Shares hit record high after figure is much higher than expected, with total revenue climbing 44.8% thanks to increased mobile video ad sales
Facebook has delivered a much higher-than-expected quarterly earning, driven by a sharp increase in sales of mobile video ads, sending its shares to an all-time high.
Total revenue rose 44.8% to $9.32 bn from the same period in 2016, of which Facebook posted a profit of $3.89 bn up a whopping 71% from the year before.
We had a good second one-quarter and first half of the year. Our community is now two billion people and were focusing on bringing the world closer together, told Facebooks CEO, Mark Zuckerberg.
Mobile ad revenue accounted for 87% of the companys total ad revenue of $9.16 billion in the latest quarter, up from 84% a year earlier.
The boost came from increasing monetisation of video within the Facebook News Feed, as well as growth in the Facebook-owned Instagram.
Facebook has not told how much of its revenue is attributable to its Instagram unit, though the photo-sharing app has become a greater focus of its business.
Clearly, the biggest driver of growth is, overall, Facebook News Feed, chief financial officer David Wehner told. Instagram is making a contribution, and an increasing contribution.
Facebook, along with Google, takes the lions share of online ad revenue 99% of all new dollars spent last year, according to Pivotal Research. However, Facebooks news feed is reaching saturation point so the company will have to sell more ads elsewhere or assure a slowdown in growth.
Facebook still has plenty of room to grow, revenue-wise. Its only just started inserting ads into Messenger and its experimenting with ad violates inserted into videos. The company has also launched classified ads in its Marketplace feature, where users can buy and sell items from each other.
The company is also investing in original TV-style programming to feature in the Facebook mobile app, which could foster users to expend more time on the platform, in turn permitting Facebook to sell more advertising.
During the earnings call, Zuckerberg revealed that WhatsApp had grown to 1.3 billion monthly users, a billion of whom use the messaging service daily. WhatsApp Status, its little-publicised version of Snapchat Stories that launched six months ago , now has more than 250 m daily users the second Facebook-created Snapchat Stories clone to eclipse Snapchat, after Instagram Stories. Snapchat has just 166 m daily active users.
Snapchat was a thorn in Facebooks side for many years, but the smaller competitor hasnt been able to keep up with the social networks relentless copying of its core features.
Facebook is expected to generate $36.29 billion in net digital ad revenue this year, a 35% jump from 2016, according to the research firm eMarketer.
Facebook said about 2.01 billion people were use its service monthly as of June 30, up 17% from a year earlier. About 1.3 billion of them use the service every day, told Facebook.