Facebook earnings were up on Q3 figures but huge expected investment drove shares down over 10 percent after market.
Growth and investment were the major factors of Mark Zuckerberg’s report. The results show that growth has reached a point of near saturation with 1.32 billion users (approximately half of all internet-connected individuals), and the emphasis needs to change to services, specifically reengineering the digital advertising ‘right-hand column’ for mobile users. Digital advertising revenue saw a 64% growth and mobile marketing made up 66% of revenue.
Other investments over a 3, 5 and 10 year period will see, Zuckerberg said, goals of building services with existing communities, growth of services such as Messenger, Instagram, WhatsApp and Oculus – with the possibility of each becoming their own business – and finally looking to Artificial Intelligence as the future for the world internet.
Figures for Q3
Revenue for the third quarter of 2014 totaled $3.20 billion, an increase of 59%, compared with $2.02 billion in the third quarter of 2013. Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have increased by 58%.
Advertising revenue was $2.96 billion, a 64% increase from the same quarter last year. Excluding the impact of year-over-year changes in foreign exchange rates, revenue from advertising would have increased by 63%.
Mobile advertising revenue represented approximately 66% of advertising revenue for the third quarter of 2014, up from approximately 49% of advertising revenue in the third quarter of 2013.
Payments and other fees revenue was $246 million, a 13% increase from the same quarter last year.
Daily active users (DAUs) were 864 million on average for September 2014, an increase of 19% year-over-year.
Mobile DAUs were 703 million on average for September 2014, an increase of 39% year-over-year.
Monthly active users (MAUs) were 1.35 billion as of September 30, 2014, an increase of 14% year-over-year.
Mobile MAUs were 1.12 billion as of September 30, 2014, an increase of 29% year-over-year.
Net income and EPS - GAAP net income for the third quarter of 2014 was $806 million, up 90% compared to $425 million for the third quarter of 2013.
Excluding amortization of intangible assets, share-based compensation and related payroll tax expenses, and income tax adjustments, non-GAAP net income for the third quarter of 2014 was $1.15 billion, up 73% compared to $666 million for the third quarter of 2013.
Capital expenditures - Capital expenditures for the third quarter of 2014 were $482 million.
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