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Below is an ongoing record highlighting notes from select FB investor presentations and earnings calls (newest content shown first).

Third Quarter 2018 Earnings Call, 10/30/2018


  • We had a solid quarter and our community and business continue to grow quickly
  • 5Bn people use FB everyday
  • There are now more than 2.6 billion people using Facebook, WhatsApp, Instagram, or Messenger each month, up from around 2.5 billion last quarter
  • We’re seeing the way people connect move to private messaging and Stories
  • We’re seeing video grow dramatically across the ecosystem
  • We’re still seeing increased safety and security threats
  • Messaging and Stories are the vast majority of the growth we are seeing in sharing as people feel more comfortable sharing with a smaller group and when content won’t stick around forever
  • People now send 100Bn messages a day using our services. Our biggest competitor by far is iMessage.  In the US, where the iPhone is popular, iMessage is ahead of our services, but in Europe, where there is more competition between iOS and Android, people tend to prefer our services
  • People like our services, especially WhatsApp, because of the strong record on privacy. WhatsApp is completely end to end encrypted and does not store your messages
  • Roadmap includes adding payments to messaging services
  • First step on the business side of messaging is to enable people to connect with businesses and second step is give businesses additional paid tools to give people additional interactions
  • Well into step 1 with more than 3mm accounts on WhatsApp Business
  • We will begin step 2 with paid messaging and ads in stories
  • Stories – people share more than 1Bn stories every day
  • WhatsApp status and Instagram Stories immediately took off but Facebook Stories started off slower. Our effort to shift Facebook from News Feed first to stories-first hasn’t been as smooth as hoped
  • We are early in developing our ad products for Stories, so we don’t make as much money on stories as the Feed
  • Revenue growth may be slower as we shift from a Feed only world to Feed plus Stories (similar to the shift to mobile)
  • Feeds will continue to drive the majority of growth until Stories become an even bigger driver
  • Facebook app is focusing on a few priorities: Stories, video, and focus on communities and groups
  • Next 10 years will be about communities to fulfill a major need such as dating, finding a job, growing your small business, buying/selling things, etc
  • Rolling out dating across the world soon
  • Instagram – Explore is already 20% of time spent on Instagram, but we haven’t built any ad products for it yet
  • Video displaces some social interactions. Solution has been building separate video experiences outside of the Feed with Watch on FB and IGTV on Instagram
  • Video monetizes significantly less well than people interacting on the Feed
  • Security – systems for detecting interference in elections is a lot more mature now
  • Expect 2019 to be another year of significant investment, but beyond 2019, we know that costs need to match revenue better
  • Ad revenue up 33% yoy with mobile ad revenue up 40% and making up 92% of total ad revenue
  • 6mm advertisers are active on Facebook, Instagram, and other services
  • Rolled out ads in Facebook Stories in Q3
  • DAUs of 1.49Bn was up 9% yoy
  • Today, most advertisers are reaching consumers through advertisers on Facebook Feed and Instagram Feed. Consumers are spending more time in Stories, so we introduced ads for Instagram Stories and Facebook Stories
  • Over 10Bn messages sent between people and businesses every month on Facebook Messenger. We are exploring how advertisers can reach consumers through sponsored messages
  • In Q3, completed the shutdown of partner categories to improve safety and security and investing heavily in technology and content to move bad content as quickly as possible
  • DAUs up 9% compared to last year driven by India, Indonesia, and Philippines
  • Asia Pac ad growth strongest at 38% followed by 34% Europe and 33% North America. Rest of world at 26% due to currency weakness and economic challenges in Latin America
  • Price per ad up 7% and ad impressions served up 25% driven by Feed ads on Instagram and Facebook
  • Total expenses up 53% with headcount of 33,600 up 45%
  • For Q4, we expect total revenue growth rate will decelerate by mid to high single digit percentage compared to the Q3 total revenue growth rate
  • Slower growth due to product surfaces and geographies that monetize at lower rates, some impact to pricing from data privacy initiatives, and more prominent placement of Stories will impact some ad impression opportunities
  • Expect total expenses to grow 50-55% vs. 50-60% prior guidance range for 2018
  • $14-14.5Bn capex guidance for 2018 vs. $15Bn prior estimate
  • Expect 2019 total expenses to grow 40-50% vs. 2018
  • Expect 2019 capex of $18-20Bn and mid-teens tax rate for 2019
  • Q&A with Sell-side Analysts
  • Challenges for Stories? What if it doesn’t work?
    • Initial version of Stories on Facebook wasn’t as good as we wanted it to be. There were bugs, and we have been working on dialing that in
    • I’m less worried about it not working because we’re starting to see it really take off
  • Key drivers for higher Watch and video engagement?
    • We’ve had to limit video growth due to it displacing social interactions
    • There are a lot of places to go to consume video content. We needed to figure out a way so that video can grow but people can also keep interacting
    • We are working through what that formula looks like, so we can take the limits off
    • Watch is up 3x in the US in the last few months
  • Engagement on Facebook + Instagram?
    • Across our family of apps, engagement is growing quickly and very happy with it
    • Vast majority of growth in sharing is coming from private messaging and Stories
    • Over the last few years, amount of time people spent was being driven by consumption of public content like news and passive video content, which came at the expense of interactions
    • We’ve intentionally reduced time spent on lower quality viral videos, some news, some passive content. These things have improved the trajectory of how people are interacting
    • We feel like we’re close to saturation in a lot of countries like the US but continue to grow at fast rate in developing countries
  • Initial 2019 growth color?
    • Rollout of ads for WhatsApp status is a small driver
    • Some of the things impacting Q4 growth will also play out in 2019 to some extent but we’ve got a lot of good growth opportunities
  • Long-term operating margins of mid-30s
    • In the not-too-distant future, trends we see suggest that people will share more into Stories than they will into Feeds, so the whole market for Stories will be bigger than Feed
    • And this trend has happened quickly
    • The community growth we are seeing is outpacing so far the progress we have made in developing ads for it
  • Challenge with transition to Stories?
    • Stories will be a new ad format that we have to educate the market on
    • Monetization will depend on time spent in Stories, which will influence number of ad impressions and the effectiveness of those ads, which feeds into advertiser ROI
  • Building a meaningful business around private messaging?
    • Much earlier stage on private messaging. We’re making sure businesses can connect with people
    • Businesses are going to be careful with the content they are sending
    • Seeing some nice traction with Click to Messenger ads with the News Feed, which takes advantage of both the Messenger and News Feed platform
  • How can Feed continue to be a strong growth driver
    • Getting more people engaged on Facebook and Instagram and improving the quality of the interactions
    • Getting more advertisers active in the system and improving the relevancy of the ads