It's a beat for Facebook, but the stock sinks

Mark ZuckerbergGetty / Win McNameeFacebook founder and CEO Mark Zuckerberg

Facebook just reported its Q2 earnings, with a beat on both the top and bottom line.

Here are the numbers:

  • Revenue: $US4.04 billion vs analyst expectations of $US3.99 billion
  • EPS: $US0.50 vs analyst expectations of $US0.47

Despite the beat, the stock dropped as much as 4.6% after-hours.

We’re not sure why the stock is dropping, but our best guess is because Facebook missed on daily active user expectations.

Facebook’s CFO, for his part, doesn’t seem to think the stock should drop. On CNBC, he called the quarter “great, any way you look at it.”

The stock now hovers at around 2.3% down.

As expected, Facebook saw an increase in the percentage of its revenue coming from mobile, as well as an increase in spending this quarter.

Here are the other important numbers:

  • 968 million daily active users, which is up 17% year-over-year but a slight miss compared to the to 970.5 million estimated. Mobile DAUs were 844 million on average.
  • Only about 17% of Facebook’s daily active users come from the United States and Canada
  • 1.49 billion monthly active users vs 1.475 billion expected, an increase of 13% year-over-year
  • About 76% of advertising revenue came from mobile, up from 62% at this time last year and 73% last quarter
  • As usual, most of Facebook’s revenue came from mobile, but about 5% came from payments and other fees. That’s down from 8% in Q2 2014
  • Costs and expenses of $US2.76 billion, compared to $US1.5 billion Q2 of last year, with the bulk ($US1.17 billion) attributed to research and development. That’s a significant increase, but no real surprise, as Facebook has warned that 2015 would be a year of investment, while it continues to develop new technologies like its virtual reality headset, Oculus
  • Operating margin dropped to 31% from 48% in Q2 2014 thanks to the boost in spending

Here’s a chart that shows where Facebook’s daily active users are coming from:

We’ll be following along live when Facebook CEO Mark Zuckerberg leads the company’s earnings call, so refresh for updates or click here.

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