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Facebook Inc Surges After Earnings Beat

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Facebook Inc (FB) released its latest earnings report after closing bell tonight, posting adjusted earnings of 77 cents per share and $5.4 billion in revenue. Analysts had been expecting earnings of 62 cents per share and $5.25 billion in revenue. In last year’s first quarter, the social network posted earnings of 42 cents per share and $3.54 billion in revenue.

Facebook Inc Surges After Earnings Beat

Facebook’s mobile ad revenue share rises

Facebook Inc (NASDAQ:FB)’s reported earnings were 52 cents per share.  Ad revenue rose from $3.3 billion in the year-ago quarter to $5.2 billion, while payments and other fees revenue declined from $226 million to $181 million. Mobile ad revenue made up about 82% of total ad revenue, an increase from 73% in the year-ago quarter.

Tonight’s report is the first to include any impact from the recently released Oculus Rift VR headset, although the press release doesn’t have any specific numbers so we’ll have to wait for the earnings call on this one.

Monthly active user growth was a concern, but maybe not anymore

The social network averaged 1.09 billion daily active users in March, representing a 16% increase from last year. Monthly active users increased 15% year over year to 1.65 billion as of the end of march. The number of mobile daily active users climbed 24% to 989 million on average last month, while mobile monthly active users amounted to 1.51 billion, representing a 21% increase.

Canaccord Genuity warned before tonight’s print that because of how big of a favorite Facebook has become among investors, it must not only meet but exceed estimates in order for the reaction to be positive, and it certainly has. They also said that they were a little worried about monthly active users. They are expecting a 12.3% increase for this year, marking a deceleration from last year’s 13.8% increase.

They warned that if monthly active user growth slows into the single digits, investor sentiment could be derailed and pointed to comScore data which suggested that U.S. traffic on the social network slowed in the first quarter. The research firm found that total U.S. traffic declined year over year in each of the months in the first quarter, and although Canaccord analysts defined this as “an imperfect indicator,” they still saw it as presenting a risk to monthly active user growth.

FB to issue new stock class

Facebook Inc (NASDAQ:FB) also said tonight that it will create a new non-voting class of stock in a move that’s similar to what Google parent Alphabet did years ago. The new class will essentially enable CEO Mark Zuckerberg to retain control of the company he founded while still being able to issue new shares. If the application to issue the new class of shares is approved, Facebook will issue two Class C shares as a one-time dividend for every Class A and Class B share owned.

Facebook Inc (NASDAQ:FB) shares surged in after-hours trades, climbing by as much as 6.71% to $116.20.

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