Facebook IPO

Open Source Financial Model

© Neev Knowledge Management - Pristine www.edupristine.com info@edupristine.com

Pristine is India's largest authorized training provider for CFA ®, FRM ® , PRM and Financial Modeling. It has conducted more than 500,000+ man-hours of finance trainings for individuals and corporates in all the major Indian cities and outside India.

IPO

Model

nowledge Management - Pristine

Modeling. It has conducted more ndian cities and outside India.

Facebook IPO has generated enormous interest in the investor community (both retail and institutional)throughout world. Many p investors want a financial model in MS Excel© which can help them in a thorough analysis of the company. Creating such mode always been a time-taking and daunting exercise.

Pristine has created an integrated valuation model based on publically available information. It is available as an open-source m user. Kindly note that this model is meant for information purpose only.

The complete structure of the model and formulas, linkages etc. have been kept open to allow for any modification on the part o

Pristine conducts extensive trainings for financial modeling in MS Excel©. These trainings are targeted towards investors/ profes are looking for a career in finance (Investment Banking, PE, Broking, Equity Research, etc.). At the completion of the trainings, t participants should be able to create models like these. For more information you can contact the authors or Pristine.

© Neev Knowledge Management www.edupristine.com info@edupristine.com

Pristine is India's largest authorized training provider for CFA®, FRM®, PRM and Financial Modeling. It has conducted more tha man-hours of finance trainings for individuals and corporates in all the major Indian cities and outside India.

stitutional)throughout world. Many potential he company. Creating such models have

t is available as an open-source model for any

w for any modification on the part of the user.

targeted towards investors/ professionals who At the completion of the trainings, the

© Neev Knowledge Management - Pristine www.edupristine.com info@edupristine.com

odeling. It has conducted more than 500,000+ outside India.

Income Statement

All numbers are in $ million unless mentioned otherwise Revenue Advertising revenue Payments and other fees revenue Total Revenue Cost & Expenses Cost of revenue* Marketing and sales Research and development General and administrative Income from Operarion Interest expense Other income (expense), net Income before provision for income taxes Provision for income taxes Net Income * Cost of Services include depreciation and Amortizaton Expenses Depreciation & Amortization

FY 2009 764 13 777 223 115 87 90 262 (10) 2 254 25 229

FY 2010 1,868 106 1,974 493 184 144 121 1,032 (22) (2) 1,008 402 606

FY 2011 3,154 557 3,711 860 427 388 280 1,756 (42) (19) 1,695 695 1,000

78

139

323

FY 2012 5,231 557 5,788 1,483 687 695 487 2,436 (68) (7) 2,361 968 1,393

FY 2013 8,518 557 9,075 2,231 989 1,270 668 3,915 (104) (22) 3,790 1,554 2,236

FY 2014 13,615 557 14,172 3,467 1,620 2,268 1,102 5,717 (163) (41) 5,512 2,260 3,252

FY 2015 21,355 557 21,912 5,453 2,498 3,944 1,721 8,295 (253) (48) 7,994 3,278 4,716

FY 2016 32,853 557 33,410 8,234 3,756 6,682 2,561 12,177 (384) (84) 11,709 4,801 6,908

497

736

1,200

1,839

2,782

Balance Sheet

All numbers are in $ million unless mentioned otherwise Assets Current Assets: Cash and Cash Equivalents Marketable Securities Accounts Receivable Prepaid Expenses and Other Current Assets Total Current Assets Non-Current Assets: Property and Equipment, net Intangible Assets, net Goodwill Other Assets Total Assets Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable Platform partners payable Accrued expenses and other current liabilities Deferred revenue and deposits Current portion of capital lease obligations Total current liabilities Non-Current Liabilities: Capital lease obligations, less current portion Long-term debt Other liabilities Total liabilities Stockholders’ equity Convertible preferred stock Common stock Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders’ equity Total Liabilities and Stockholders’ Equity

