Facebook’s mobile business shows no signs of slowing down, as the company posted strong growth in both its monthly active users (MAU) and ad revenue in Q2 2016. Advertising revenues were driven by increasing mobile engagement, higher number of marketers, continuing investment in new products and robust performance of its news feed ads.
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Facebook, which now has more than 1.7 billion monthly users, said its ad revenue surged 63 percent in the second quarter, with mobile accounting for 84 percent of the total.
Facebook CEO Mark Zuckerberg and his team’s marketing expertise drove bigger revenue and profit for second quarter through Facebook advertising business majorly.
The numbers outperformed many analysts predictions for the quarter, and point to significant changes in the company’s mobile and advertising strategies.
Facebook is now used by more than 1.7 billion people every month, the U.S. social network’s latest financial results revealed.
The company reiterated the growing importance of video in content consumption on the Facebook platform, which should also help its advertising revenue in the long term.
It was not that long ago that Mark Zuckerberg was significantly anxious that Facebook would fall behind as consumers quickly transitioned to accessing the Internet and content through mobile devices.
The shares of Facebook Inc. have traded close to all-time intraday highs since the previous quarter’s earnings, breaking above $122 in the current week.
Facebook has been pushing new services, including photo and video-sharing on Instagram and its messaging apps. The revenue generated per user by the company has also increased from $2.76 to $3.82.
The number of monthly active users, a key metric for social networks, grew 15 per cent from a year ago, Facebook said.
Payments and other fees decreased 8% year over year to $197 million in the reported quarter owing to a reduction in payment revenues related to PC games. “Massive user growth combined with fantastic monetization”, Jan Dawson, chief analyst with Jackdaw Research, told USA Today. Facebook is a well-known social networking service.
Since that refocus, it’s now seeing two billion searches per day across the 2.5 trillion posts uploaded to the site, compared with 1.5 billion searches in July 2015 – a 33 per cent climb in just nine months.
“Clearly, the softness at Twitter may be exacerbated by ongoing strength at Facebook properties”, Colin Sebastian, an analyst for Baird Equity Research, wrote in a note after Facebook’s earnings. While the Search option continues to improve, Facebook may add another revenue stream to its already large pool by monetizing the feature for advertisers as well.
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Facebook Inc (NASDAQ:FB)’s price to sales ratio for trailing twelve months is 17.79 and price to book ratio for most recent quarter is 7.44, whereas price to cash per share for the most recent quarter is 17.05. Messenger, which once used to be a part of Facebook, was made into a separate app and it now has 1 billion users.
