Facebook Inc (FB) Plunges As Expenses Grow Faster Than Sales

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Facebook released its second quarter earnings report after closing bell tonight, posting adjusted earnings of 50 cents per share on revenue $4 billion, a 39% year over year increase. Analysts had been expecting earnings of 47 cents per share on revenue of $3.99 billion. In last year’s second quarter, Facebook posted revenue of $2.9 billion and adjusted earnings of 43 cents per share.

Facebook (FB) sees continued user growth

GAAP earnings were 25 cents per share, a 17% decline compared to last year’s 30 cents per share. Net income declined 9% to $719 million. Ad revenue increased 43% to $3.83 billion. Mobile ad revenue was about 76% of ad revenue for the quarter, an increase from 62% of ad revenue in last year’s second quarter. Payments and other revenue fell 8% year over year to $215 million.

Facebook recorded a 17% increase in daily active users, which brought them to 968 million. Mobile daily active users increased 20% to 844 million. Monthly active users increased 13% year over year to $1.49 billion, while mobile monthly active users increased 23% to 1.31 billion.

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Facebook’s (FB) expenses on the rise

The social network’s operating margin declined from 48% last year to 315 this year. Total costs and expenses rose 57% from last year to $1.8 billion. Facebook reported $549 million in capital expenditures and $14.13 billion in cash and cash equivalents and marketable securities.

Facebook management said on the April earnings call that they expect up to a 65% increase in expenses due to increased investments in several areas, including data center infrastructure, more staff, and other areas.

As of this writing, shares of Facebook Inc (NASDAQ:FB) were down 4.06% at $93.05 per share.