Quarterly Earnings Slides

Q1 2014

Non-GAAP Measures
In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation of non-GAAP financial measures to the corresponding GAAP measures is provided in the appendix to this presentation.

2

Daily Active Users (DAUs)
In Millions
Rest of World Asia Europe US & Canada

526 126 119 152 129

552 139 129 154 130

584 152 141 160 132 Q3'12
Q3'12 58%

618 161 153

665 180

699 195

728 208

757 216

802 233

167

181

189

200

216

169 135 Q4'12
Q4'12 59%

179 139 Q1'13
Q1'13 60%

182

188

195

203

142 Q2'13
Q2'13 61%

144 Q3'13
Q3’13 61%

147 Q4'13
Q4'13 62%

150 Q1'14
Q1'14 63%

Q1'12
DAUs / MAUs
Q1'12 58%

Q2'12
Q2'12 58%

Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.

3

Mobile Daily Active Users (Mobile DAUs)
In Millions
609 556 425 293 329 374 469 507

266

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.

4

Monthly Active Users (MAUs)
In Millions
Rest of World Asia Europe US & Canada

901 245 234 239 183 Q1'12

955 268

1,007 288

1,056 304

1,110 327

1,155 346

1,189

1,228

1,276

362

376

395

255

277

298

319

339

351

368

390

246 186 Q2'12

253 189 Q3'12

261 193 Q4'12

269 195 Q1'13

272 198 Q2'13

276 199 Q3'13

282 201 Q4'13

289 202 Q1'14

Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.

5

Mobile Monthly Active Users (Mobile MAUs)
In Millions
945 1,008

488

543

604

680

751

819

874

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Please see Facebook's most recent quarterly or annual report filed with the SEC for definitions of user activity used to determine the number of our DAUs, mobile DAUs, MAUs, and mobile MAUs. The number of DAUs, mobile DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.

6

Mobile-Only Monthly Active Users (Mobile-Only MAUs)
In Millions
341 296 254 219 189

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Mobile-only MAUs are defined as users who accessed Facebook solely through mobile apps or our mobile website, or used our Messenger app, in the last 30 days of the given quarter. The number of mobile-only MAUs do not include Instagram users unless they would otherwise qualify as such users based on their other activities on Facebook.

7

Revenue
In Millions
Payments and other fees Advertising

$2,585 $241 $2,016 $1,813 $1,585 $1,458 $213
$2,344 $1,798

$2,502 $237

$218

$214

$1,184 $1,058 $186 $192

$1,262 $176

$256 *

$2,265

$1,599 $1,329 $872 $992 $1,086 $1,245

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

*In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of our Form 10-K filed on February 1, 2013.

8

Revenue by User Geography
In Millions
Rest of World Asia Europe US & Canada

$2,585 $311 $2,016 $1,813 $1,585 $213 $1,458 $159 $197 $423 $962 $1,206 $247 $505 $538 $167 $198 $440 $238 $278 $727 $341

$2,502 $271 $354

$698

$1,058 $87 $118 $328

$1,184 $113 $135 $346

$1,262 $130 $154 $341

$1,179

$525 Q1'12

$590 Q2'12

$637

$780

$679

$848

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenuegenerating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer.

9

Advertising Revenue by User Geography
In Millions
Rest of World Asia Europe US & Canada

$2,344 $300 $1,798 $1,599 $1,329 $202 $1,245 $150 $176 $367 $721 $832 $1,068 $225 $451 $482 $229 $255 $658 $318

$2,265 $262 $333

$872 $79 $99 $274 $419 Q1'12

$992 $104 $115 $294 $479 Q2'12

$1,086 $120 $133 $295

$156 $168 $374

$631

$1,039

$538 Q3'12

$631

$552 Q1'13

Q4'12

Q2'13

Q3'13

Q4'13

Q1'14

Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenuegenerating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer.

10

Payments & Other Fees Revenue by User Geography
In Millions
Rest of World Asia Europe US & Canada

$256 $11 $30 $192 $9 $20 $52 $176 $10 $21 $46 $149 $66

$186 $8 $19 $54

$213 $9 $21 $56

$214 $11 $22 $54

$218 $9 $23 $56

$241 $11 $23 $69

$237 $9 $21 $67

$106

$111

$99

$127

$127

$130

$138

$140

Q1'12

Q2'12

Q3'12

Q4'12*

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer. *In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of our Form 10-K filed on February 1, 2013.
11

