Facebook Inc Earnings Model (Chand & Shah)
Author: Yukta Chand & Kenny Shah, Published: July 27, 2020 9:04pm, Category: Earnings Preview (Prior to the 2Q2019 earnings release)
Model Summary: In this Facebook Inc. (NASDAQ: FB) earnings model and our earnings report, we explained the effects of Covid 19, Facebook advertisement boycotts, and several other factors through the 4 quarters of the Income Statement, specifically in the Monthly Active Users (MAUs) and Average Revenue per User (ARPU). Given that companies began to pull back on advertising during Covid 19, advertising being the source of Facebook’s business model, had an effect on the ARPU; however, we predicted future revenue growth due to the drastic increase in MAUs because of the quarantine orders enforced around the world beginning in March 2020. Additionally, our predictions for total expenses and full-year 2020 tax rate were within the range that Facebook management had guided. We predict that by 2021, the uncertainties of 2020 will subside and the model will return similar to its 2019 trends...Refer to Yukta and Kenny's full report attached below for details on their model drivers.
Disclosure of Potential Conflicts of Interest: The author of this article/model has no financial investment or other conflict of interest related to the subject company or other companies discussed. Any views made or implied in the content represent the author’s opinions.