LIVE: Facebook Delivers A Big Beat On Revenues, EPS But Its Desktop Business Is In Decline

Mark zuckerbergJulie BortMark Zuckerberg

Facebook reported its Q1 2014 earnings:

  • Revenues: up 72% to $US2.5 billion (analysts expected $US2.36 billion) that’s a huge beat.
  • Earnings per share: $US0.34 (analysts expected $US0.24) that’s a huge beat.
  • Revenue from advertising was $US2.27 billion, up 82% vs Q1 2013.
  • Mobile advertising revenue was 59% of ad revenue, up from 30% in 2013.
  • Payments revenue was $US237 million.
  • MAUs: 1.28 billion
  • CFO David Ebersman stepping down later this year; will be succeeded by David Wehner formerly of Zynga.
  • Cash was $US3 billion – looks like those recent acquisitions of WhatsApp and Oculus have yet to hurt the balance sheet.

The stock went up more than 3% on the news after hours.

Now for some charts!

Note that Facebook’s desktop business is essentially stagnant, maybe even in decline.

All its growth is coming from mobile. This chart from analyst Ian Maude shows that:

Maude attributes that mobile revenue growth to mobile app install ads — and we’d agree. These are the poorly understood ads that drive app downloads. Most people just see the non-app ads for brands and local businesses — but app ads, because they monetize instantly, are more valuable.

This chart from Maude backs up the case that on desktop, Facebook is essentially over:

These users are U.S. only. But the U.S. trends ahead of everyone else when it comes to Facebook because the company was born here and its highest percentage of user penetration is here.

This chart, also from Maude, shows that revenue per user is also down on desktop:

Revenue:

Here are the monthly active users:

The mobile monthly active users:

And the mobile-only people:

We’re covering the release live, followed by CEO Mark Zuckerberg’s earnings call with Wall Street. Refresh this page or click here for updates.

Here’s Zuckerberg’s formal statement on the numbers:

“Facebook’s business is strong and growing, and this quarter was a great start to 2014,” said Mark Zuckerberg, Facebook founder and CEO. “We’ve made some long term bets on the future while staying focused on executing and improving our core products and business. We’re in great position to continue making progress towards our mission.”

It has been a huge quarter for Facebook. In the last three (fiscal) months the company has bought messaging app WhatsApp for $US19 billion and virtual reality headset maker Oculus VR for $US2 billion. It has opened the door for video advertisers, and begun carving out its messaging business into a separate app, Messenger. Lastly, the company has begun rolling out an off-Facebook advertising network.

At the same time, Zuckerberg has begun to outline his vision for the future of Facebook, “unbundling the big blue app.”

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