You might have seen an item in the news the other day about Facebook and Google’s ad revenues and how when put together they exceed all the other print and online advertising income of all publications in the world.
Whether or not that statement is verified, it is still emblematic of the tremendous power these two remarkable companies possess to reach vast audiences in the multiple billions.
Facebook on July 26 in its quarterly earnings report spelled out some impressive numbers that explain in part how this can happen.
Facebook skated right past Wall Street projections again in its quarterly earnings report, despite some concerns that its ad load, or the number of advertisements it can show users without clogging up their news feeds, is nearing a ceiling.
The world’s largest social network reported Q2 2017 earnings of $3.89 billion, or $1.41 per share, up 71 percent from $1.56 billion in the same period a year earlier and easily beating Wall Street expectations. The average estimate of 16 analysts surveyed by Zacks Investment Research was for earnings of $1.34 per share.
The social media company posted revenue of $9.32 billion in the quarter, which also out-paced forecasts; analysts surveyed by Zacks expected $8.47 billion. Facebook’s Q4 2017 income was up a whopping 45 percent from revenue of $6.43 billion a year ago.
Total ad revenue was $9.16 billion.
Mobile advertising now accounts for 87 percent of Facebook’s ad revenue, or $8 billion, compared to 85 percent in Q1 and 84 percent a year ago.
Facebook is doing these high numbers despite the fact that audience growth is beginning to slow down.
Facebook has just over 2 billion monthly users, a number that grew 3.4 percent from 1.94 billion users in Q1, when its growth rate was 4.3 percent. The company now has 1.32 billion daily active users, up from 1.28 billion in Q1 and 17 percent year-over-year.
Shares rose $3.08, or 2.3 percent, to $136.31 in after-hours trading July 26. The stock had closed up $2.91, or 2.2 percent, at $133.23 in the regular session.
“We had a good second quarter and first half of the year,” understated CEO Mark Zuckerberg. “Our community is now 2 billion people and we’re focusing on bringing the world closer together.”