Yesterday, Facebook released its earnings for the second quarter of 2014. The figures show that the company’s revenue is growing steadily for the second quarter of the year, thanks to its focus on advertisements especially with Ads on mobile.
According to the company, there are 1.32 billion active users on the social networking website, of which around half of the users access it from their mobile devices.
The company posted revenue of $2.9 billion which was a 61% year on year increase as compared to the $1.81 billion generated last year. The net income increased from $333 million last year to $791 million in this year’s quarter. Finally, the operating profit margin reached a record 48% in this quarter, thanks to the increased cost efficiency measures.
The company’s increased efforts on the mobile platform are now paying off as the revenue from the mobile platform constituted almost two thirds of the total revenue.
The total advertising revenue represented $2.68 billion of $2.9 billion, which was a staggering 67% increase from the same quarter last year. Of that, around 62% came from mobile revenue, which was much better than the 47% that the platform contributed to the total revenue last year.
“The results this quarter show our continued focus on improving our core products and business,” Mark said during the company’s earnings conference call yesterday. “We’re going to continue investing aggressively in areas that are important for our mission and long term strategy, but we’re also going to stay focused on our core products and business.”
But Mark warned investors that the company will be busy developing new products and spending heavily on them without near term prospects of generating revenue. By new products and services, he meant things like Facebook search, private messaging and virtual reality.
But end of the day, eventually these products too will be generating revenue for the company which will further improve its earnings.
“We think it is going to be years of work before those are huge businesses for us, he said. I really can’t underscore this enough that we have a lot of work to do. We could take the cheap and easy approach and put ads in and do payments and make money in the short-term, but were not going to do that.”
And given that the company is doing well in the recent quarters, he can afford to do that.
With the current market value of shares, Facebook is valued at $190 billion, which is almost half of Google’s Net worth and more than Amazon’s market value.
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