Facebook put the brakes on spending at the end of the year

Facebook clamped down on spending in a big way in the last three months of the year.

The company's operating expenses were down sequentially and year-on-year in all categories, as can be seen in the chart below. The spending discipline no doubt helped Facebook deliver a big earnings upside, topping even the most bullish analyst EPS target during the fourth quarter and resulting in $1.5 billion in net income.

What's interesting is that 2015 was supposed to the year of investment for Facebook. The company had warned investors early on to expect a big uptick in spending, as it invested in new efforts like virtual reality and mobile messaging. Clearly, something changed in the fourth quarter: