The other day, Mashable posted an article entitled “Fourteen Things That May Not Exist in 2020.” No. 1 on the list was Metro transit cards; No. 2 was Facebook. Chocolate, of all things, was also on the list.
However, by the looks of things on Nov. 4, 2015, Facebook may be around a lot longer than all of them, including Mashable itself. The company is proving that a social network, if run correctly and offering the right products, can indeed make plenty of money.
Facebook’s growth continues to move up and to the right; it crossed the 1.55 billion-user mark during the last quarter and beat Wall Street analysts’ estimates in its Q3 2015 earnings, reported publicly Nov. 4.
Facebook brought in $4.5 billion in revenue, or 57 cents per share, up a solid 11.3 percent from the $4.04 billion it raked in last quarter. Thomson Reuters analysts had projected 52 cents per share on $4.37 billion in revenue, so they were pretty far off target.
The company posted a profit of $896 million (31 cents a share), up 11 percent from Q3 2014 profit of $806 million.
The stock was selling for $107.73 at 6:30 p.m. EST in after-hours trading after closing at $103.94, improving by 3.6 percent on the day — Facebook’s best intra-day jump since it went public in 2012.
Still, the company needs to be watchful. As fast as Facebook’s revenue increased, expenses rose even more quickly. Total costs and expenses hit $3.04 billion, up 68 percent from a year ago.
Facebook’s monthly users were up by 4 percent quarter-over-quarter from Q2’s 3.47 percent growth. The company attributed this to adding many new users in the developing world.
The Menlo Park, Calif.-based social media giant’s monthly active users rose 14 percent from the previous year to 1.55 billion, as of Sept. 30. Mobile monthly active users came in at 1.39 billion.
Daily active users also climbed 17 percent to 1.01 billion, beating the Street’s expectation of 992 million. Nearly 900 million mobile users were active on the network at least once per day.
Advertising revenue overall jumped 45 percent from the prior year to $4.3 billion. Ad sales for its mobile apps accounted for 78 percent of that, up from 66 percent a year ago.
Facebook has made great strides in mobile ad sales; it didn’t even have a cohesive strategy for them until late 2012, months after it went public.
“We’ve made a lot of investments in our ad business, and those investments are really paying off,” COO Sheryl Sandberg told CNBC. “We think we have the best mobile ad product in the market. We’re able to target, we’re able to measure. We have broad scale.”
On a conference call to analysts and reporters, Sandberg said the company is getting good advertising traction with photo-sharing app Instagram, which has surpassed 400 million monthly active users. “We are really pleased with the marketer demand for Instagram ads,” Sandberg said.
CEO Mark Zuckerberg pointed out that video is becoming a huge draw; the platform now has about 500 million people per day watching 8 billion videos, he said.