Facebook made $205M on $1.06B in revenue in Q1

Social networking powerhouse Facebook has updated its prospectus to include financial information from the first quarter of 2012, revealing to investors and the world that it made $205 million in net income on $1.06 billion in revenue during the first three months of the year.

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The $1.06 billion revenue figure represents 45 percent year-over-year growth, but Facebook’s net income, or profit, actually dipped by $28 million from the first quarter of 2011. Also of note, Facebook made $1.13 billion in revenue in the fourth quarter of 2011, meaning that it made 6 percent less in total revenue in Q1 2012, a notable difference the company attributes to seasonal trends in advertising spend.

In the amended S-1, Facebook said it made 82 percent of revenue for Q1 2012 from its advertising business, spelling out that it made $872 million from ads and $186 million from its payments business. The former business, though still the company’s primary source of income, is showing a downward trend, while the latter business is booming thanks to forced adoption.

“Payments and other fees revenue in the first quarter of 2012 increased to $186 million, or 98%, compared to the first quarter of 2011,” the company said. “Facebook Payments became mandatory for all game developers accepting payments on the Facebook Platform with limited exceptions on July 1, 2011. Accordingly, comparisons of Payments and other fees revenue to periods before this date may not be meaningful.”

Casual game-maker Zynga, still a major contributor to Facebook’s bottom line, directly and indirectly accounted for roughly 15 percent of revenue combined across payments processing fees (11 percent) and display ads (4 percent) for the first quarter of 2012.

Facebook shared another interesting figure with investors: The company has calculated the average revenue per user (ARPU) at $1.21 for the first quarter of the year, which is up 6 percent from a year ago but down 12 percent from the fourth quarter of 2011.

But the takeaway is that Facebook’s quarterly revenue fell sequentially for the first time, Sam Hamedeh, CEO of financial data company PrivCo, told VentureBeat. Hamadeh characterized the quarterly earnings as “awful.”

“[Earnings are] worse than the worst case scenario of at least flat sequential revenues with Q4,” Hamadeh said. “And on top of pulling out all the stops to window dress this quarter with Facebook Timeline, up to seven ads per page, larger ad formats, and sponsored news feeds.”

Facebook, for its part, defended the decline in revenue as normal for its business. “We believe that this seasonality in advertising spending affects our quarterly results, which generally reflect strong growth in advertising revenue between the third and fourth quarters and slower growth, and for certain years a decline, in advertising spending between the fourth and subsequent first quarters,” the company said. “The rapid growth in our business may have partially masked these seasonal trends to date and the seasonal impacts may be more pronounced in the future.”

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In the prospectus, the social network also updated figures on activity levels, indicating that it now has 901 million monthly active users and sees 300 million photos uploaded to Facebook each day. Members generated 3.2 billion “likes” and comments per day during the first quarter of 2012, Facebook said.

Last year, Facebook made $1 billion on $3.7 billion in total revenue.