Facebook Revenue Soars 59% to $6.4B in Q2

The social media giant easily beat estimates as monthly users reached 1.71 billion and mobile advertising revenue rose 81%.
Matthew HellerJuly 28, 2016

Facebook crushed Wall Street’s earnings estimates for the second quarter, reporting its fastest rate of revenue growth in two years and reaching the milestone of 1 billion daily mobile users.

The social media network said revenue rose 59% to $6.44 billion while earnings per share, excluding certain expenses, almost doubled to 97 cents. The numbers easily topped analysts’ estimates of $6.02 billion in revenue and 82 cents in EPS.

Analysts marveled at the earnings report, while investors on Thursday pushed Facebook’s stock price to an all-time high of $125.06. The company has exceeded earnings forecasts all but once since it went public in May 2012 at $38 per share.

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“They knocked it out of the park again. Massive user growth combined with fantastic monetization,” Jan Dawson, chief analyst with Jackdaw Research, told USA Today.

In the second quarter, Facebook added 60 million monthly users to reach 1.71 billion, while daily active users reached 1.13 billion, up 17% for the year. Mobile monthly users increased 20% to 1.57 billion and mobile daily users rose 22% to pass the 1 billion threshold.

“What’s especially remarkable is that Facebook’s stickiness, or DAUs divided by MAUs, stayed steady at 66%,” TechCrunch said. “That means people aren’t using Facebook less even as it grows and ages.”

On the monetization side, mobile advertising revenue rose 81%, fueled by video spots and ads that target the growing number of people flocking to Facebook and its Instagram app. Total ad revenue reached $6.2 billion, up 63% year over year and well above estimates of $5.8 billion.

“Given Facebook’s growth drivers are accelerating, we believe concerns over user engagement and other social competitors are entirely overblown,” TheStreet said, adding that Facebook “has mastered how to advertise on mobile and social effectively and profitably while maintaining the incredible user experience.”

According to eMarketer, Facebook will command nearly 68% of social media ad dollars around the globe this year. “We’re particularly pleased with our progress in video as we move towards a world where video is at the heart of all our services,” Facebook founder and CEO Mark Zuckerberg said in a news release.