Facebook beats expectations across the board with blowout fourth-quarter results (FB)
Facebook
Facebook reported a blockbuster fourth quarter on Wednesday, as mobile ads drove a 50% jump in revenue that far outpaced the company's spending, and as the social network moved closer to amassing an unprecedented audience of two billion monthly users.
Facebook managed to beat growth targets across the board despite concern that it's running out of room to place ads in the News Feed.
Still, the company reiterated that it expects its ad revenue growth rate will "come down meaningfully" in 2017.
The cautious outlook may have tempered Wall Street's reaction to Facebook's Q4 results. Shares of Facebook, which have risen about 14% since the start of the year, were up about 1.5% in after hours trading on Wednesday.
Facebook executives on a conference call Wednesday stressed the social network's continuing ability to keep users coming back on a regular basis, as well as the popularity of its Instagram mobile photo app — important assets as the company seeks to fend off competition from Snapchat, whose parent company is set to make its Wall Street debut next month with a high-profile IPO.
Here are the key numbers from Q4:
- EPS (adjusted): $1.41 vs. $1.31 expected, up from $0.79 in the year-ago period.
- Revenue: $8.81 billion vs. $8.51 billion expected, up 51% from $5.84 billion in the year-ago period.
- Monthly active users: 1.86 billion vs. 1.84 billion expected.
- Daily active users: 1.23 billion vs. 1.21 billion expected.
Mobile continued to play a key role in revenue growth during the last three months of 2016, with mobile ads accounting for 84% of total ad revenue during the quarter. Facebook's average revenue per user in North America swelled to nearly $20 in Q4, up sharply from less than $5 per user when Facebook held its IPO five years ago.
Facebook's ratio of monthly to daily active users — an important statistic used to judge user engagement with the service — stayed steady at 66% for the fourth consecutive quarter.
Zuckerberg also flagged video as a "megatrend" that will eventually provide a tailwind to the business comparable to the mobile ad business.
Here are some charts showing Facebook's growth:
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