EFTA01104713.pdf

J.P.. Morgan North America Equity Research 25 July 2013 Overweight Facebook FB, FB US Price: $26.51 Facebook Beginning to Show the True Potential of Its A Price Target: $44.00 Ad Platform; We'd Continue to Be Buyers, PT to S44 Previous: $35.00 Facebook delivered its strongest quarter yet as a public company—results that we Internet think could be thesis-changing for many—and we would continue to buy Facebook Doug Anmuth AC shares even after the —17% move up in the after-market. Our revenue and non-GAAP (1. EPS estimates increase 12% and 38% for 2013, and 22% and 46% for 2014. Our price target moves from $35 for year end 2013 to $44 for year end 2014, based on the Bloomberg JPMA ANMUTH <GO> average of our DCF analysis ($48), 15x 2015E EBITDA ($45), and 30x 2015E non- Kalzad Gotta, CFA GAAP EPS ($38). We reiterate our Overweight rating. (I • Significant Mobile Advertising upside. Mobile revenue of $656M was well above Bo Nam our $446M estimate, driving 15% upside in total Ad revenue and 45% upside in (I both non-GAAP operating income and EPS. One year into Facebook's Mobile Advertising efforts, Mobile has increased from zero to 41% of total Ad revenue. As Diana R Kluger Mobile becomes the majority of Ad revenue in 2H13, we believe the Desktop to (I Mobile mix-shift bear argument should fade as Mobile benefits from secular growth and higher pricing potential. It is also where Facebook's ad platform is J.P. Morgan Securities Lit most differentiated. Quite simply, Mobile moves from a headwind to a tailwind. • Inflection in advertiser demand and ad quality. We believe 2Q matted an inflection point in advertiser demand and ad quality for Facebook, enabling the company to increase inventory while simultaneously realizing higher pricing. This is the first quarter we have seen such strong auction dynamics play out on Facebook's platform and we believe it can continue as advertiser ROI improves. Overall ad impressions increased 43% YA' and eCPMs 13% YN, and pricing Join 0012 aril Apt) Mil would have been even higher if not for the lower pricing floor in int'l markets. — PS Mon price ($) - SIP500 Owen* YTD 1m 3m 12m • Greater clarity on engagement and back-half comps. We think management Me I -sax 10.6% 1.sx 4.6% provided greater insight into engagement trends and tougher 2H 13 comps. Beyond Rel I -20.2% 3.6% -53% -322% DAUs/MAUs increasing to 61%, management indicated that time spent per person on Facebook continues to increase and that internal data shows steady usage and engagement among teens. Management noted tougher 2H comps, but also showed greater confidence in News Feed ads and the company's ability to improve quality and relevance. Ow 2HI3 YN advertising growth increases from 27% to 51%. • Significant increases to numbers. We now project 2013/2014 revenue of $7.3B (+44% WY) / $9.6B (+31% WY) and non-GAAP EPS of $0.74 (+38% YN) $0.98 (+32%). Ow 2015 non-GAAP EPS goes to $1.25. Facebook Inc. (FB;FB US) FYE Dec 2011A 2012A 2013E 2013E 2014E 2014E Company Data (Prey) (Curr) (Prey) (Curr) Price (5) 26.51 EPS - Repotted (S) Date Of Price 24 Jul 13 O1 (Mar) 0.10 0.12 0.12A 0.12A 52-week Range (5) 32.51-17.55 O2 (Jun) 0.12 0.12 0.13 0.19A Market Cap ($ run) 64,976.01 O3 (Sep) 0.12 0.12 0.13 0.19 Fiscal Year End Dec 04 (Dec) 0.17 0.17 0.15 0.23 Shares O/S (run) 2,451 FY 0.51 0.54 0.54 0.74 0.67 