Hawk Trade analysts have reported that Facebook, the world’s largest social-networking site has posted blowout profit and revenue numbers that beat analysts’ expectations by a convincing margin.
Q1 revenue rose 72% to $2.5 billion against expectations of $2.36 billion. Net income came in at $642 million or 25 cents per share while profit, ex items, hit 34 cents a share against estimate of 24 cents.
The standout data in the earnings report was the percentage of revenue that came from mobile advertising, an area that was once considered Facebook’s Achilles Heel.
At the time of the company’s IPO in 2012, mobile advertising contributed virtually nothing to Facebook’s revenues but in two short years, it has managed to defy critics and monetize the increasing popularity of its mobile service.
A Hawk Trade tech analyst said, “There was a lot of skepticism about Facebook at the time of the IPO but since then, they’ve made some very impressive strides in terms of acquisitions and also in terms of their ability to generate revenue.”
The company recently acquired popular mobile messaging service, WhatsApp for $19 billion in a bid to reestablish a presence within the younger demographic of the social networking space which had begun to deteriorate as Facebook’s popularity began to appeal to older users.
“The last thing kids want is to be on the same social networks as the ones their parents use and the acquisition of WhatsApp represented a good way to keep in touch with younger users while also gaining a foothold in real-time communications,” said the Hawk Trade analyst.
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