Facebook posts $3.89 bn Q2 profit as mobile ad revenues swell

27 Jul 2017

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Social networking giant Facebook has posted a net profit of $3.89 billion for the second quarter (April-June 2017), a 71 per cent from the year-earlier profit of $2.28 billion, amidst a revenue spike helped by rising mobile ad sales.

Facebook said its earnings per share of $1.32, was up 69 per cent from 78 cents in the same period a year ago.

Facebook's revenue was boosted by a more than 50 per cent increase in its mobile advertising business, as the social network continued to establish itself in the ever-growing online advertisement space.

Facebook's revenue for the second quarter ended 30 June 2017 rose 45 per cent to $9.32 billion, from $6.43 billion in the same period a year earlier, marking the ninth straight quarterly revenue win, buoyed by mobile video ads sales, including those on Instagram.

Mobile ad revenue represented about 87 per cent of total ad sales in the latest quarter, up from 85 per cent in the prior quarter and 84 per cent in the same period a year earlier.

Facebook's global ad revenue is expected to total $36.29 billion this year, up 35 per cent from 2016, according to forecasting firm eMarketer, making Facebook the largest ad seller after Google.

The company posted a profit of $3.89 billion, up 71 per cent from a year-earlier profit of $2.28 billion, with earnings per share of $1.32, up 69 per cent from 78 cents in the same period a year.

In May, Facebook said it is no longer reporting non-GAAP income and earning-per-share, which excluded stock-based compensation and other expenses).

Facebook said its second-quarter expenses were up 33 per cent from the same period a year earlier to $4.92 billion.

The company had last year warned of rising expenses associated with its "ad load," lie building new data centers, buying original content and recruiting engineers and content moderators to support the volume of ads the company can show users.

The number of total monthly active users grew 17 per cent year-on-year to 2.01 billion, from the same period a year earlier. Year-on-year, daily active users in the latest quarter increased by 17 per cent to 1.32 billion. User activity on Facebook's suite of apps continues to grow. Facebook-owned messaging apps WhatsApp and Messenger both have more than 1.2 billion monthly active users, with WhatsApp reaching 1 billion daily users. Instagram has more than 700 million monthly active users.

More than 70 million businesses have Facebook pages, a key gateway to converting small and medium sized businesses into advertisers on the social network. There are more than 5 million active monthly advertisers on Facebook, up from 2.5 million at the end of 2015. More than 1 million of these advertisers are in emerging markets.

"We had a good second quarter and first half of the year," Facebook CEO Mark Zuckerberg said in a press release on Wednesday. ''Our community is now two billion people and we're focusing on bringing the world closer together.''

Facebook and Instagram compete with platforms like Snapchat, Twitter and YouTube for budgets bleeding out of the $70-billion TV advertising industry.

The company also is accelerating its push into video, an effort aimed at taking advertising dollars from the television industry and increasing the time people spend on Facebook.

Within weeks, Facebook is expected to start a video service that will include scripted shows, a sharp change for a business built on user-generated content.

Zuckerberg said video would be a significant driver of Facebook's business in the next two to three years.

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