Facebook Reports Big Revenue Increase, Thanks to Mobile

Seventy-six percent of advertising revenue came from mobile apps, up from 62 percent in Q2 2014 and 73 percent in Q1 2015.

There a debate going around Silicon Valley about which might be the best-run company, and Facebook is always in the conversation.

In its Q2 2015 earnings report July 29, the social network reported revenue of $4.04 billion, beating Wall Street analyst projections of $3.99 billion. This represented a 39 percent increase in year-over-year revenue (it totaled $2.9 billion in the same period last year), due in large measure to national brands that are spending more to advertise to the company's 1.49 billion monthly users.

The latter figure, by the way, represents a 13 percent increase over a year ago, so it's clear that the Menlo Park, Calif.-based company isn't losing momentum in that department. In fact, Facebook has been picking up older users faster than it has attracted younger people, but that's another story.

Facebook claims 968 million daily active users, up 17 percent year-over-year.

Profit was $719 million, down 9 percent from Q2 2014's $791 million. This, the company said, was due to higher operating expenses of $2.76 billion, compared to $1.5 billion a year ago. Facebook had advised investors that 2015 was going to be a year of investment in R&D, so this was not a surprise. For example, Facebook is developing Oculus, a 3D virtual reality headset, in addition to other potential products.

"This was another strong quarter for our community," CEO and founder Mark Zuckerberg said in summarizing the earnings call to analysts and journalists. "Engagement across our family of apps keeps growing, and we remain focused on improving the quality of our services."

Zuckerberg said 700 million people use the company's popular Messenger chat app regularly and that Facebook now supplies 1.5 billion searches per day. More than 450 million people use the Events app and 850 million people use Groups, Zuckerberg said. He also said that Facebook Pages are now sharing more than 40 percent more videos than a year ago.

Analysts said that growth is these newer businesses has been significant.

"Key catalysts such as video ads, Instagram monetization, and off-platform monetization should become more meaningful growth drivers for the company," Stifel analysts said in a media advisory.

The company is making great strides in mobile-related businesses. Mobile monthly active users totaled 1.31 billion as of June 30, 2015, an increase of 23 percent year-over-year, Facebook said. Seventy-six percent of advertising revenue came from mobile apps, up from 62 percent in Q2 2014 and 73 percent in Q1 2015.

The stock closed at $96.99 but dropped 3.3 percent to $93.76 in after-hours trading on the Nasdaq.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 15 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...