Facebook Posts Strong Q3 Earnings, Driven By Mobile, Video Growth

Boosted by the continued growth of video and mobile, Facebook posted strong third-quarter earnings on Wednesday. Beating analysts’ estimates once again, the social giant saw quarterly sales increase by 56% to $7 billion.

During the quarter, mobile ad revenue exceeded $5.7 billion, which represented about 84% of total ad revenue -- up from approximately 78% of all ad revenue in the third quarter of 2015.

Commenting on what he called “another good quarter,” Facebook CEO Mark Zuckerberg said video remains key to the company’s success.

We’re putting video first,” Zuckerberg said during an earnings call on Wednesday. The young mogul said a camera will eventually replace the text box that people presently use to share video. Currently being tested in Ireland, Zuckerberg said he hoped to see a broader rollout “sooner rather than later.” 

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As for video-based ad dollars, Facebook COO Sheryl Sandberg said on Wednesday: “We really believe that over time the dollars will shift to eyeballs.”

Analysts found little fault with Facebook’s current business on Wednesday. “Same news equals good news for Facebook,” said Jessica Liu, senior analyst at Forrester Research. “Continued user and ad growth keeps Facebook in Wall Street’s good graces.” 

Yet “uncertainty may lie ahead,” Liu cautioned. “Facebook is shifting attention away from core Facebook to their family of products (Instagram, Facebook Messenger, and What's App) because they recognize growth lies in those other offerings and want to experiment.”

To that end, Liu added: “With experimentation comes uncertainty for both users and brands as Facebook navigates through what works and what doesn't.” 

During the quarter, Facebook counted 1.18 billion daily active users (DAUs) -- up 17% year-over-year.  On average, the company counted 1.09 billion mobile DAUs, which represented an increase of 22% year-over-year.

As of September 30, Facebook saw 1.79 billion monthly active users (MAUs) -- up 16% year-over-year -- and 1.66 billion mobile MAUs, which represented an increase of 20% year-over-year.

In September, Instagram said its ad base had surpassed 500,000 -- more than doubling in six months.

 

 

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