FACEBOOK DETAILS LEAKED: Company Is Much More Profitable Than Everyone Thought

January 6, 2011 3:49 a.m.

Some financial details from the Facebook stock deal are starting to leak out, with the WSJ having scooped up the tidbits below:
Facebook generated $200 million of net income in 2009, on $777 million of revenue.
This approximate revenue figure was known, but the net income figure was not. The 25% net profit margin implied by these figures is much higher than most people thought.
(This is a VERY high net margin for such a young company. It’s not quite in Google’s league, but it’s close*).
Facebook’s revenue last year soared to ~$2 billion with $400 million of profit, according to DealBook. That’s a lower profit margin (20%), but it’s still plenty impressive.
Once Goldman Sachs and Facebook release the full offering document, which we expect will be today, we expect additional details will come out. For those considering investment or assessing the company’s future growth potential, analyzing the revenue and cost structure will be important.
See Also: Secret Facebook Offering Email Revealed

* Google had a 30% net margin in Q3 2010. That’s after-tax profit as a percentage of gross revenue. It’s possible that the WSJ blew it on the Facebook number and is actually referring to operating profit (pre-tax), not net profit, but the article says “net income.”
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The original version of the story appears here: http://www.businessinsider.com/facebook-details-leaked-company-is-much-more-profitable-than-everyone-thought-2011-1

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