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Facebook Earnings Exceed Expectations in Second Quarter

Facebook, the giant social media site, has recorded yet another quarter of impressive growth as profits increased by 186% from last year.

Facebook Earnings Exceed Expectations In Second Quarter

Facebook has posted profits of up $2bn in the three months between April and June, an increase from $719 in the same period last year.

Analysts had expected earnings of $5.8bn but Facebook went well beyond these high expectations to generate $6.4bn in revenue.

According to Mark Zuckerberg, the company’s chief executive, Facebook’s growth has been particularly boosted by the growth in video.

In a statement, he said, “Our business had yet another good quarter. We are especially pleased with the results we are seeing from video as we move toward a world where video is at the heart of our business.”

In after-hours trading, Facebook shares increased 7%.

Video boost

At the heart of its business growth strategy, Facebook has been encouraging advertisers to experiment with mobile and video ads.

Up to 84% of the company’s revenues can be attributed to mobile advertising, up from 76% at the same time last year.

As advertisers increasingly move away from traditional advertising, they are pouring more money on digital platforms such as Facebook.

An RBC Capital Markets analyst pointed out that Facebook still has room and opportunities for growth including video advertising.

The number of monthly active users on the platform increased by 15%, totaling to 1.71 billion as of 31 June 2016, compared to just a 3% increase for Twitter in the same period.

While the number of daily active users reached the one billion mark for the first time, users are also spending more time on the site.

According to Analysts at Cantor Fitzgerald, Facebook remains a top pick due to exceptional targeting potential, its wide user base and viable opportunities for monetization.

For a long time, Facebook’s growth has been attributed to mobile but video and instagram are the next big things for the social media platform.

At the same time, the company has been introducing new services such as messaging apps, and instagram video and photo sharing. Advertisers also have innovative ways to reach their target audience including through Facebook Live for live streaming video.

In Asia alone, revenue increased 19% while in Europe that figure was 21%.


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