0.98 Price Target ($) 44.00 CONSENSUS_EPS Price Target End Date 31-Dec-14 Bloomberg EPS FY (5) - 0.51 0.58 0.76 Source: Company data. Bloomberg. J.P. Morgan estimates. See page 13 for analyst certification and important disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. www.jpmorganmarkets.com EFTA01104713 Dou Anmuth North America Equity Research 1 25 July 2013 J.P.Morgan Key Takeaways• • Strong 2Q results. Facebook reported 2Q total revenue of $1.88 (+53% WY), 14% ahead of our forecast and 12% ahead of the Street. Ad revenue of $1.6B (+61% WY) was 15% ahead of our $1.48 (40% Y/Y) estimate. Upside to ad revenue was driven by greater than expected mobile ad revenue, an increase in the number of marketers to over I M active advertisers in 2Q, and strong performance of News Feed ads. Payments and Other revenue of $214M (+I I% YAP) also came in 4% above our $205M (+7% VA') estimate as revenue from games was up 11% VA' when adjusted for revenue recognition timing in 2012. EBITDA and PF EPS of $1.08 and $0.19 also beat our/consensus estimates of $783M/$848 and $0.13/$0.13. • Solid user engagement trends. Engagement trends across platforms remain strong, users continue to grow in all geographies, and total DAUs/MAUs have reached 61%, with the most penetrated U.S. market at over 70%. Facebook continues to make good progress on mobile as mobile DAUs were up 60% Y/Y and reached 57% DAUs/MAUs in 2Q. Despite recent negative sentiment around teen engagement levels, Facebook indicated that it is nearly fully penetrated among U.S. teens and DAUs and MAUs have been steady over the past year and half. Beyond teens, Facebook cited comScore and Nielsen data highlighting Facebook's share of time spent in the U.S. is either steady or increasing as the market expands due to mobile. As these metrics highlight Facebook only, the inclusion of Instagram would add to the growth in engagement. • Upside to ad revenue driven by News Feed ads and mobile monetization. 2Q ad revenue of $1.68 (+61% Y/Y, +63% VA' ex-FX) came in well above our $1.48 estimate, driven by strength across all regions as Facebook captures a growing portion of budgets. News Feed ads continue to be the main driver of ad revenue growth without a meaningful drop in user satisfaction—ads on average now make up 5% of stories in the News Feed. In an analysis by Datalogix, marketers saw a median return on ad sales of 3x for non-News Feed ads vs. 5.9x for News Feed ads. Facebook noted increased spend from Direct Response marketers, mobile app developers, local businesses, and brand marketers. Facebook exceeded 1M active advertisers in the quarter and reached —18M local businesses with Facebook Pages, and 88-100M people actively used Facebook daily during primetime TV hours. Additionally, mobile ad revenue of $655.6M (41% of total ad revs) was significantly higher than our $446.1M (32% of total ad revs) estimate. • Expecting tougher 2H compares. We're encouraged by the acceleration in 2Q ad revenue and we expect continued strong ad revenue growth in 2H13, driven by continued advertiser penetration, ad quality improvements, and new ad products such as video which could potentially launch in 4Q. However, Facebook faces tougher Y/Y revenue compares in 3Q and 4Q given the introduction of News Feed ads in 2H12. Facebook noted it expects 2013 revenue growth to be somewhat slower than its 50% opex growth target for 2013 and we're modeling 50% and 36% growth in 3Q and 4Q respectively. • 2013 opex guidance maintained, though cape: guidance was reduced. Facebook maintained its 2013 opex (including COGS, excluding SBC) guidance of 50% YAP growth and we're modeling some deceleration in opex growth in 2HI3. 