World’s Largest Social Networking Giant- Facebook Posted Second Quarter 2014 Results

The world’s largest social networking giant, Facebook Inc reported financial results for the second quarter ended June 30, 2014.

“We had a good second quarter,” said Mark Zuckerberg, Facebook founder and CEO. “Our community has continued to grow, and we see a lot of opportunity ahead as we connect the rest of the world.”

World’s largest Social Networking Giant

Facebook said it has 1.5 million active advertisers, up from 1 million last June. Facebook’s Chief Operating Officer Sheryl Sandberg said that Instagram is “seeing great results” in advertising but is “still taking it really slow.”

She also added said that both advertisers and users had shown great interest during the second quarter.

Investors bid up shares of Facebook roughly 5 percent to $75.13 in after-hours trading on Wednesday, giving the Internet company a roughly $190 billion valuation, putting it on par with IBM Corp.

“It might be more expensive from a market cap perspective, but I don’t think anyone was expecting this level of profitability,” JMP Securities analyst Ronald Josey said.

Facebook posted $791 million in net income, compared with $333 million in the second quarter of 2013. The company reported earnings of 42 cents a share, excluding one-time items, on revenue of $2.91 billion, a growth of 61 percent from the same quarter last year. Shares turned higher to hit an all-time high in extended hours trading after an initial decline following the results.

Second Quarter 2014 Operational Highlights

  • Daily active users (DAUs) were 829 million on average for June 2014, an increase of 19% year-over-year.
  • Mobile DAUs were 654 million on average for June 2014, an increase of 39% year-over-year.
  • Monthly active users (MAUs) were 1.32 billion as of June 30, 2014, an increase of 14% year-over-year than WhatsApp (500 million), Twitter (255 million) and Instagram (200 million)- combined.
  • Mobile MAUs were 1.07 billion as of June 30, 2014, an increase of 31% year-over-year. That’s about 1/7 of the people on the planet Earth.

“What’s happening here is advertisers are getting a good yield and a good return on investment with mobile ads,” said Martin Pyykkonen, senior research analyst at Rosenblatt Securities. “So they’re working from the advertisers’ side.”

Revenue from advertising was $2.91 billion, a 61% increase from the second quarter in 2013, the company said.

Mobile advertising, which accounted for 62% of advertising revenue for the second quarter 2014, increased 30% from the second quarter 2013.

Mark Hawtin of GAM called Facebook’s results “exceptional.”

“The financials are really strong across the board. For me, what was really important was they had a beat on advertising,” he said. “That’s what really was needed to drive the shares higher.”

For more details please visit Facebook’s site.