Average Revenue per User (ARPU)
Worldwide
Payments Advertising
$1.35 $0.20 $1.60 $0.19 $1.72 $0.19 $2.14 $0.20 $2.00 $0.19 $3.50 $0.65 $1.94 $1.15 $1.41 $1.53 $1.81 $2.85 $5.34 $3.67 $4.19 $5.16

US & Canada
$4.32 $0.65 $4.85 $0.65

$6.03 $0.69

$5.85 $0.69

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Europe
$1.87 $1.60 $0.21 $0.20 $1.96 $0.20

$2.61 $0.25

Asia
$2.44 $0.23 $0.75 $0.64 $0.07 $0.07 $0.81 $0.07 $0.95 $0.06 $0.93 $0.06

Rest of World
$0.84 $0.03 $0.50 $0.03 $0.74 $0.88 $0.88 $0.48 $0.60 $0.63 $0.03 $0.67 $0.03 $0.70 $0.02

$2.36 $1.38 $1.67 $1.76

$2.21 $0.57 $0.68

$0.65

$0.81

$0.68

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer. Please see Facebook’s most recent quarterly or annual report filed with the SEC for the definition of ARPU.

12

Share-Based Compensation Expense
In Millions
Pre-2011 RSUs Post-2011 RSUs Options & Other

$1,106

$986

$103 $97 Q1'12 $113 Q2'12

$179 $28 $138 Q3'12

$184 $24 $137 Q4'12

$170 $9 $135 Q1'13

$224 $17 $175 Q2'13

$239 $14 $193 Q3'13

$273 $11 $228

$274 $11 $231

Q4'13

Q1'14

13

Expenses as a % of Revenue
Share-based compensation + Payroll tax related to share-based compensation All other expenses

Cost of Revenue
28% 26% 25% 19% 28% 25% 25% 18%

Research & Development
20% 9% 19% 9% 18% 9% 18% 8%

16% 7% 9% Q4'13

19%

18%

11% Q1'13

10% Q2'13

10% Q3'13

10% Q1'14

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Marketing & Sales
14% 12% Q1'13 15% 13% Q2'13 12% 10% Q3'13 11% 10% Q4'13 13% 11% Q1'14

General & Administrative
12% 10% Q1'13

10% 8% Q2'13

8% 7% Q3'13

10% 6% Q4'13

7% 6% Q1'14

14

Income (Loss) from Operations
GAAP Income (Loss) from Operations (In Millions) $1,133 $1,075

$381

$377

$523

$373

$562

$736

Q1'12

($743)
Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Non-GAAP Income from Operations (In Millions) $1,459 $515 $525 $736 $563 $794 $987 $1,374

$485

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Non-GAAP income from operations excludes share-based compensation expense and payroll tax expenses related to share-based compensation—see the Appendix for a reconciliation of this non-GAAP measure to GAAP income (loss) from operations.

15

Operating Margin
GAAP Operating Margin 36% 30% 33% 26% 31% 37% 44% 43%

(63%)
Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14

Non-GAAP Operating Margin 46% 46% 49% 56% 55%

43%

42%

39%

44%

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Non-GAAP operating margin excludes share-based compensation expense and payroll tax expenses related to share-based compensation—see the Appendix for a reconciliation of this non-GAAP measure to GAAP operating margin.

16

Effective Tax Rate
GAAP Effective Tax Rate
($ in millions) GAAP income before provision for income taxes GAAP provision for from income taxes Effective Tax Rate Q1 2013 $ 353 134 38% Q2 2013 $ 545 212 39% Q3 2013 $ 726 301 41% Q4 2013 $ 1,130 607 54% Q1 2014 $ 1,075 433 40%

Non-GAAP Effective Tax Rate
($ in millions) Non-GAAP income before provision for income taxes Non-GAAP provision for income taxes Effective Tax Rate Q1 2013 543 231 43% Q2 2013 777 289 37% Q3 2013 977 356 36% Q4 2013 1,456 676 46% Q1 2014 1,374 489 36%

17

Net Income (Loss)
GAAP Net Income (Loss) (In Millions)

$205 ($157) Q1'12 Q2'12 ($59) Q3'12

$64

$219

$333

$425

$523

$642

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Non-GAAP Net Income (In Millions) $780 $885

$287

$295

$311

$426

$312

$488

$621

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Non-GAAP net income excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and related income tax adjustments—see the Appendix for a reconciliation of this non-GAAP measure to GAAP net income (loss).