2Q capex of $268M was lower than expected due to efficiencies and timing and the company now expects 2013 capex of $1.68, down from $1.88. 2 EFTA01104714 Dom Anmuth 1 North America Equity Research 25 July 2013 J.P.Morgan Summary of the Quarter Facebook reported 2Q revenue, EBITDA, and PF EPS of $1.81B, $1.02B, and $0.19, compared to our estimates of $1.59B, $783M, and $0.13, respectively. Figure 1: Facebook 2Q Performance v J.P. Morgan Estimates 2Q13 (5 in millions) JPME Actuals Diff (%) Advertising 1,390 1599 15.0% Payments and Other Fees 205 214 4.2% Revenue 1,596 1,813 13.6% EBITDA 783 1,024 30.8% EBITDA Margin 49.1% 56.5% GAAP EPS $0.08 $0.13 56.0't€ PF EPS $0.13 $0.19 49.7% YN Growth Advertising 40.1% 61.2% Payments and Other Fees 7.0% 11.5% Revenue 34.8% 53.1% EBITDA 19.7% 56.6% GAAP EPS NM NM PF EPS 8.2% 62.0% Sequential Growth Advertising 11.7% 28.4% Payments and Other Fees -3.6% 0.5% Revenue 9.4% 24.3% EBITDA -2.6% 27.4% GAAP EPS NM NM PF EPS 4.3% 56.1% Source: J.P. Morgan estimates. Company date. EFTA01104715 Doug Anmuth 1 North America Equity Research 25July 2013 J.P.Morgan Adjusting Estimates Facebook reported higher than expected mobile ad revenues and payments revenues, which offset lower than expected desktop ad revenues. As a result, we are adjusting our estimates as follows: Figure 2: Adiustino J.P. Morgan Estimates Facebook 3Q13 JPME 4013 JPME 2013 JPME 2014 JPME (S In moan) Old New Old New Old New Old New Advertising Revenue 1,425 1.693 1.647 1.952 5.708 6.489 7.088 8,830 YN Growth 31.2% 55.9% 24.0% 46.9% 33.4% 51.6% 24.2% 36.1% % ehg vs. old 18.8% 18.5% 13.7% 24.6% Mobile Revenue 505 804 623 996 1,947 2.829 3.412 5,092 Y/Y Growth 231.9% 429.1% 103.8% 225.7% 314.7% 502.5% 75.2% 80.0% % chg vs. old 59.4% 59.8% 45.3% 49.2% Desktop Total Rev 921 888 1,024 957 3.761 3.660 3.676 3,738 Y/Y Growth -1.4% -4.9% 0.1% -6.5% -1.3% -3.9% -2.2% 2.1% % dig vs. old -3.5% -8.6% -2.7% 1.7% Desktop Right Rail Rev 690 628 707 646 2.817 2.666 2.416 2,289 Y/Y Growth -19.5% -26.8% -17.2% -24.3% -20.3% -24.6% 14.3% -14.2% % chg vs. old -9.1% -8.6% -5.4% -5.2% Desktop News Feed Rev 230 261 318 311 943 994 1.261 1,450 Y/Y Growth 201.7% 241.7% 86.8% 82.7% 242.5% 260.9% 33.7% 45.9% % chg vs. old 13.3% -2.2% 5.4% 15.0% Payments Revenue 203 203 201 201 822 831 779 788 Y/Y Growth 15.3% 15.3% -21.4% -21.4% 1.5% 26% -5.2% -5.2% % ehg vs. old 0.0% 0.0% 1.1% 1.1% Total Revenue 1,628 1,896 1.849 2.153 6.530 7.320 7.868 9,618 Y/Y Growth 29.0% 50.2% 16.6% 35.9% 28.3% 43.8% 20.5% 31.4% % ehg vs. old 16.4% 16.5% 12.1% 22.2% EBITDA 781 1,045 915 1,182 3.283 4.055 3.841 5,102 Y/Y Growth 7/.4% 49.1% -4.7% 23.1% 12.9% 39.4% 17.0% 25.8% Margin (%) 18.0% 55.1% 49.5% 54.9% 50.3% 55.4% 48.8% 53.0% % dig vs. old 33.8% 29.2% 23.5% 32.8% PF EPS SO 13 $0.19 $0.15 $0.23 $0.54 $0.74 $0.67 $0.98 YN Growth 5.5% 58.5% -9.6% 33.9% 0.1% 38.0% 24.4% 32.2% % ehg vs. old 50.3% 48.2% 37.9% 46.4% Source: J.P. Morgan estmates. Darn:any data. 4 EFTA01104716 Dou Anmuth 1 North America Equity Research 25 July 2013 