Facebook revenue soars thanks to strong results in mobile advertising revenue

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Facebook has continued strong growth during the last quarter, driven by mobile advertising revenue. Ad revenue grew 63% year-on-year, with mobile advertising accounting for 84% of the media network’s $6.2bn revenue for the quarter.

Facebook ad revenue bolstered by mobile


Source: ft.com

Revenue from mobile ads jumped 80% in the second quarter at a 59% growth rate.

Shares leapt up 6% following the announcement which beat analyst and investor expectations.

Overall, Facebook added 220 million new monthly active users over the past 12 months. It now has a total of 1.7 billion users with over 90% of them using Facebook on their mobile devices. Now, it’s easy to see where those ad dollars are coming from.

Facebook DAU user growth


Source: bloomberg.com

Dave Wehner, Chief Financial Officer, Facebook, said:

david whener

“Mobile continues to be the strength.”

Mobile video advertising has further bolstered Facebook’s offering and the company continues to innovate its products to meet demand.

Facebook added that in terms of user visits on its app as well as time spent in-app, the latest quarter has been its strongest so far.

However, it should be noted that this factors in users across Facebook’s other apps such as Instagram and Messenger, both of which scored audience milestones after the last few months. Instagram now has 500m members, whilst Messenger boasts a billion active users.

Whilst it’s likely that some of this growth will halt somewhat during the rest of the year, Wehner cautioned that ad growth could slow during mid-2017 due to the platform reaching maximum advertising load.

However, Rahul Shah, Chief Executive, Ideal Asset Management, rejected these findings, saying:

rahul shah

“There’s a common misconception that the law of large numbers will prevent Facebook from growing further. But I think what they’re missing is that they’re stealing ad dollars from every other source there is. Pricing will continue to rise and they’ll continue to beat estimates.”

The company confirmed that it would focus on mobile-first products and particularly video-first products and innovations.

Facebook firmly believes that video is the future and it certainly has the power and audience to drive the format across all its networks and messaging platforms.

The promotion of its Facebook Live video service was a first step into that direction.