18

Diluted Earnings (Loss) Per Share
GAAP Diluted Earnings (Loss) Per Share $0.20 $0.25

$0.09 ($0.02) Q1'12 ($0.08) Q2'12 Q3'12

$0.03

$0.09

$0.13

$0.17

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Non-GAAP Diluted EPS $0.31 $0.34

$0.12

$0.12

$0.12

$0.17

$0.12

$0.19

$0.25

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Non-GAAP diluted earnings per share excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and related income tax adjustments—see the Appendix for a reconciliation of this non-GAAP measure to GAAP diluted earnings (loss) per share.

19

Capital Investments
In Millions
Property and equipment acquired under capital leases Purchases of property and equipment

$1,575 $340 $1,079 $473 $1,235 $1,362 $1,373

$338 $327 Q1'13 Quarterly

$363 $606 $363 Q1'14 2011 2012 Annual 2013

20

Appendix

Reconciliations
Income (Loss) from Operations (in millions) GAAP income (loss) from operations Share-based compensation expense Payroll tax expenses related to share-based compensation Non-GAAP income from operations $ Q1'12 381 103 1 $ 485 $ Q2'12 (743) 1,106 152 $ 515 $ Q3'12 377 179 (31) $ 525 $ Q4'12 523 184 29 $ 736 $ Q1'13 373 170 20 $ 563 $ Q2'13 562 224 8 $ 794 $ Q3'13 736 239 12 $ 987 Q4'13 $ 1,133 273 53 $ 1,459 Q1'14 $ 1,075 274 25 $ 1,374

Operating Margin GAAP operating margin Share-based compensation expense Payroll tax expenses related to share-based compensation Non-GAAP operating margin

Q1'12 36% 10% 0% 46%

Q2'12 (63%) 93% 13% 43%

Q3'12 30% 14% (2%) 42%

Q4'12 33% 12% 2% 46%

Q1'13 26% 12% 1% 39%

Q2'13 31% 12% 0% 44%

Q3'13 37% 12% 1% 49%

Q4'13 44% 11% 2% 56%

Q1'14 43% 11% 1% 55%

Net Income (Loss) (in millions) GAAP net income (loss) Share-based compensation expense Payroll tax expenses related to share-based compensation Income tax adjustments Non-GAAP net income

$

Q1'12 205 103 1 (22) $ 287

$

Q2'12 (157) 1,106 152 (806) $ 295

$

Q3'12 (59) 179 (31) 222 $ 311

$

Q4'12 64 184 29 149 $ 426

$

Q1'13 219 170 20 (97) $ 312

$

Q2'13 333 224 8 (77) $ 488

$

Q3'13 425 239 12 (55) $ 621

$

Q4'13 523 273 53 (69) $ 780

Q1'14 642 274 25 (56) 885 $ $

Diluted Earnings (Loss) Per Share GAAP diluted earnings (loss) per share Net income attributable to participating securities Non-GAAP adjustments to net income (loss) Non-GAAP adjustments to diluted shares Non-GAAP diluted earnings per share

$

Q1'12 0.09 0.04 0.05 (0.06) $ 0.12

$

Q2'12 (0.08) 0.24 (0.04) $ 0.12

$

Q3'12 (0.02) 0.15 (0.01) $ 0.12

$

Q4'12 0.03 0.14 $ 0.17

$

Q1'13 0.09 0.03 $ 0.12

$

Q2'13 0.13 0.06 $ 0.19

$

Q3'13 0.17 0.08 $ 0.25

$

Q4'13 0.20 0.11 $ 0.31

$

Q1'14 0.25 0.09 $ 0.34

22

Reconciliations (continued)
Effective Tax Rate (in millions) GAAP income before provision for income taxes GAAP provision for income taxes GAAP effective tax rate GAAP income before provision for income taxes Share-based compensation and related payroll tax expenses Non-GAAP income before provision for income taxes Non-GAAP provision for income taxes Non-GAAP effective tax rate Q1'13 $ 353 134 38% $ $ 353 190 543 231 43% Q2'13 $ 545 212 39% $ $ 545 232 777 289 37% Q3'13 $ 726 301 41% $ $ 726 251 977 356 36% Q4'13 $ 1,130 607 54% $ 1,130 326 $ 1,456 676 46% Q1'14 $ 1,075 433 40% $ 1,075 299 $ 1,374 489 36%

23

Reconciliations (continued)
Free Cash Flow (in millions) Net cash provided by operating activities Purchases of property and equipment Property and equpiment acquired under capital leases Free Cash Flow Q1'12 441 453 38 $ (50) $ Q2'12 240 413 52 $ (225) $ Q3'12 250 171 161 $ (82) $ Q4'12 681 198 89 $ 394 $ Q1'13 719 327 11 $ 381 $ Q2'13 $ 1,322 268 $ 1,054 Q3'13 950 284 $ 666 $ Q4'13 $ 1,231 483 $ 748 Q1'14 $ 1,285 363 $ 922

