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Facebook’s Second Quarter Expenses Increased 295%

[Techtaffy Newsdesk]

Facebook reported its first bout of results as a public entity. The company’s comparatively tepid growth reflected in the second quarter (which ended June 30, 2012) financial results and a $157 million loss was perhaps not the best debut.

Facebook’s revenues for the second quarter totaled $1.18 billion, an increase of 32%, compared with $895 million in the second quarter of 2011. Revenue from advertising was $992 million, representing 84% of total revenue and a 28% increase from the same quarter last year. Payments and other fees revenue for the second quarter was $192 million.

Mark Zuckerberg  (Founder and CEO, Facebook): Our goal is to help every person stay connected, and every product they use be a great social experience. That’s why we’re so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends.

Second quarter costs and expenses were $1.93 billion, an increase of 295% from the second quarter of 2011, driven primarily by share-based compensation expense. Share-based compensation expense related to pre-2011 restricted stock units (RSUs) was not recognized in advance of the initial public offering, and as a result of the initial public offering during the second quarter, the company recognized $1.3 billion of share-based compensation and related payroll tax expenses.

For the second quarter, loss from operations was $743 million, compared to income from operations of $407 million for the second quarter of 2011. Operating margin was negative 63% for the second quarter of 2012, compared to 45% for the second quarter of 2011.

Net loss for the second quarter was $157 million, compared to net income of $240 million for the second quarter of 2011. Earnings per share for second quarter of 2012 was 8 cents, largely reflecting the effect of the accounting treatment of pre-2011 RSUs.

Capital expenditures for the quarter were $413 million, a 213% year-over-year increase. Additionally, $52 million of equipment was procured or financed through capital leases during the second quarter of 2012.

Cash and marketable securities grew to $10.2 billion, which includes $6.8 billion in net proceeds from our initial public offering.

Capital expenditures for the quarter were $413 million, a 213% year-over-year increase. Additionally, $52 million of equipment was procured or financed through capital leases during the second quarter of 2012.

Cash and marketable securities grew to $10.2 billion, which includes $6.8 billion in net proceeds from our initial public offering.

The income tax benefit for the second quarter was $608 million, representing a 79% effective tax rate. The company reported an income tax benefit as a result of the pre-tax loss in the second quarter.

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