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


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.