Mike Isaac

Recent Posts by Mike Isaac

Facebook Beats as Mobile Revenue Jumps to 41 Percent of Ads Business

Facebook_FFacebook’s numbers are in, and they look good across the board — especially in mobile.

The social giant posted its second-quarter earnings on Wednesday afternoon, reporting earnings per share of 13 cents on revenue of $1.81 billion. That beats analysts’ expectations of an EPS of 14 cents on revenue of $1.62 billion.

But the biggest point of interest here is in the breakdown of Facebook’s revenue numbers. Mobile revenue, the most closely watched part of Facebook’s business, accounts for 41 percent of Facebook’s total revenue. That’s a leap from accounting for nearly 30 percent just last quarter.

“One of the things this quarter says to us is that News Feed ads work,” Facebook CFO David Ebersman told AllThingsD in an interview. “They’re really creating compelling returns for our advertisers.”

Facebook has faced intense criticism from investors over the past year and a half, as Wall Street voiced concerns that the company couldn’t adeptly handle the massive shift from desktop to mobile use. Most of Facebook’s advertising products were optimized for desktop users for as long as the company has been around, and only over the past year has it tried to shift toward a “mobile first” environment.

The company, however, has made some inroads with new mobile advertising products — in particular with its mobile app installation ads aimed at application developers.

“They’re growing very rapidly,” Ebersman said of the ad product. “And we’re enthusiastic because the app ecosystem is such a fast-growing and dynamic area — developers need effective ways to help people discover what they have built.”

As far as overall user growth, Facebook is still increasing in both new users and engagement. Facebook’s daily active users increased to 699 million, a jump of 27 percent year over year. And monthly active users swelled to 1.15 billion, a 21 percent increase year on year.

But again, the biggest number of note here is the mobile MAU number. Monthly active users on mobile jumped to 819 million, an increase of 51 percent year over year. Talk about a shift from desktop to mobile.

“We’ve made good progress growing our community, deepening engagement and delivering strong financial results, especially on mobile,” CEO Mark Zuckerberg said in a canned statement. “The work we’ve done to make mobile the best Facebook experience is showing good results and provides us with a solid foundation for the future.”

Facebook’s stock is up nearly 20 percent in after hours trading, hovering around $31 per share.

Tune in to my colleague Peter Kafka’s live coverage of the earnings call here.


Latest Video

View all videos »

Search »

I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik