Facebook’s S-1 Shows a Weak Q1

Facebook released its latest S-1 filing Monday, and it was a bit of a downer.

The company actually showed a slowdown in business on a sequential basis, with declines in first-quarter earnings and revenues. Net income fell from $302 million last quarter to $205 million this quarter, and its $1.06 billion in revenues were down from the previous period’s $1.13 billion.

Year-over-year, revenues actually were up about 45%, though not as strong as December’s 54% YOY growth, and net income actually declined about 12%. The S-1 does say that the first quarter usually is low because of seasonality, as there’s not as much advertising as in other quarters.

A few other tidbits from the S-1:

• Facebook spent about $1 billion — $300 million in cash and 23 million shares (valued at $30.89) — for Instagram. The transaction also includes a $200 million break-up fee.
• Zynga (NASDAQ:ZNGA) accounted for 15% of Q1 revenue. Interestingly enough, this was seen as good news for the stock — ZNGA shares erased some of its losses from earlier Monday to finish down about 2%. Investors might be a bit more optimistic about Zynga’s Q1.
• Over the past year, the company’s headcount increased by over 1,000 people to 3,539.
• Facebook has 901 million monthly users (DAUs), 500 million mobile users and 300 million photo uploads a day.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.