For the first time ever, Facebook disclosed financial results of WhatsApp for the first time today and it wasn’t all rainbows and pearls.
In 6 months ending June 30th, 2014, WhatsApp garnered $15.921 million in revenue, but had a net loss of $232.5 million, $206.5 million of which was share based compensation expense and issuance of common stock below fair value. The company actually only spent $13.5 million in the first half of the year for normal operations, which would have netted a roughly $400,000 gain.
Last year, WhatsApp had $10.2 million in revenue with a net loss of $138.146 million. Net cash used in operating during this period was only $9.9 million.
Facebook also broke down what it was paying for when it bought WhatsApp earlier this year:
- $2.026 billion for the user base
- $448 million for the brand
- $288 for technology
- $21 million for other
- $15.314 billion for “future growth, from potential monetization opportunities, from strategic advantages provided in the mobile ecosystem from expansion of our mobile messaging offerings”
Facebook CEO Mark Zuckerberg has continued to state that it was more interested in growth before monetization as it hopes to continue positive growth, maybe even hitting 3 billion users at some point in the future.
WhatsApp CEO Jan Koum and Zuckerberg want to grow WhatsApp to lock out its growing competition and then once it’s solidified its position as the world’s top messaging application, that’s when the monetization can begin.
Do you think WhatsApp will be able to reach 3 billion users?