J.P.Morgan Investment Thesis, Valuation and Risks Facebook (Overweight: Price Target: S44.00) Investment Thesis We believe Facebook's virtual ownership of the social graph, strong competitive moat, and focus on the user experience position the company to significantly improve monetization over time and to become an enduring, blue-chip company built for the long term. Facebook's massive reach and engagement continue to drive network effects and its targeting abilities provide significant value to advertisers, though it is still early. We believe Facebook's ad platform is just beginning to shift toward mare social ads with higher-quality formats, and it will become increasingly valuable to advertisers. Valuation Raising PT to $44. We are establishing a 2014 year end price target of $44, which replaces ow prior 2013 year end price target of $35. Our new PT employs an average of a DCF and multiples (EV/EBITDA and PIE) based valuation. We're using this valuation approach as we believe it appropriately balances Facebook's valuation relative to its growth and industry peers, while a DCF gives the company some credit for the opportunity to improve monetization over the long term. Our DCF results in a $48 price per share and employs an 11% WACC and 3% long term growth rate. We expect Facebook to generate $26.96B in revenue in 2020 with a 53.5% EBITDA margin. Our EV/EBITDA valuation results in a $45 price per share and employs a I5x target EV/EBITDA multiple on our 2015 EBITDA of $6.39B. Our 15x target multiple is in-line with high-growth industry peers such as Netffix and TripAdvisor. Our P/E valuation results in a $38 price per share and employs a 30x PIE multiple on ow 2015 PF EPS estimate of $1.25, which is slightly below Facebook's 33% 2012- 15E PF EPS CAGR. Risks to Rating and Price Target Downside risks include: I ) user-first mentality could create short-term revenue risk and volatility; 2) competition from purpose-driven social services; 3) advertiser ROI on Facebook may remain difficult to measure; 4) privacy, security, and regulatory risks; 5) competition for online and mobile ad dollars from Google, Yahoo!, and other online advertising companies; and 6) dual-class share structure and Mark Zuckerberg's control. 5 EFTA01104717 Dou Anmuth 1 North America Equity Research 25 July 2013 IRMorgan Figure 3: Facebook Income Statement 2011A 1012A 2012A 3C112A 4012A 2012A 1013A 2Q13A 3013E 4Q13E 2013E 2014E 2015E Revenue 3,711 1,058 1,184 1,262 1,585 5,089 1,458 1,813 1,896 2,153 7,320 9,618 11,924 Cost of Revenue 851 273 295 317 387 1.272 404 454 474 528 1.860 2.414 2.981 Gross Profit 2,860 785 888 045 1,198 3,817 1,054 1,359 1,422 1,626 5,461 7,204 8.043 Operatrig Expenses Marketing and Sales 383 136 135 149 162 582 175 235 252 286 949 1.270 1.514 Research and DeMopment 273 93 112 142 157 504 165 186 218 241 810 1.154 1.479 General and Administrative 225 72 127 129 143 471 151 144 152 166 612 789 954 Stock-based Compensation 217 103 1.106 179 184 1.572 170 224 227 258 880 866 954 Payroll Tax Related to SSC 6 152 (31) 29 150 20 8 Total Operating Expenses 1,104 404 1832 568 675 3.279 681 797 849 952 3.251 4,078 4.901 Operating Income 1.756 381 (743) 377 523 538 373 562 573 674 2,210 3,126 4.042 PF Operating Income 1.970 484 515 525 736 2,260 563 794 800 932 3,089 3,991 4,996 Other income (expense)• net (61) 1 (22) (5) (18) (44) (20) (17) 0 21 (16) 102 162 Pre-tax Income 1.695 382 (765) 372 505 494 353 545 573 695 2,194 3,228 4,204 Income Taxes 695 177 (608) 431 441 441 134 212 252 306 904 1,356 1.724 Effective Tax Rate 41% 46% NIA 116% 87% 89% 38% 39% 44% 44% 41% 42% 41% GAM Net Income 1.000 205 (157) (50) 64 53 219 331 321 389 1,290 1,872 2,481 GAO EPS 50.43 $0.00 ($0.08) ($0.02) $0.03 $0.02 $0.09 $0.13 $0.13 $0.15 $0.51 $0.73 $0.16 Diluted Shares Out £.332 2,361 2.451 2.579 2.506 2.474 2.499 2,502 2.511 2.515 2.507 2.557 2.608 Non-GAAP Pretax Income 1.918 485 493 S20 718 2,216 543 777 800 954 3,0741 4,093 5,158 Income Taxes /32 192 198 209 292 891 231 289 320 382 1.222 1.596 1.909 Effectrve Tax Rate 38% 40% 40% 40% 41% 40% 43% 37% 40% 40‘c 40% 39,1 37% Non-GAAP Net [name 1.186 293 295 311 426 1.325 312 488 480 572 1.852 2.497 3.250 Non-GAAP EPS 50.51 $0.12 $0.12 $0.12 $0.17 50.54 50.12 $0.19 $0.19 $0.23 50.74 50.98 5115 EBITDA Calculation Operating Income 1.756 381 (743) 377 523 538 373 562 573 674 2,210 3,126 4,042 Stock-based compensated., 217 103 1,106 179 184 1,572 170 224 227 258 880 866 954 Payroll Tax Related to SEC 6 152 (31) 29 150 20 8 Depteciabon and Arnortzation 323 110 139 176 224 649 241 230 245 249 965 1.111 1.396 EBITDA 2.302 594 654 701 HO 2.909 804 1,024 1,045 1.182 4.055 5.102 6.392 2011A 1012A 2012A 3012A 4012A 2012A 1013A 2013A 3013E 4013E 2013E 2014E 2015E WY Growth Revenue 88% 45% 32% 32% 40% 37% 38% 53% 50% 35% 44% 31% 24% Cost of Revenue 73% 63% 43% 36% 59% 49% 48% 54% 50% 36% 46% 30% 23% Gross Profit 93% 39% 29% 31% 35% 33% 34% 53% 50% 36% 43% 32% 24% Marketing and Sales 110% 100% 48% 38% 40% 52% 29% 74% 69% 77% 63% 34% 19% Research and Development 102% 75% 78% 89% 91% 85% 77% 66% 54% 54% 61% 42% 28% General and Administrative 101% 50% 123% 139% 120% 109% 110% 13% 18% 16% 30% 29% 21% Stock-based Compensation 985% 1371% 1628% 156% 142% 624% 65% -80% 27% 40% -44% -2% 10% Total Operating Expenses 146% 130% 481% 85% 99% 197% 69% -51% 50% 41% -1% 29% 20% Total Operating Expenses (Ex-SBC) 88% 71% SO% 57% 67% 63% 56% 52% 49% 44% 50% 33% 23% Operating Income 70% -2% -283% -9% 4% 49% -2% NM 52% 29% 311% 41% 29% PF Operating Income 88% 23% 8% 8% 18% 14% 16% 54% 52% 27% 37% 29% 25% GAAP Net Income 65% -#216 465% -139% -79% -95% 7% NM NM 508% NM 45% 33% GAM EPS -trA -179% -125% -80% -95% 1% NM NM 506% NM 42% 30% Non-GAAP EPS 20% 4% 4% 2% 5% 1% 62% 58% 34% 38% 32% 28% EBITDA 93% 33% 19% 21% 32% 26% 35% 57% 49% 23% 39% 26% 25% OM Growth Revenue -6% 12% 7% 26% -8% 24% 5% 14% Operating Income -30% -295% -151% 39% -29% 51% 2% 18% PF Operating Income -22% 6% 2% 40% -24% 41% 1% 17% EBITDA 48% 10% 7% 37% -16% 27% 2% 13% % of Revenue Ccet of Revenue 22.9% 25.8% 24.9% 25.1% 24.4% 25.0% 27.7% 25.0% 25.0% 24.5% 25.4% 25.1% 25.0% Gross Profit 77.1% 74.2% 75.1% 74.9% 75.6% 75.0% 72.3% 75.0% 75.0% 75.5% 74.6% 74.9% 75.0% Marketing and Sales 10.3% 12.9% 11.4% 11.8% 10.2% 11.4% 12.0% 13.0% 13.3% 13.3% 13.0% 13.2% 12.7% Research and Development 7.4% 8.8% 9.5% 11.3% 9.9% 9.9% 11.3% 10.3% 11.5% 11.2% 11.1% 12.0% 12.4% General and Administrative 6.1% 6.8% 10.7% 10.2% 9.0% 9.3% 10A% 7.9% 8.0% 7.7% 8.4% 8.2% 8.0% Stock-based Compensation 5.8% 9.7% 93.4% 14.2% 11.6% 30.9% 11.7% 12.4% 12.0% 12.0% 12.0% 9.0% 8.0% Operating Income 47.3% 36.0% -62.8% 29.9% 33.0% 10.6% 25.6% 31.0% 30.2% 31.3% 30.2% 32.5% 339% PF Operating