An excerpt from the Management’s Discussion and Analysis section of Facebook Inc. is given below. The
statement has been taken from the company’s 10-K report for FY2021.
Executive Overview of Full Year 2020 Results
Our key community metrics and financial results for 2020 are as follows:
Facebook daily active users (DAUs) were 1.84 billion on average for December 2020, an increase of 11%
Facebook monthly active users (MAUs) were 2.80 billion as of December 31, 2020, an increase of 12%
Family daily active people (DAP) was 2.60 billion on average for December 2020, an increase of 15%
Family monthly active people (MAP) was 3.30 billion as of December 31, 2020, an increase of 14% yearover-year.
Revenue was $85.97 billion, up 22% year-over-year, and advertising revenue was $84.17 billion, up 21%
Total costs and expenses were $53.29 billion.
Income from operations was $32.67 billion and operating margin was 38%.
Net income was $29.15 billion with diluted earnings per share of $10.09.
Capital expenditures, including principal payments on finance leases, were $15.72 billion.
Effective tax rate was 12.2%.
Cash and cash equivalents and marketable securities were $61.95 billion as of December 31, 2020.
Headcount was 58,604 as of December 31, 2020, an increase of 30% year-over-year.
Our mission is to give people the power to build community and bring the world closer together.
In response to the COVID-19 pandemic, we have focused on helping people stay connected, assisting
the public health response, and working on the economic recovery. We have also continued to invest
based on the following company priorities: (i) continue making progress on the major social issues facing
the internet and our company, including privacy, safety, and security; (ii) build new experiences that
meaningfully improve people’s lives today and set the stage for even bigger improvements in the future;
(iii) keep building our business by supporting the millions of businesses that rely on our services to grow
and create jobs; and (iv) communicate more transparently about what we’re doing and the role our
services play in the world.
In 2020, we also continued to focus on our main revenue growth priorities: (i) helping marketers use our
products to connect with consumers where they are and (ii) making our ads more relevant and effective.
Our business has been impacted by the COVID-19 pandemic, which has resulted in authorities
implementing numerous preventative measures to contain or mitigate the outbreak of the virus, such as
travel bans and restrictions, limitations on business activity, quarantines, and shelter-in-place orders.
These measures have caused, and are continuing to cause, business slowdowns or shutdowns in
affected areas, both regionally and worldwide, which have significantly impacted our business and results
of operations. Beginning in the first quarter of 2020, we experienced significant increases in the size and
engagement of our active user base across a number of regions as a result of the COVID-19 pandemic.
More recently, we have seen user growth and engagement returning to pre-pandemic trends, particularly
in the United States & Canada region. We are unable to predict the impact of the pandemic on user
growth and engagement with any certainty, and we expect these trends to continue to be subject to
The COVID-19 pandemic has also previously caused a reduction in the demand for advertising, as well
as a related decline in the pricing of our ads, particularly in the second quarter of 2020. More recently, we
believe the pandemic has contributed to an acceleration in the shift of commerce from offline to online, as
well as increasing consumer demand for purchasing products as opposed to services, and we
experienced increasing demand for advertising as a result of these trends. However, it is possible that
this increased demand may not continue in future periods and may even recede as the effects of the
pandemic subside, which could adversely affect our advertising revenue growth. The impact of the
pandemic on user growth and engagement, the demand for and pricing of our advertising services, as
well as on our overall results of operations, remains highly uncertain for the foreseeable future. In
addition, we expect that future advertising revenue growth will continue to be adversely affected by
limitations on our ad targeting and measurement tools arising from changes to the regulatory environment
and third-party mobile operating systems and browsers.
We intend to continue to invest in our business based on our company priorities, and we anticipate that
additional investments in our data center capacity, servers, network infrastructure, and office facilities, as
well as scaling our headcount to support our growth, will continue to drive expense growth in 2021. We
expect 2021 capital
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