Facebook Earnings Is Up Due To Advertising
The results are in for the second quarter for Facebook, Inc. and things are looking really good for the popular social media company. Facebook founder and Chief Executive Officer Mark Zuckerberg remarked, “This was another strong quarter for our community. Engagement across our family of apps keeps growing, and we remain focused on improving the quality of our services.”
Facebook’s second quarter revenue grew to $4.04 billion for 2015. This is a very significant increase from its second quarter revenue of just $2.9 billion during 2014. Meanwhile, Facebook’s last stock price is $96.99, up by 1.784%.
Zuckerberg believes the company’s incredible growth is due to increase in engagement with Facebook members worldwide. In the remarks prepared for the company’s second quarter earnings call, Zuckerberg stated, “More than 968 million people worldwide now use Facebook daily and 65 percent of our monthly actives are also daily actives. Several products in the Facebook app are reaching global scale too, now with more than 450 million people now using Events each month and more than 850 million using Groups. And when it comes to time spent, across Facebook, Messenger and Instagram, people are now spending more than 46 minutes per day on average. And that doesn’t include WhatsApp.”
Facebook is no longer just popular on desktops and laptops. With today’s smartphones, the Facebook platform is now regularly accessed by more and more members on their mobile. In fact, according to the second quarter 2015 earnings presentation, the number of Facebook’s mobile-only monthly active users (MAUs) has recently grown to 655 million. This is a huge increase from the first quarter mobile-only MAU’s of 581 million. Moreover, this reflect an even bigger growth, compared to the 2014 second quarter mobile-only MAU’s of 399 million.
Meanwhile, advertising is also paying off a lot for Facebook. The company’s mobile advertising revenue actually made up as much as 76% of the company’s revenue for the second quarter. More impressively, it is up by 62%, compared to Facebook’s mobile advertising revenue during the second quarter of 2014.
Moreover, Facebook Chief Operating Officer Sheryl Sandberg stated in the prepared remarks that, “Ad revenue grew 43% year-over-year – 55% on a constant currency basis. Mobile ad revenue grew 74% year-over-year, making it over three quarters of total ad revenue.” In addition, Sandberg reported that Facebook “saw strong revenue growth” in the North American and Asia Pacific markets.
According to Sandberg, key strategies in play for Facebook include “capitalizing on the shift to mobile, growing the number of Facebook marketers, and making our ads more relevant and effective.”
As for the remainder of the year, Facebook Chief Financial Officer Dave Wehner remarked, “Since the first quarter of 2014, we have seen year-over-year advertising revenue growth rates decline each subsequent quarter. We expect this trend to continue in Q3 and Q4 as we continue to grow off a much larger base and face currency headwinds due to the strong dollar.”
Moreover, he added, “We have many exciting opportunities ahead, and we are investing in the talent and resources to capitalize on them as we seek to build long-term shareholder value.”