Facebook shareholders aren’t necessarily slamming the “like” button after the company posted good-not-great Q2 earnings, but its stock is still up 2 percent after hours to $169 per share.
The social network reported revenue of $9.3 billion and earnings of $1.32 a share after markets closed Wednesday — moving past analyst expectations of $9.2 billion in revenue and on earnings of $1.13 a share (GAAP). Facebook switched to Generally Accepted Accounting Principles last quarter. Its performance represented a 44 percent increase in revenue year-over-year. The gains were Facebook’s ninth straight quarterly revenue beat.
“We had a good second quarter and first half of the year,” said Mark Zuckerberg, Facebook founder and CEO, in a statement accompanying the earnings. “Our community is now two billion people and we’re focusing on bringing the world closer together.”
The Palo Alto-based company recently announced it had passed the 2 billion monthly user mark, but still found room to grow in Q2 — pushing to 1.32 daily active users, a 17 percent year-over-year increase. Overall Facebook posted 2.01 billion MAUs. Facebook’s growth was spurred on by mobile, with 87 percent of the company’s advertising revenue coming from mobile ads.
One key takeaway highlighted Facebook’s continued dominance, despite the modest beat on estimates: It has $35.5 billion in cash — more than Twitter and Snap’s combined market cap.
Facebook has been a (very successful) one-trick pony to date, with 98 percent of its revenue coming from ads. But CFO David Wehner has tried to temper dreams of ads driving unimpeded revenue growth.
“Ad loads will play a less significant factor in driving revenue growth after mid-2017,” said Wehner during Facebook’s Q1 earnings call in May.
Facebook has been teasing its much-anticipated slate of original content, aiming for shows like “Scandal” and telling several agencies its willing to pay up to $3 million for 30-minute episodes. It didn’t mention original programming in its Q2 earnings report, but may add information during its call.
As Facebook continues to pile up users, it’s looking to monetize additional platforms like WhatsApp and Messenger.
Analysts and investors had their sights fixated on Instagram — its popular picture sharing app — before earnings, looking to the platform as another revenue stream. Facebook didn’t mention the revenue generated by Instagram, though — something it still hasn’t shared. Instagram Stories now has 250 million DAUs — a massive lead on the 166 DAUs of its chief competitor, Snapchat.
Facebook has been wrestling with the spread of “fake news” on its platform and its impact on the 2016 election. Mark Zuckerberg has set out on a tour of small-town America from Iowa to Ohio this year, looking for feedback from local communities — and fueling speculation he’ll run for President in 2020. Its now looking to work with publishers on sharing content — including the development of a subscription service where outlets will post their stories directly to Facebook Instant Articles.
Heading into Wednesday, Facebook shares were up about 40 percent since the beginning of the year. The company will hold a conference call to discuss the earnings at 5 p.m. PT.