Facebook (NASDAQ:FB) shares are up following a massive earnings beat for the quarter that ended last June 30.
For its second quarter earnings report, the social media company delivered a massive user growth to two billion monthly active users during the second quarter of the year. Facebook CEO Mark Zuckerberg commented on the company’s performance and added that they are now focused on bringing the world closer together.
According to Facebook, its users which stand at around 2 billion on a monthly basis is around 17% higher than the same quarter during the previous year and is 3.4% higher than the last quarter. Its daily users are estimated to range at around 1.32 billion.
Due to the massive user growth, Facebook’s overall revenue jumped by 44.8% to $9.32 billion from the same quarter last year. Analysts originally estimated that the company’s quarterly revenue would come at around $9.2 billion. Facebook’s profits have jumped by 71% from the prior year to $3.89 billion due to the sudden surge in the company’s revenue from mobile advertising.
The company’s revenue from its mobile advertising alone which contributes to the majority of the entire revenue or about 87% has jumped by 84% from the same period last year. Facebook’s mobile ad revenue totaled to $9.16 billion for the quarter. This was accounted for by the company’s recent update in adding advertisements to user videos which appear on the site’s news feed.
Although Facebook did not officially disclose numbers from its Instagram-driven growth, the company has also increasingly placed ads in the application’s feed. Facebook chief financial officer David Wehner also stated that next to the Facebook News Feed, Instagram’s contribution to their earnings is growing.
Facebook was also able to post an earnings beat of $1.32 per share versus analyst forecasts of $1.13 per share. For the whole year, the company has an outlook of generating $36.29 billion in net digital advertising revenue which represents a rise of 35% from last year.
The company is expected to start placing advertisements on its Messenger app later this month while other plans to expand its mobile advertising is expected to be rolled out slowly according to Facebook COO Sheryl Sandberg.
Shares of Facebook logged new record high following the release of the positive earnings report. During the after-hours trading, Facebook shares rose by 4%. Net income attributable to Facebook shareholders now stand at $3.89 billion from $2.28 billion from the same period last year.