How Important Is North America For Facebook’s Growth?
Facebook (NASDAQ:FB) currently has 87% of its 1.65 billion monthly active users in international markets, but derives most of its revenues from the U.S. and Canada. In fact, the U.S. and Canada contribute 51% of the company’s top line with only 13% of its monthly active user base. This is due to the high average revenue per user (ARPU) in these markets ($12.43) compared to Europe ($3.98) and Asia-Pacific ($1.56). Notwithstanding the large revenue base, North America was also the fastest growing market in the first quarter this year, with sales growing 72% year-over-year to over $2.7 billion.
Going forward, we expect the revenue share of U.S. and Canada to decline to about 41% by 2020, with the user base share also declining to about 11% of an estimated 2 billion monthly active users. In terms of ARPU, we expect it to grow consistently over the next 5 years, with North America leading the pack at $76.30 per user. We expect the average ARPU for all international markets to rise to $13.90 per user during the same period, compared to $1.88 per user in Q1 2016.
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Have more questions about Facebook? See the links below.
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