After disappointing financial results from Microsoft, Apple and Twitter, Facebook came in at the last moment to save the day for Wall Street investors. The company’s latest financial report blew past analysts’ expectations and seemingly proved that Facebook is in a comfortable leading position in the market.
According to the report, Facebook announced revenue of $5.38 billion for the first quarter of 2016, with earnings per share of 77 cents (non-GAAP). That’s around 10% better than analysts were expecting, with the company’s stock jumping in after-hours trading. In fact, if the company opens at its current rates it will hit its highest stock value ever.
Net income for Facebook’s first quarter of 2016 sat at $2.2 billion (non-GAAP) up from $1.2 billion this time last year. These numbers are quite impressive, but what went into them is probably even more important.
The company’s successful quarter seems to have been on the back of its ever-expanding user base. Daily active users (DAUs) reached a staggering 1.1 billion in March 2016, a 16% increase year-over-year, while monthly active users (MAUs) climbed to 1,65 billion at the end of the quarter. That’s above what analysts were expecting, who were predicting 1.63 billion users. Even more importantly, mobile MAUs saw a significant increase of 21% year-over-year up to 1.51 billion, again blowing past analysts’ expectations.
Mobile usage metrics are perhaps Facebook’s most important indicator of whether its strategies are working, as there are more mobile users in the world than ever and their number is expected to grow substantially in the following years.
But things seem rosy indeed for the company, as most of its revenue, $5.2 billion to be exact, comes from advertising, with 82% of that being from mobile ads. That’s a substantial 57% increase in ad revenue overall and a staggering 73% increase in mobile ad revenue compared to this time last year. And, of course, the company is planning on growing that number further as it continues to experiment with new ways of showing ads to its users, and drives adoption from the advertising market.
Finally, the company did not disclose how its number break down over each individual service, like Facebook, Messenger, Instagram or Whatsapp. However, its CFO did confirm that Instagram, which is now advertised on by 200,000 businesses, is contributing to the company’s bottom line.
Recently, at the company’s F8 event, Mark Zuckerberg announced the company’s roadmap for the next years, with a new focus of developing experiences and services on the platforms that it owns. Among those announcements, was the adoption of bots and a very strong focus on virtual, augmented and mixed reality.