Facebook released the earnings results from its first fiscal quarter after closing bell tonight, posting adjusted earnings of 42 cents per share on $3.54 billion in revenue, a 42% increase. Excluding negative impacts from foreign currencies, revenue would have increased 49% year over year.

Facebook Inc Edges Out Earnings Estimates, Misses Revenue

Analysts had been looking for earnings of 41 cents per share on $3.56 billion in revenue for the quarter. In last year’s first quarter, the social network posted earnings of 35 cents per share on $2.5 billion in revenue, beating estimates on both the top and bottom line.

Key metrics from Facebook’s earnings report

Reported earnings were 18 cents per share, compared to 25 cents last year. GAAP net income was $512 million, compared to $642 million last year, while non-GAAP net income grew from $926 million last year to $1.189 billion this year.

Facebook reported 936 million daily active users, a 17% year over year increase, and 798 mobile daily active users, a 31% increase. The social network’s monthly active users were 1.44 billion, a 13% increase, while mobile monthly active users were 1.25 billion, a 24% increase.

Ad revenue rose 46% to $3.32 billion, with mobile ad revenue making up about 73% compared to about 59% in the same quarter last year. Revenue from payments and other fees fell 5% year over year to $226 million.

“This was a strong start to the year,” said Facebook founder and CEO Mark Zuckerberg said in a statement. “We continue to focus on serving our community and connecting the world.”            

Facebook’s expenses on the rise

Costs and expenses increased 83% to $2.61 billion on a GAAP basis. On a non-GAAP basis, costs and expenses increased 57% to $1.7 billion. The social network’s GAAP operating margin was 26% in the March quarter, compared to 43% in the same quarter a year ago. Facebook’s non-GAAP operating margin fell from 57% last year to 52% this year.

The social network reported $502 million in capital expenditures for the quarter and free cash flow of $1.2 billion. Facebook had $12.41 billion in cash and cash equivalents at the end of the quarter.