The social-networking company made $3.7 billion in revenue in 2011, according to the S-1 documents it filed with the SEC today. Facebook filed the documents as the first step in going public. No starting price has yet been named, but Facebook said it expects to raise $5 billion in the IPO. The transaction may leave the company valued between between $75 and $100 billion, of which founder Mark Zuckerberg will own 28.2 percent.
After expenses, the company had $1 billion in earnings, for an earnings per share of $0.46 on a diluted basis.
The S-1 doesn’t break out earnings before interest, taxes, deductions and adjustments (EBITDA, a common business metric) per se, but earnings before accounting for “other expenses” and taxes are $1.76B, and net earnings before taxes are $1.7B.
“We generate substantially all of our revenue from advertising and from fees associated with our Payments infrastructure that enables users to purchase virtual and digital goods from our Platform developers,” according to the document.
$3.1 billion of Facebook’s 2011 revenue came from advertising, while just $557 million came from payments and related fees. The total is an increase of 88 percent from 2010, when the company make $1.97 billion in revenue ($1.87 billion of it from advertising, and $106 million from payments).
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While payments is generating a relatively small fraction of Facebook’s income, it is growing rapidly, from $13 million in 2009 to $557 million in 2011. Even accounting for just the last year’s growth, payments are up fivefold.
The growth in payments revenue is attributable to the adoption of Facebook Payments, which began generating significant revenue in the fourth quarter of 2010 and became mandatory for all game developers who want to accept customer payments starting in July, 2011.
In addition, Facebook has almost $4 billion in working capital on hand. While that’s nowhere near Apple’s cash reserves of $100 billion, it’s an impressive number for a seven-year-old company that describes itself as being in the “early days of pursuing our mission to make the world more open and connected.”
Interestingly, 12 percent of the company’s revenue comes from its partnership with games company Zynga, which is the dominant provider of games on the Facebook platform.
The documentation also lists what Facebook has been spending its money on:
- $860 million on cost of revenue, including data centers, bandwidth, and associated salaries
- $427 million on marketing and sales
- $388 million on research and development
- $280 million on general and administrative costs
- $695 million on income taxes