Facebook smashes earnings, stock soars

Mark zuckerbergSteve Jennings/GettyFacebook CEO Mark Zuckerberg

Facebook just smashed its Q2 earnings.
The company accelerated its revenue growth in the second quarter, delivering a 59% increase that blew past Wall Street targets and sent its shares up 8% to a new all time high in after hours trading on Wednesday.

The stock is now only up about 6.7%.

Here are the most important numbers:

  • Q2 earnings per share (adjusted): $0.97 vs expectations of $0.82
  • Q2 revenue: $6.44 billion versus $6.02 billion expected, up 59% year-over-year
  • Q2 monthly active users: 1.71 billion (1.69 billion expected), an increase of 15% year-over-year
  • Q2 daily active users: 1.13 billion (1.12 billion expected), up 17% year-over-year

The ratio of DAUs and MAUs — the best way to measure Facebook’s engagement — held steady at 66%, despite worries from Wall Street that increased competition from the likes of Snapchat is stealing away people’s attention.

With those numbers, Facebook beat Wall Street expectations on every single important metric.

Once again, the company’s growth is particularly strong on mobile, where it saw 1.03 billion of its DAUs (up 22% year-over-year) and 1.57 billion of its MAUs (up 20% year-over-year). No surprise, about 84% of Facebook’s advertising revenue came from mobile, up from about 76% in Q2 2015.

In light of the company’s recent explosion in video, Facebook COO Sheryl Sandberg told Bloomberg that she’s looking for short-form video content deals. This wouldn’t be the first time Facebook has paid for content: It has divvied out more than $50 million to publications like Buzzfeed and Business Insider to
experiment with its Live video platform.

As usual, Facebook didn’t specifically break out its Instagram ad revenue, though we expect to hear more about the photo-sharing app’s growth on the call, as well as about its plans for super-popular chat app Messenger.

Here are the other important numbers:

  • Total costs and expenses were $3.69 billion, up 33% year-over-year and c apital expenditures were $995 million.
  • Free cash flow for the first quarter of 2016 was $2.20 billion.
  • Only 3% (197 million) of Facebook’s revenue came from payments and other fees, down 8% year-over-year — the company has previously attributed this decline to a drop in revenue from gaming apps.
  • Most of Facebook’s revenue comes from North America and Europe with about only 25% ($1.6 billion) coming from Asia-Pacific and the rest of the world. But those areas account for 67% of its monthly active users. The average revenue per user in those regions is still tiny, compared to in the US: $1.77 and $1.13, respectively, versus $14.34 and $4.72 in the US and Europe.

Here’s a look at where Facebook makes its money:

Business Insider will be covering Facebook’s results live, including its earnings call, so hit refresh or click here for the latest updates.

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