Ok, let's suspend our disbelief for a second and believe FB indeed has 1.4B active users. There are roughly 7 B people on this earth, most of whom don't have a computer/cel phone etc , let alone reliable internet access ( think vast swaths of Africa/M.E/ Asia). So what FB is saying is that everybody who has internet access is an active FB user? I hit the bullshit buzzer on that. And where's the growth going to come from if you have already saturated your market???
also FB is banned in china leaving only 5.5B potential users
Why don't they just report 12B users with expectations of 15% growth for the next seven years and be done with it.
Regards,
Cooter
Facebook is the CB radio of our time. (Look it up, kids).
bACK TO BASICS?
Who's seen an optical (audio) outlet on the back of their TV?
Let them clickers thru 10:4. We gotta great big
shit stock rolling thru the night, yeah we gotta great
big shit stock ain't it a beautiful sight
Kudos to CFO David M. Wehner. Well played sir!
#WEHNNING!
For a second there, I thought FB netted some new government contracts and pulled in over a trillion in revenue.
FOOLS!!! GAAP is for little unimportant people. Companies that are systemically important or providing the NSA with critical, even unlawful information on little, unimportant people don't even think in GAAP. They use GET! (get it?)
If you did not know this or can't understand then stop asking because you are little and unimportant. Just pay your taxes and thank BO that you still have a country over which the shadow of recession has passed. These are complicated calculations and required knowing the numbers that are NEEDED and not the numbers that you seem to find when you apply your 20th century mind to 21st century problems.
Sorry if I sound dismissive but get the fuck out of their way.
From the statement, FB paid out nearly $900 million in "share based compensation" during the quarter. This accounts for a big part of the difference. So FB is making money, but a huge chunk of it is going to management and using non-GAAP earnings allows them to hide this fact.
It's really amazing. 15 years ago it was profit (after interests und taxes). Then it was EBIT. Then it was EBITA. Then EBITDA. Then they switsched to EPS, because of stock buy backs. And the last couple of years it is adjusted GAAP income and Non-GAAP income.....what's next?
Schade..it will be what it has been for a good while...exactly what they need it to be....try to keep up..
When gross margin = profit and the cost of employees got adjusted we are finally there.
SCHICK CINCO!!
Most of what you are writing about is actual GAAP measures, just different metrics. Adjusted GAAP is intended to show pro-forma results from one-time instances or a big non-cash charge in a specific quarter so analysts can quickly compare quarter over quarter.
What FB is doing is trying to hide the fact they've made several big aquisition in excess of fair value and they have to amortize as an expense. The non-GAAP earnings hide a seriously bad transaction, that's why they do it.
We GAAPED some folks...and gathered every single little piece of shit information on them like a hoarder on crack.
Zuckerfuck sold his lousy soul to Satan. Fuck him and dragon he rode in on.
Is Facebook like My space..that was BIG!!
...then it got uncool and poof, like a fart in a huricane, like a puff of smoke in a cloud, like a grain of sand in your undies after a day at the beach, like a singly synapse in Einsteins brain, like a drop of pink slime in the totality of the fat stored from McBurgers burgers...I could go on but I get paid in real terms, if I was allowed nonGAAP...then I'd try harder...
While Facebook is an overpriced, useless piece of crap that won't exist in five years, ZH's obsessions with non-GAAP earnings is truly idiotic. There are plenty of GAAP accounting standards that are completely and utterly useless. Somebody tell me what's wrong with the adjustments FB made above? Really, tell me. I'm an equity analyst who covers financial services; with the exception of banks, GAAP is almost entirely useless for financials. Please, ZeroHedge, stop the bullshit posts like this.
please explain why that is. Specific examples would be great.
Equity REITs: you think AFFO/FFO are BS but GAAP isn't? A company that adds value to a property and consistently puts capex into making this the case has to take huge depreciation against the property, among a myriad of other things that also make no sense. BDCs: Net investment income is used instead of GAAP becasue fair value marks on level 3 assets don't mean shit in terms of the earnings power the company is generating; they're merely third party marks. If an investment in the portfolio isn't perfomring, that's already reflecting in decreasing investment income yet it gets marked in GAAP. Mortgage servicers: again, marking MSRs based on Monte Carloi simulations, I've seen MSRs get marked down because falling rates would increase prepayments in theory, even when that quarter CPR slowed, so that is commonly backed out. You want 5 more examples, or are you starting to realize that ZH is becoming a pandering bunch of crap? No wonder so many leftists and sociology majors are flocking here, it's becoming a joke.
ZH can't be the ultimate wisdom of the universe without contribution. You should write a whole article clearing this up.
That's how ZH got good in fhe first place.
Oh wait I forgot a real laugher. The GAAP accounting on CLOs, an asset that experienced nearly no losses through the crisis. So because of volatility picking up spreads have widened, CLO equity marks under GAAP have been huge. There has been no impairments of cash flow to the residual interest component. In volatility, CLO managers love it because they reinvest at higher spreads even though the debt the CLO is funded with won't reprice, thus the excess cash flow going to the residual interest becomes outsized. Literally the returns get better and the fair value marks get worse. Another BS GAAP rule that makes no practical sense. Anybody that understands these businesses knows GAAP has so much bullshit it's unreal.
I must have missed the part where FB became a financial services company thereby making your criticism on point.
Facebook uses the the accounting firm of Winston, and Smith.
Their motto is: Picking up where Arthur Andersen left off.
The banksters need to repay us.
Here's a likely nightmare for people to consider: I predict that it is only a matter of time before the IRS starts taxing businesses, the less than gigantic ones, on non-GAAP income. And they'll do it retroactively, saying your business owes for the past 7 years.
You heard it here first.
The banksters need to repay us.
I seem to remember that in the early 90s the IRS arbitrarily decided to not allow some tax shelters that they had been allowing for years. Levied back theft, augmented theft, and usury, for the prior 7 years. Bankrupted many folks, especially a lot of dentists.
GAAP, non-GAAP
used to be keeping 2 sets of books was the sure sign of racketeering! Nowadays it's normal business. How'd that happen?