FY 2010

FY 2011

1,785 373 88 2,246 574 59 37 74 2,990

1,512 2,396 547 149 4,604 1,475 80 82 90 6,331

29 75 137 42 106 389 117 250 72 828 615 947 (6) 606 2,162 2,990 TRUE

63 171 296 90 279 899 398 135 1,432 615 2,684 (6) 1,606 4,899 6,331 TRUE

Retained Earnings Opening Balance Add: Net Income Less: Dividend Paid Less: Other Transfer Clossing Retained Earnings

606

606 1,000 1,606

FY 2012

FY 2013

FY 2014

FY 2015

FY 2016

1,199 2,396 1,264 252 5,111 1,992 149 82 179 7,513

2,534 2,396 1,281 427 6,638 3,365 215 82 250 10,549

3,685 2,396 2,924 723 9,728 5,066 350 82 414 15,640

7,936 2,396 3,399 1,225 14,956 7,979 529 82 622 24,168

14,481 2,396 6,377 2,074 25,328 12,054 816 82 962 39,242

104 267 640 90 279 1,379 322 135 1,836 2,684 (6) 2,999 5,677 7,513 TRUE

141 382 1,382 90 279 2,274 228 135 2,637 2,684 (6) 5,235 7,913 10,549 FALSE

244 633 2,985 90 279 4,231 109 135 4,475 2,684 (6) 8,487 11,165 15,640 TRUE

358 958 6,450 90 279 8,135 17 135 8,287 2,684 (6) 13,203 15,881 24,168 TRUE

553 1,449 13,936 90 279 16,308 11 135 16,454 2,684 (6) 20,111 22,789 39,242 TRUE

1,606 1,393 2,999

2,999 2,236 5,235

5,235 3,252 8,487

8,487 4,716 13,203

13,203 6,908 20,111

Cash Flow Statement

All numbers are in $ million unless mentioned otherwise Cash Flow from Operating Net Income Accounts Receivable Prepaid Expenses and Other Current Assets Accounts payable Platform partners payable Accrued expenses and other current liabilities Deferred revenue and deposits Cash Flow From Operation Cash Flow from Investment Property and Equipment Intangible Assets Goodwill Marketable Securities Other Assets Cash from Investing Activities Cash Flow from Financing Capital lease obligations Long-term debt Other liabilities Convertible preferred stock Common stock Additional paid-in capital Accumulated other comprehensive loss Retained earnings Cash from Financing Activities Net Change in Cash Cash Balance Opening Balance Net Change in Cash Closing Balance

FY 2010

FY 2011 1,000 (174) (61) 34 96 159 48 1,102

(901) (21) (45) (2,396) (16) (3,379)

454 (250) 63 1,737 2,004 (273)

1,785

1,785 (273) 1,512

FY 2012 1,393 (717) (103) 41 96 344 0 1,052

FY 2013 2,236 (17) (175) 38 115 742 0 2,939

FY 2014 3,252 (1,643) (296) 102 252 1,604 0 3,271

FY 2015 4,716 (475) (501) 114 324 3,465 0 7,643

FY 2016 6,908 (2,978) (849) 195 492 7,486 0 11,253

(517) (69) (89) (674)

(1,373) (66) (71) (1,510)

(1,701) (135) (164) (2,000)

(2,913) (180) (208) (3,300)

(4,075) (287) (340) (4,702)

(76) (615) (691) (313)

(94) (94) 1,335

(119) (119) 1,151

(92) (92) 4,251

(6) (6) 6,545

1,512 (313) 1,199

1,199 1,335 2,534

2,534 1,151 3,685

3,685 4,251 7,936

7,936 6,545 14,481

Assumption

All numbers are in $ million unless mentioned otherwise P&L Drivers Revenue Growth Advertising revenue Payments and other fees revenue Cost of Revenue as % of Revenues Sales and marketing as % of Revenues Research and development as % of Revenue General and administrative as % of Revenue Interest Expese as % of Revenue Other Income(expense), net Provision for income taxes Depreciation & Amortization as % of Revenue B/S Drivers Days of Accounts Receivable Prepaid Expenses and Other Current Assets Property and Equipment as % of Revenue Intangible Assets as % of Revenue Other Assets as % of Revenue Accounts payable in Days Platform partners payable in Days Accrued expenses and other current liabilities Capital lease obligations, less current portion

