5 Key Takeaways From Facebook’s Latest Earnings Call

Earnings: What analysts were expecting

• Analysts were expecting a profit of $0.32 a share in the quarter, up from just $0.19 a share in the year-ago period.

• Wall Street was looking for revenue of $2.8 billion in the second-quarter. Source: The Motley Fool.

Earnings: What Facebook delivered

• Facebook trounced analysts estimates, delivering EPS of $0.42 in the quarter.

• Revenue increased 61% to $2.9 billion, which also beat expectations.

Profit more than doubled in the quarter.

Source: The Motley Fool.

1. International growth opportunities

• This creates a growth opportunity for Facebook in emerging markets like India and China.

• U.S and Canada accounted for $1.3 billion of Facebook’s revenue in Q2.

The bulk of Facebook’s revenue comes from the U.S. and Canada today.

Source: Facebook.

2. Facebook won’t sell products directly

• However, the company said it doesn’t plan to sell products directly to consumers, but rather will act as a streamlined way for people to buy things directly from Facebook partners.

Facebook is testing a “Buy” button in the U.S.

Source: The Motley Fool.

3. Mobile continues to gain momentum

• Mobile now accounts for 62% of Facebook’s total revenue.

• Mobile ad revenue was $1.6 billion, up from $660 million a year ago.

650 million people using Facebook services on mobile every day.

Mobile monthly active users. Source: Facebook.

4. Building out a search feature

• The social media giant is working on indexing users and content to create a compelling search function within The Facebook platform.

Facebook now gets more than a billion search inquiries per day.

Source: The Motley Fool.

5. Creating value for major brands on Facebook.

• More than 30 million small businesses use Facebook to connect with customers, of which 1.5 million are active marketers on the site.

• New ad formats including auto-play video ads and Instagram ads should drive revenue growth going forward.

Advertising dollars by user geography. Source: Facebook.

Foolish final thoughts

Facebook is on fire these days and shows no signs of slowing down. Not only does the company now have 1.32 billion monthly active users, but it is also

proving it knows how to monetize those users through compelling advertising and mobile

marketing efforts. Mobile advertising grew 151% year-over-year. If these trends continue, so too

should Facebook’s ballooning stock price.

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