Facebook beats expectations across the board with blowout fourth-quarter results

The tech giant posted Q4 net income of $3.56 billion, or $1.21 per share.

Facebook Inc.'s ad revenue in the fourth quarter of 2016 rose 53.1% from the same period a year ago, thanks in large part to the social network's robust mobile advertising business that accounts for 84% of its overall ad revenue. We expect the company to report revenue growth of around 44% year-over-year (y-o-y) and meet consensus estimates of $8.4 billion, driven by advertising revenue growth.

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"With only a small fraction of the businesses on Facebook and Instagram advertising, we know we have a lot of opportunity and hard work ahead".

Daily active users (DAUs) - DAUs were 1.23 billion on average for December 2016, an increase of 18% year-over-year.

Monthly active users (MAUs) were 1.86 billion as of December 31, 2016, up 17% from December 2015. Last but not the least, mobile-only monthly users have reached a mark of 1.149 billion up from 1.055 billion in the last quarter. Mobile ad revenues contributed 84% of total advertising revenues, up from 80% in the same period a year ago. At the same time, Facebook was able to significantly grow its revenue for USA users, from $3 billion in Q4 of 2015 to $4.6 billion in Q4 of 2016. "Even if Facebook has to pay US$300 million, it's less than US$0.10 per share and they have US$29.5 billion in cash", he said. Facebook's monthly active user base remained strong across all platforms, including Instagram, WhatsApp and Messenger.

In 2017, 45% of Facebook's total ad revenue will come from the USA, while it will capture 14.7% of the worldwide digital ad market - making it the second ad publisher behind Google, which has a 31.7% worldwide share.

Investors cheered, sending the shares, already up more than 2 percent in regular trading Wednesday, to a record-high $133.23 a share, by more than 2 percent in after-hours trading as well. "In the meantime, core Facebook is growing extremely well, with nearly unprecedented ad revenue growth consistency". Facebook bought Oculus for more than $2 billion in 2014.

The biggest growth in ad sales continues to stem from Facebook's core app.

  • Fernando Stephens