FY 2009

FY 2010

FY 2011

29% 15% 11% 12% -1% 0.3% 10% 10%

145% N/M 25% 9% 7% 6% -1% -0.1% 40% 7%

69% N/M 23% 12% 10% 8% -1% -0.5% 41% 9%

69 29% 3% 4% 21 56

45 69% 40% 2% 2% 20 52 116%

* N/M - Not Material

FY 2012

FY 2013

FY 2014

FY 2015

FY 2016

66% N/M 26% 12% 12% 8% -1% -0.1% 41% 9%

63% N/M 25% 11% 14% 7% -1% -0.2% 41% 8%

60% N/M 24% 11% 16% 8% -1% -0.3% 41% 8%

57% N/M 25% 11% 18% 8% -1% -0.2% 41% 8%

54% N/M 25% 11% 20% 8% -1% -0.3% 41% 8%

57 69% 34% 3% 3% 20 54 116% 322

51 69% 37% 2% 3% 20 53 116% 228

54 69% 36% 2% 3% 20 53 116% 109

53 69% 36% 2% 3% 20 53 116% 17

53 69% 36% 2% 3% 20 53 116% 11 (given in the S1)

Valuation Risk free rate Beta Expected return from market Cost of equity Tax Rate Terminal Growth Rate No. of Equity Shares
All numbers are in $ million, except per share data

2% 1.20 9% 10% 41% 3%

FY 2009

FY 2010

FY 2011

DCF Valuation using FCFF Net Income Add: Depreciation Add: Interest*(1-tax rate) Less: Capex Less: Increase in Working Capital Free Cashflow to the Firm (FCFF) Less: Interest*(1-tax rate) Add: Net Borrowing Free Cash Flow to the Equity (FCFE) Terminal Value No. of Years Total Present Value of cash flow Equity Value 81,804

FY 2012 1,393 497 40 (586) 102 1,447 (40) (76) 1,331

FY 2013 2,236 736 61 (1,439) (341) 1,254 (61) (94) 1,099

FY 2014 3,252 1,200 96 (1,836) 704 3,416 (96) (119) 3,201

FY 2015 4,716 1,839 150 (3,092) 18 3,631 (150) (92) 3,389

FY 2016 6,908 2,782 227 (4,362) 2,927 8,481 (227) (6) 8,249 114,812 5 75,037

1 1,205

2 901

3 2,379

4 2,282

This open source financial model is for information purposes only. Due efforts have been taken by Pristine and its employees in of this model to ensure that the information is accurate to the best of their knowledge and belief. The primary source of informat contained in the report has been the S1 of the company with SEC. Pristine, makes no representations or warranties regarding th or completeness of such information and expressly disclaims any and all liabilities based on such information or on omissions th

The analysts who compiled this open source financial model hereby state that the contents in the document reflect his/her/their opinions on the subject matter. Pristine, and its employees/ analysts do conduct trainings and from time to time to seek establish or financial relationships with companies covered in the open research models. As a result, investors should be aware that Prist such individuals may have conflicts of interests that could affect the objectivity of this report.

© Neev Knowledge Management www.edupristine.com info@edupristine.com

Pristine is India's largest authorized training provider for CFA®, FRM®, PRM and Financial Modeling. It has conducted more tha man-hours of finance trainings for individuals and corporates in all the major Indian cities and outside India.

en by Pristine and its employees in preparation ef. The primary source of information entations or warranties regarding the accuracy uch information or on omissions there from.

the document reflect his/her/their views and from time to time to seek establish business vestors should be aware that Pristine and/or

© Neev Knowledge Management - Pristine www.edupristine.com info@edupristine.com

odeling. It has conducted more than 500,000+ outside India.

Sign up to vote on this title
UsefulNot useful