Facebook revenue jumps on blistering ad sales growth

The net income attributable to Facebook’s stockholders rose to $2.05 billion, or 71 cents per share, in the second quarter ended June 30, from $715 million, or 25 cents per share, a year earlier. The social network even blew past that high bar with $6.4 billion in revenue and earnings of 97 cents per share. Analysts on average had expected a profit of 82 cents per share, according to Thomson Reuters I/B/E/S.

Facebook shares rose more than 7 per cent in extended trading. As of Wednesday’s close, the stock has risen 31% in the past year.

Facebook said about 1.71 billion people used the site monthly as of June 30, up from 1.49 billion a year earlier. Daily users rose to 1.13 billion.

All of that comes in stark contrast to Twitter, which reported this week that its user growth is stalled around 300 million.

Facebook still has several untapped areas for revenue opportunities, including its WhatsApp and Messenger apps, both of which have more than 1 billion users.

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

NEW ADVERTISING FORMATS: New advertising formats with better targeting for Facebook and photo-sharing service Instagram are gaining traction with marketers, analysts say, and have the potential to deliver larger budgets and new verticals such as travel.

Analysts had feared Facebook’s growth would show new signs of deceleration, but the behemoth is reporting steady growth in mobile revenue, even ticking up slightly the last four quarters. This growth resulted a mobile ad revenue totalling $5.42 billion, up 81 percent year over year and representing 84 percent of total ad revenue this quarter. His estimate: Messaging could generate more than $10 billion in 2020 revenue, more than 10% of Facebook’s revenue. However, with brands like Google and Foursquare increasing location-based ads, Facebook was forced to develop them.

Facebook has yet to break out revenue for Instagram, but many analysts are optimistic about its efforts. It also means more eyeballs and more demand from advertisers. In a recent note, Macquarie Research analysts said Snapchat trends were “concerning”.

Facebook specifically highlighted the success of video advertisements as a reason for its strong results. At a Fortune conference last month, a Facebook executive predicted the social network will be “all video” in five years.

The emphasis on video also includes Facebook Live, its live-video product launched widely earlier this year.