Facebook Financials Leaked: They Need a Strong Fourth Quarter

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facebook valuationAlthough it is common knowledge that Facebook has over 800 million users and is the most popular social network in the world, the company is typically quiet regarding its financials. However, a “well-placed mole” recently provided news sources with access to Facebook’s classified financial information.

The leaked financial data revealed that Facebook has total assets of $5.6 billion, cash assets of $3.5 billion, and zero debt. The cash on hand, which is equivalent to well established companies such as eBay and Yahoo, is most likely due to the social network’s ability to capitalize on ads, continued growth, and the ability to monetize users. Through the first three quarters of 2011, Facebook has been able to produce a total of $2.5 billion of gross revenue and $714 million of net income.

While the $3.5 billion cash on hand and the $714 million of net income through the first three quarters is impressive, Facebook is not on track to exceed financial targets that were leaked in early 2012. In February, Facebook projected that total 2011 revenue would be approximately $4 billion and that EBIDTA (earnings before interest, depreciation, taxes, and amortization) would be $2 billion. Barring unforeseen fourth quarter revenues, analysts and industry experts are predicting that Facebook will fall short of these important goals.

Even though Facebook may miss some of its 2011 financial targets, the numbers the company is putting up are quite impressive. However, are the numbers impressive enough to raise $10 billion on a $100 billion dollar valuation? With a rumored Facebook IPO set to take place early (between April and June) 2012, the stock market, analysts, and investors will continue to carefully watch Facebook’s financials and corporate filings. In order to win over skeptics, Facebook needs to have a strong fourth quarter and meet or exceed the $4 billion gross revenue and $1 billion net revenue predictions.

[Sources Include: Gawker & Business Insider]

David Angotti

David Angotti

After successfully founding and exiting an educational startup in 2009, I began helping companies with business development, search engine marketing (SEM), search engine optimization (SEO),... Read Full Bio
David Angotti
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  • Lime Bathrooms

    Are Facebook that bothered with the numbers?
    I don’t think so – they turned down $1 billion early on and then $15 billion from Microsoft without even thinking so I guess if the numbers aren’t right, they’ll happily wait until the time suits them

  • Orissarealestate


    No doubt that Facebook has multimillion users, though users are becoming hugely likewise its expenditure to them also huge. So it is better that they have to look into their company turn over. A general truth is that no one can able to stay top always, they have to return one day to bottom. So don’t worry it ‘ll bounce back again.

  • John Nagle, Silicon Valley, CA

    If your source gives you EBIDTA (sometimes called “earnings before all the bad stuff”), not GAAP net income (which the SEC makes public companies repoot), you’re being bullshitted. That’s not “inside information”, that’s a promotional leak.

    From Alexa rankings, Facebook traffic peaked in mid-2011, before Google+ launched. Until then, it had been climbing steadily. The period of growth seems to be over. Facebook now has to be valued as a mature company.

    Social networks seem to have a limited lifespan, like nightclubs. Remember AOL, Geocities, Friendster, Myspace, etc. After a while, they’re no longer the cool new thing. Valuing Facebook at 20x earnings implies that they stay in business at their current level for 25 years. That’s unlikely.