Income 53.3% 45.7% 433% 41.6% 46.4% 44.4% 38.6% 438% 422% 43.3% 42.2% 41.5% 41.9% EBITDA 62.0% 56.1% 552% 55.5% 60.6% 57.2% 55.1% 56.5% 55.1% 54.9% 55.4% 53.0% 53.6% Source: J.P. Morgan estrretes.Conwany data. 6 EFTA01104718 Doug Anmuth North America Equity Research 25 July 2013 J.P.Morgan Figure 4: Facebook Revenue Segment Summary 2O11A 1012A 2O12A 1012A 4012A 2O12A 1O13A 2011A 3013E 4011E 2013E 2014E 2015E ummary Advertising 3.154 872 992 1.086 1.329 4279 1.245 1.599 1.693 1.952 6.489 8.830 11.161 WY Grov4h 69% 37% 28% 36% 41% 36% 43% 6I% 56% 47% 52% 36% 26% Ex-FX Revenue (Y/Y) 38% 33% 43% 43% 43% 63% 44 Smyth a 14% 9% 22% -6% 28% 6% 15% % of Total Revenues 85% 82% 84% 86% 84% 84% 85% 88% 89% 91% 89% 92% 94% Payments and Other Fees 557 186 192 176 256 810 213 214 203 201 831 788 762 WY Growth 425% 98% 61% 13% 36% 45% 15% 11% 15% -21% 3% -5% -3% CVO Growth -1% 3% -8% 45% -17% 0% -5% -I% % of Total Revenues 15% 18% 16% 14% 16% 16% 15% 12% 11% 9% 11% 8% 6% Total Revenue 3,711 1,058 1,184 1,262 1,585 5,089 1,458 1,813 1,896 2,153 7,320 9,618 11,924 WY Growth 88% 45% 32% 32% 40% 37% 38% 53% 50% 36% 44% 31% 24% WY Growth (Ex-FX) 86% 46% 36% 38% 42% 41% 414 Growth a 12% 7% 26% a 24% 5% 14% Seasceality 21% 23% 25% 31% 20% 25% 26% 29% Revenue per MAU (ARPIN Summary US & Canada $11.50 $2.90 $3.20 $3.40 $4.08 $13.61 $3.50 $4.32 $424 $4.83 $18.95 $19.59 $22.64 Europe $5.61 $1.40 $1.43 $1.37 $1.71 $5.94 $1.60 $1.87 $1.82 $1.99 $7.33 $8.84 $10.43 Asia $2.08 $0.53 $0.55 $0.58 $0.69 $2.37 $0.64 $0.75 $0.78 $0.76 $2.96 $3.39 $3.88 Rest of World $1.56 $0.37 $0.44 $0.47 $0.56 $1.88 $0.50 $0.63 $0.79 $0.96 $2.95 $4.14 $4.68 Total $5.11 $1.21 $1.28 $1.29 $1.54 $535 $1.35 $1.60 $161 $1.77 $6.38 $7.28 $8.05 XaSamith US & Canada 33% 17% 73% 22% 28% 18% 21% 35% 25% 18% 25% 16% 16% Europe 46% 18% 7% 2% 7% 6% 14% 31% 33% 16% 23% 21% 18% Asia 40% 25% 17% 3% 22% 14% 21% 36% 36% 11% 25% 14% 14% Rest of World 468% 78% 13% 78% 38% 21% 36% 44% 70% 70% 57% 40% 13% Total 25% 7% 1% 4% 12% 5% 11% 25% 25% 15% 19% 14% 11% Growth us& Canada -9% 10% 6% 20% -14% 23% -2% 14% Europe -73% 2% -4% 25% -7% 17% -2% 9% Asia -6% 4% 5% 19% -7% 18% 4% -3% Rest ol World -9% 19% 6% 2f% -11% 26% 26% 21% Total -12% 5% 1% 19% -12% 19% 1% 10% Geo ra • hic Revenue Breakdown Based on User Location US & Canada 1.914 525 590 637 780 2.532 679 848 840 963 3.330 3,957 4.649 Europe 1.155 328 346 341 440 1.455 423 505 499 552 1.979 2,518 3.010 Asia 363 118 135 154 198 605 197 247 274 280 998 1,397 1.863 Rest of World 218 87 113 130 167 497 159 213 283 359 1.013 1.746 2.321 Total 3,711 1,058 1,184 1,262 1,585 5.089 1.458 1.813 1.896 2,153 7,320 9,618 11,924 % of Total US & Canada 52% 50% 50% 50% 49% 50% 47% 47% 44% 45% 45% 41% 39% Europe 31% 31% 29% 27% 28% 29% 29% 28% 26% 26% 27% 26% 26% Asia 10% 11% 11% 12% 12% 12% 14% 14% 14% 13% 14% 15% 16% Rest of World 8% 8% 10% 10% 11% 10% 11% 12% 15% 17% 14% 18% 19% Total 100% 103% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% YN Growth US & Canada 67% 33% 25% 32% 38% 32% 29% 44% 32% 23% 32% 19% 17% Europe 100% 43% 26% 18% 22% 26% 29% 46% 46% 25% 36% 27% 23% Asia 145% 90% 65% 48% 72% 67% 67% 83% 78% 41% 65% 40% 33% Rest of World 907% 89% 69% 68% 90% 79% 83% 88% 118% 115% 104% 72% 33% Total 95 45% 32% 32% 40% 37% 38% 53% 50% 36% 44% 31% 24% Source: J.P. Megan estimates. 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