Facebook stock reached an all time high on Wednesday, topping $75 a share after the company’s Q2 earnings report beat analyst expectations.
The social media giant reported $2.9 billion in revenue, surpassing projections of $2.8 billion by analysts. The company also posted $791 million in net income – an increase of 61% compared to the same period last year. Facebook has now beaten analyst estimates on earnings for the past nine quarters. Earnings per share came in at 42 cents, $.10 over analyst projections.
The Menlo Park, Calif.-based company impressed investors with its mobile revenue in particular. The $2.7 billion in earnings from mobile advertising represented 62% of the company’s overall ad revenue, up from 59% the previous quarter and 41% this time last year.
Facebook also reported encouraging numbers on mobile usage. The company now has 1.07 million active monthly mobile users, up from 1.01 million the quarter before. Together, these revelations should alleviate the concerns about a declining user base, especially among the sought after 13-17 year old and 18-25 year old demographics, which surfaced towards the end of last year.
Overall user numbers also impressed, with the service adding 40 million new monthly active users, increasing the size of the social network to 1.32 billion – nearly one fifth of the world’s population.
Facebook’s future success depends on its advertising, and the social media platform is looking to gain an edge over its main competitor Google. This has led the company to explore new ways of delivering corporate sponsored content. In a conference call, COO Sheryl Sandberg addressed this month’s acquisition of LiveRail, the world’s third-biggest video ad platform Facebook purchased for as much as $500 million. “We have a lot to do here,” she said, “but with LiveRail we’re investing in tools that can improve the relevance of video ads across the web.”
Meanwhile, the company believes that the more high-profile acquisitions like WhatsApp (which expects to be finalized by the end of the year), Oculus, and Instagram, alongside a number of internally developed tools, make the company well-positioned to continue its growth into the future.
“While we are excited about the long-term potential of our ads initiatives like Instagram, autoplay video and the Audience Network, we are still in the early days of building these businesses and expect their revenue contribution to remain small in the near term,” said CFO David Wehner.
CEO Mark Zuckerberg has been known to express ambivalence towards how the company’s performance is measured by shareholders, and in the earnings call he reacted with typical understatement to what is an extremely strong quarterly report. “We had a good second quarter,” he explained. “Our community has continued to grow, and we see a lot of opportunity ahead as we connect the rest of the world.”