Facebook Beats Q2 Expectations, Mobile Climbs To 41 Percent
Facebook announced Q2 2013 revenues this afternoon. It beat analysts’ consensus expectations with $1.81 billion in total revenue. Ad revenue was 88 percent or $1.60 billion, representing 61 percent growth vs. last year.
Facebook surprised especially with a big jump in mobile ad revenue, which climbed to 41 percent of the total (vs. 30 percent last quarter). In real dollar terms the company made $656 million on mobile ads in the quarter.
Non advertising revenue (payments/fees) came in at $214 million.
Facebook published the following daily and monthly user numbers for the quarter:
- Daily users were 669 million, a 27 percent increase year over year
- Monthly users grew 21 percent to 1.15 billion
- Mobile monthly active users grew 51 percent to 819 million. Daily mobile users were 469 million.
- There were 219 million mobile only users
- One million active advertisers on Facebook “driven by significant growth in local businesses.”
Obviously mobile is the big story in this earnings release. Facebook has very quickly grown mobile ad dollars from a small percentage of overall ad revenue to a number that starts to approach half of all ad revenue. It can do that partly at will by dialing up or down the number of ads it shows in the mobile news feed.
Still it’s an impressive feat and makes the social site second only to Google in mobile ad revenue. We’ll be listening to the conference call and record any interesting metrics, comments or observations. The call begins at 5 pm US Eastern time.
Conference call notes:
CEO Mark Zuckerberg, in his opening remarks, celebrated Facebook mobile usage. He disputed the idea that US teens are less engaged or using Facebook less in any way.
He also touted Instagram growth and video adoption. However he said that Graph Search was a long-term proposition.
Ads make up 1 in 20 items in newsfeed. “We’re going to invest more in improving the quality of ads that we show.”
COO Sheryl Sandberg repeated that the company has one million active advertisers, which is more than double a year ago. Simplification is the driver of adoption according Sandberg.
She added that local businesses are a large percentage of the one million advertisers. Sandberg also said that 18 million local businesses now have Facebook Pages (on a global basis).
CFO David Ebersman said that time spent per person continues on Facebook to increase. In the aggregate in June that meant over 20 billion minutes globally. He added that there were now 130 million active Instagram users.
Newsfeed ads are and will continue to be the main driver of ad revenue growth, he explained.
Question & Answer session:
Question about mobile revenue: Sandberg says that mobile app install ads are a small but important part of mobile revenue
The number of marketers using Custom Audiences doubled in Q2 and roughly have of AdAge 100 agencies/companies are using the product.
Zuckerberg took a question about monetization of Instagram. He said that it would eventually generate revenue through advertising.
Question about non-US opportunities: Ad revenue opportunities exist throughout the globe, Sandberg says. She says that there are now 41 local sales offices. In Asia in particular Sandberg sees meaningful growth happening.
FBX is “quite small” explained Sandberg.
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