Facebook: Global user base reaches 2.9 billion in 4Q19

2019 overall review and overall strategy

In December 2019, the FB family of apps had 2.9 billion monthly active users, with 2.3 billion people using it every day. 140 million businesses used FB's services to grow, and most of them used them for free.

The company's priorities in 2019 remain the focus for 2020, namely: making progress on important social issues; creating high-quality new product experiences; continuing to grow the business; and communicating more transparently.

Great progress has been made on election integrity; similarly on privacy; but the company believes that private companies should not make too many decisions about important social issues, which would lead to excessive scrutiny.

The next chapter of the company's products is to build a private social platform and a more intimate community, empower more business and payments, and deliver the next generation of computing platforms. Among FB's businesses, the fastest growing are still private messages, small groups, and time-limited stories. The company's mission over the past year has been to build a rich private social platform, and we will see more output in the future.

The company is making good progress on its next-generation computing platform, and people bought $5 million worth of content on the Oculus store during Christmas.

FB provides 140 million businesses with opportunities to connect with customers and grow, most of which are free businesses, and 8 million businesses use our advertising services. We have encouraged customers to adopt new advertising forms, and currently 4 million advertisers have used stories, compared to 2 million in the same period last year.

Financial Data

Q4 advertising revenue was $20.7 billion, a year-on-year increase of 25%. Full-year revenue increased by 27% year-on-year, and net profit was $18 billion.

Advertising revenue grew strongest in Asia Pacific and the rest of the world, up 33% and 28% respectively, while Europe and North America grew by 24% and 22% respectively.

Ad impressions in Q4 increased by 31% year-on-year, and ad prices decreased by 5%. The increase in impressions mainly came from Facebook news feeds, Instagram stories and feeds. The increase in Facebook news feed impressions mainly benefited from the growth of the community and the amount of interaction. The decrease in ad prices was mainly due to the increase in the proportion of stories and the increase in the proportion of low-income areas.

Other revenue was $346 million, up 26% year-over-year, primarily driven by increased sales of Oculus Quest.

Total expenses were $12.2 billion, up 34% year-on-year. Costs increased by 25%, mainly due to infrastructure depreciation. R&D increased by 36%, mainly due to increased investment in core products and investment in innovative products, especially AR/VR.

Marketing and sales expenses increased by 23%, mainly due to customer and growth marketing expenses. G&A increased by 87%, mainly due to legal expenses.
In 2019, a total of 9,300 new employees were hired, and the total number of employees was approximately 45,000, an increase of 26% over the previous year.

Operating profit was $8.9 billion, with a profit margin of 42% and a tax rate of 20%. Net profit was $7.3 billion, with earnings per share of $2.56.

Capital expenditures for the full year were US$15.7 billion, up 12% year-on-year, mainly due to investments in data center servers, office buildings and network facilities.

We expect 1Q revenue growth to be low to mid-single digits lower than 4Q, with the slowdown due to the maturity of the business, global privacy regulation and other advertising targeting headwinds.

Total spending in 2020 is expected to be between $54 billion and $59 billion, with capital expenditures between $17 billion and $19 billion.