Facebook Earnings Beat - Revenue Misses
October 26, 2021
Facebook reported financial results for the
quarter ended September 30, 2021. The firm's earnings came in at
$3.22 vs $3.19 per share which was expected. The big tech company's top
line revenue was $29.01 billion, but $29.57 billion was expected.
"We made good progress this quarter and our community continues to
grow," said Mark Zuckerberg, Facebook founder and CEO. "I'm excited
about our roadmap, especially around creators, commerce, and helping to
build the metaverse."
CFO Outlook Commentary
Starting with our results for the fourth quarter of 2021, we plan to
break out Facebook Reality Labs, or FRL, as a separate reporting
segment. As we have discussed, we are dedicating significant resources
toward our augmented and virtual reality products and services, which
are an important part of our work to develop the next generation of
online social experiences. The new segment disclosures will provide
additional information on the performance of FRL and the investments we
Under this reporting structure, we will provide revenue and operating
profit for two segments: The first segment, Family of Apps, will include
Facebook, Instagram, Messenger, WhatsApp and other services. The second
segment, Facebook Reality Labs, will include augmented and virtual
reality related hardware, software and content. We expect our investment
in Facebook Reality Labs to reduce our overall operating profit in 2021
by approximately $10 billion. We are committed to bringing this
long-term vision to life and we expect to increase our investments for
the next several years.
Ahead of the fourth quarter earnings call, we will share additional
details about the reporting format of our segmented financials.
We expect fourth quarter 2021 total revenue to be in a range of $31.5
billion to $34 billion. Our outlook reflects the significant uncertainty
we face in the fourth quarter in light of continued headwinds from
Apple's iOS 14 changes, and macroeconomic and COVID-related factors. In
addition, we expect non-ads revenue to be down year-over-year in the
fourth quarter as we lap the strong launch of Quest 2 during last year's
holiday shopping season.
As previously noted, we also continue to monitor developments regarding
the viability of transatlantic data transfers and their potential impact
on our European operations.
We expect 2021 total expenses to be in the range of $70-71 billion,
updated from our prior outlook of $70-73 billion. We anticipate our
full-year 2022 total expenses will be in the range of $91-97 billion,
driven by investments in technical and product talent and
expect 2021 capital expenditures to be approximately $19 billion,
updated from our prior estimate of $19-21 billion. For 2022, we expect
capital expenditures to be in the range of $29-34 billion, driven by our
investments in data centers, servers, network infrastructure, and office
We expect our fourth quarter 2021 tax rate to be in the high-teens.
Absent any changes to U.S. tax law, we would expect our full-year tax
rate in 2022 to be similar to the full-year 2021 rate.
Please note that our outlook for 2022 expenses, capital expenditures and
tax rate are preliminary estimates as we have not finalized our 2022
New Financial Reporting Segment Structure
Beginning in the fourth quarter of 2021, we will implement a new
financial reporting segment structure with the following two reportable
Family of Apps (FoA), which includes Facebook, Instagram, Messenger,
WhatsApp and other services.
Facebook Reality Labs (FRL), which includes augmented and virtual
reality related consumer hardware, software and content.