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For a 16th straight quarter, Facebook beats earnings estimates, reaches 1.71 billion users

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And Facebook has done it yet again. With a regularity that is frankly amazing, the social networking giant has beaten earning estimates for the 16th time out of the 17 quarters it has spent as a public company. The company has managed to clock $6.44 billion in revenue and an impressive $0.97 earnings per share, in the second quarter of 2016.

Yes sir. The company, which seems to enjoy proving financial pundits wrong, has managed to beat the forcasted earnings estimates of $6.02 billion and $0.82 EPS by a fair margin — .42 billion and .15 cents per share respectively, to be exact. Profits wise, the company finds itself adding somewhere around $2.05 billion to its coffers. Very impressive!

Expectedly, the company stocks at the Wall street did a victory dance following the announcement, which catapulted them to $132.60 in after hours trading — a long way above Facebooks $38 IPO that took place in 2012 and broke all records with respect to the excitement — and the funds — it generated. Although to be fair, the shares had already reached an all time high of $123.24 prior to the announcement.

Speaking of users, the company added almost 60 million monthly users to its ranks this quarter, to reach a total of 1.71 billion. Perhaps even more impressive than the above stat is the fact that the company finally managed to reach 1 billion daily users over mobile! Overall, the total DAUs reached 1.13 billion –up 17% from the previous year, while MAU count also showed a 20% increase on mobile, reaching 1.57 billion users. Average revenue per user has also gone up by a surprising 15% over last quarter, to reach $3.82.

Unsurprisingly, a significant portion of the social networking behemoth’s revenue came from mobile advertisements. The company made $6.24 billion advertising, almost 84% of which stemmed from mobile devices. This marks an 8%  growth over last year when the company made around 76% of its advertising revenue on mobile devices.

Emphasizing the importance of Video in the company’s future plans, Mark Zuckerberg, Facebook founder and CEO said,

Our community and business had another good quarter. We’re particularly pleased with our progress in video as we move towards a world where video is at the heart of all our services.

Meanwhile, the company’s capital expenditures for the second quarter of 2016 remained very slightly shy of the 1 Billion mark at $995 million. It also appears to be stockpiling for some major acquisitions and its cash, cash equivalents and marketable securities were at a staggering $23.29 billion at the end of the June 2016.
Another interesting fact revealed at the social networking giant’s conference call was the number of searches.Apparently, that tiny little bar near the top of the page — the bottom on mobile — is used over 2 billion times, every single day! This also marks a very impressive y-o-y growth of half a billion searches daily.

Speaking on the topic, Zuckerberg said,

 The growing way that people use search is to find what people are saying about a topic across more that 2.5 trillion posts. Now people are doing more than 2 billion searches a day between looking up people, businesses, and other things they care about.

Allow us to remind you that more searches about different topics equate to more conversations and greater buzz. While Twitter is the usual place for buzz about trending topics, the number of searches and their rate of increase is a clear indication of Facebook catching up to the little blue bird.

In short, the company is booming. More users, increasing average earnings per user, increasing MAUs and DAUs and finally, a surge in the number of searches — which is another potential revenue source just waiting to be utilized — all point towards a very successful quarter.

Not that its the first one for Facebook, but still the company has performed exceptionally well thanks to secondary properties — Whatsapp, Instagram — doing well, good strategic decisions and several user first policies — including a recent algorithm tweak that saw it give higher precedence to posts by loved ones over those by publishers. The latter came after a string of criticism and allegations that it was modifying its algorithms to suppress some news while pushing others to the top.

Meanwhile, the company has further emphasized and entrenched its position as the clear leader in social networking and communications on the planet. In fact, i think that if there are actually aliens out there and they visit us like the movies show, even they must shake their heads sometimes in wonder at this global phenomenon that we call Facebook.

A bibliophile and a business enthusiast.

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