Menlo Park-based social-media company Facebook posted a $157 million net loss in its debut quarterly report on Thursday, July 26.
The report details that the company's revenue increased by 32 percent from the second quarter of 2011 (April-June), up to $1.18 billion. However, in that same timeframe, Facebook's cost and expenses expanded by more than 295 percent, eclipsing the revenue gain and causing the net loss.
Much of the company's increase in expenses comes from share-based compensation expenses. During the second quarter of 2011, Facebook remained a private company and therefore did not have any share-based expenses. The now-public Facebook reported $1.3 billion in share-based compensation expenses for its second quarter in 2012.
The share-based expenses are tied to the company's Initial Public Offering in May. The IPO, which many believed would top $100 billion, failed to meet expectations with Facebook stock plummeting almost immediately upon hitting the trading floor.
Following Thursday's report, Facebook's stock fell $2.29 or 8.5 percent to close at $26.84 per share.
"Our goal is to help every person stay connected and every product they use be a great social experience," Facebook founder and CEO Mark Zuckerberg stated in the report. "That's why we're so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends."
Advertising, which accounts for 84 percent of Facebook's revenue, was up 28 percent from 2011 at $992 million. The company also reported gains in "mobile active users" and "daily active users," up 67 percent to 543 million and 32 percent to 552 million, respectively.