Facebook crushes expectations, stock soars

Mark zuckerbergDavid Ramos/Getty ImagesFacebook CEO Mark Zuckerberg

Facebook just reported its Q1 earnings!

The company beat on both the top and bottom line and the stock surged ~9% after-hours.

Here are the most important numbers:

  • Earnings per share: $0.77 versus $0.62 expected
  • Revenue: $5.38 billion versus $5.25 billion expected and up 52% year-over-year. Ad revenue is up 57% year-over-year
  • Monthly active users: 1.65 billion versus 1.62 billion expected
  • Daily active users: 1.09 billion on average for March 2016. This quarter, 66% of Facebook’s monthly active users were daily active users, which is up from 65% during the same period last year

Along with strong growth across the board on those key numbers, Facebook also once again proved that its mobile business is thriving. It had 1.51 billion mobile MAUs, up 21% year-over-year, and the company made 82% of its advertising revenue from mobile this quarter (versus 73% at this time last year).

There are 894 million monthly active users who only check Facebook on their smartphones. On the company’s earnings call, CEO Mark Zuckerberg said that people spend on average more than 50 minutes a day across its suite of apps, excluding WhatsApp.

Outside of ad revenues, Facebook makes a small amount of money from payments and other fees: $181 million this quarter, which is down 20% year-over-year (the company has previously attributed this decline to a drop in revenue from gaming apps).

The company is also proposing a new class of non-voting stock to make sure that Facebook CEO Mark Zuckerberg retains majority control:

“If the proposal is approved, we intend to issue two shares of Class C capital stock as a one-time stock dividend in respect of each outstanding share of our Class A and Class B common stock. This proposal is designed to create a capital structure that will, among other things, allow us to remain focused on Mr. Zuckerberg’s long-term vision for our company and encourage Mr. Zuckerberg to remain in an active leadership role at Facebook.”

Here are the other important numbers:

  • Total costs and expenses were $3.37 billion, up 29% year-over-year and c apital expenditures were $1.13 billion.
  • Free cash flow for the first quarter of 2016 was $1.85 billion
  • Facebook has 13,600 employees, up 35% from the same time last year
  • Most of Facebook’s revenue comes from North America and Europe with only about 24% ($1.3 billion) coming from Asia-Pacific and the rest of the world. But those areas account for 66% of its monthly active users. The average revenue per user in those regions is still tiny, compared to in the US — $1.56 and $0.91, respectively, vs. $12.43 and $3.98 in the US and Europe.

Here’s a look at where Facebook’s revenue comes from geographically:

Facebook’s blockbuster earnings follow a week of disappointing results, from the likes of Google, Apple, and Microsoft.

Here are the highlights from the company’s call:

Zuckerberg started out the call by discussing the company’s new stock structure. He recalled how having founder control protected Facebook from selling in the early days and allowed it to buy Instagram.

Facebook COO Sheryl Sandberg said that people are sharing and creating 3X more video on the social network year-over-year, and that they’re watching 40% more on Instagram in the last six months.

Facebook’s average price per ad increased 5% and impressions increased 50%.

We’ll be following along live so refresh or click here to update.

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