24

Limitations of Key Metrics and Other Data
The numbers for our key metrics, which include our daily active users (DAUs), mobile DAUs, monthly active users (MAUs), mobile MAUs, and average revenue per user (ARPU), as well as certain other metrics such as mobile-only MAUs, are calculated using internal company data based on the activity of user accounts. While these numbers are based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring usage of our products across large online and mobile populations around the world. For example, there may be individuals who maintain one or more Facebook accounts in violation of our terms of service, despite our efforts to detect and suppress such behavior. We estimate, for example, that “duplicate” accounts (an account that a user maintains in addition to his or her principal account) may have represented between approximately 4.3% and 7.9% of our worldwide MAUs in 2013. We also seek to identify “false” accounts, which we divide into two categories: (1) user-misclassified accounts, where users have created personal profiles for a business, organization, or non-human entity such as a pet (such entities are permitted on Facebook using a Page rather than a personal profile under our terms of service); and (2) undesirable accounts, which represent user profiles that we determine are intended to be used for purposes that violate our terms of service, such as spamming. In 2013, for example, we estimate user-misclassified accounts may have represented between approximately 0.8% and 2.1% of our worldwide MAUs and undesirable accounts may have represented between approximately 0.4% and 1.2% of our worldwide MAUs. We believe the percentage of accounts that are duplicate or false is meaningfully lower in developed markets such as the United States or the United Kingdom and higher in developing markets such as India and Turkey. However, these estimates are based on an internal review of a limited sample of accounts and we apply significant judgment in making this determination, such as identifying names that appear to be fake or other behavior that appears inauthentic to the reviewers. As such, our estimation of duplicate or false accounts may not accurately represent the actual number of such accounts. We are continually seeking to improve our ability to identify duplicate or false accounts and estimate the total number of such accounts, and such estimates may be affected by improvements or changes in our methodology. Due to inherent variability in such estimates at particular dates of measurement, we disclose these estimates as a range over a recent period.

25

Limitations of Key Metrics and Other Data (cont.)
Our data limitations may affect our understanding of certain details of our business. For example, while user-provided data indicates a decline in usage among younger users, this age data is unreliable because a disproportionate number of our younger users register with an inaccurate age. In the third quarter of 2013, we worked with third parties to develop models to analyze user data by age in the United States. These models suggested that usage by U.S. teens overall was stable, but that DAUs among younger U.S. teens had declined. The data and models we are using are not precise and our understanding of usage by age group may not be complete. Some of our historical metrics through the second quarter of 2012 were also affected by applications on certain mobile devices that automatically contact our servers for regular updates with no user action involved, and this activity can cause our system to count the user associated with such a device as an active user on the day such contact occurs. For example, we estimate that less than 5% of our estimated worldwide DAUs as of December 31, 2011 resulted from this type of automatic mobile activity, and that this type of activity had a substantially smaller effect on our estimate of worldwide MAUs and mobile MAUs. The impact of this automatic activity on our metrics varies by geography because mobile usage varies in different regions of the world. In addition, our data regarding the geographic location of our users is estimated based on a number of factors, such as the user’s IP address and self-disclosed location. These factors may not always accurately reflect the user’s actual location. For example, a mobile-only user may appear to be accessing Facebook from the location of the proxy server that the user connects to rather than from the user’s actual location. The methodologies used to measure user metrics may also be susceptible to algorithm or other technical errors. For example, in early June 2012, we discovered an error in the algorithm we used to estimate the geographic location of our users that affected our attribution of certain user locations for the period ended March 31, 2012. While this issue did not affect our overall worldwide DAU and MAU numbers, it did affect our attribution of users across different geographic regions. We estimate that the number of MAUs as of March 31, 2012 for the United States & Canada region was overstated as a result of the error by approximately 3% and this overstatement was offset by understatements in other regions. The number of such users for the period ended March 31, 2012 presented herein reflect the reclassification to more correctly attribute users by geographic region. Our estimates for revenue by user location are also affected by these factors. We regularly review and may adjust our processes for calculating these metrics to improve their accuracy. In addition, our MAU and DAU estimates will differ from estimates published by third parties due to differences in methodology. For example, some third parties are not able to accurately measure mobile users or do not count mobile users for certain user groups or at all in their analyses. The numbers of DAUs, mobile DAUs, MAUs, mobile MAUs, and mobile-only MAUs represented in these slides, as well as ARPU, do not include users of Instagram unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.

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