Facebook doubles fourth quarter profits to $1.56bn

Facebook has just posted its earning results for the quarter and the year, and the standout bits are that it smashed financial records and has on average 1.04 billion daily active users – most of which log on from mobile devices.

The company’s total revenue rose to $5.84bn (£4.10bn) from $3.85bn (£2.7bn) a year earlier, with ad revenue increasing 56.8 per cent during the Christmas holiday shopping period, when spending on advertising normally peaks.

Mobile ad revenue also saw a big jump – it now makes up 80 percent of total advertising revenue, up from 69 percent a year earlier. “Our community continued to grow and our business is thriving”, Facebook Founder and Chief Executive Officer Mark Zuckerberg said in a statement.

The social network beat analyst expectations across the board, and cemented its place as the largest site of its kind in the world.

During the same period, Facebook’s profits also doubled year-on-year to £1.56bn, despite the company investing heavily in expansion of its mobile ad network, along with ambitious projects like virtual reality, artificial intelligence and its Internet.org initiative.

In another sign of Facebook’s progress, its share of the digital advertising market rose from eight per cent in 2014 to 10 per cent worldwide a year ago, according to the research firm eMarketer Inc.

“The success will give Zuckerberg plenty of leeway to explore new options and new revenue streams, like virtual reality, in the future without too much scrutiny”.

Among other areas of strength, Facebook seems to be finding traction with its Audience Network, which achieved an annual run rate of $1 billion in revenue, last year.

Headquartered in Menlo Park, California, the social networking service had over 1.18 billion monthly active users as of August 2015. However, revenues are still outgrowing costs, so operating margin expanded from 29% of sales in the fourth quarter of 2014 to a big 44% of revenue in the fourth quarter of 2015.

Facebook’s photo-sharing service Instagram, in particular, is poised to become a material contributor to revenue in 2016, the analysts said.

The strong revenue growth was supported by increased revenue per user, as the growth in the number of users slows. Average mobile daily active users came in at 934 million for December, up 25 percent year-over-year.

“It also reported full-year earnings”.