Facebook mobile sales surge, CFO to exit
The social network's blossoming smartphone business brought in 59 percent of advertising revenue during the first three months of 2014.
Facebook sales mushroomed 72 percent to $2.5 billion in the first quarter of 2014. The company also posted earnings of 34 cents per share when excluding stock-based compensation and other expenditures.
Analysts were anticipating adjusted earnings of 24 cents per share on revenue of $2.36 billion for the quarter.
Facebook's first report of the year proved that the social network's advertising business is as healthy as ever, especially on mobile, where it made 59 percent of its advertising revenue for the quarter. In total, Facebook made $2.27 billion from ad sales, meaning the company pulled in roughly $1.34 billion from mobile. The company's payments business once again played a marginal role, bringing in $237 million in revenue for Q1.
The social network closed the quarter with 1.28 billion monthly active users (MAUs), for a year-over-year increase of 15 percent. The company's daily active user base (DAUs) increased by 21 percent to 802 million people. Mobile MAUs, meanwhile, grew 34 percent to 1.01 billion people.
The company also announced that CFO David Ebersman will be stepping down later this year to take a position in the health-care industry. He will be succeeded by David Wehner, who's currently Facebook's vice president of corporate finance. Ebersman joined Facebook in 2009 and played an instrumental role in the company's initial public offering, though he took a lot of heat over the IPO as shares eroded in value for several months after Facebook went public.
"Facebook's business is strong and growing, and this quarter was a great start to 2014," CEO Mark Zuckerberg said in a statement. "We've made some long-term bets on the future while staying focused on executing and improving our core products and business. We're in great position to continue making progress towards our mission."
As Zuckerberg implies, the first few months of the year proved uncommonly eventful for Facebook, as it agreed to buy international messaging sensation WhatsApp for $19 billion and virtual reality technology company Oculus for $2 billion. The purchases, however, aren't expected to bear financial fruit for years to come. Instead, Facebook's extravagant pickups suggest an anxiety around the future viability of its own services and a willingness to spend whatever it takes to ensure that the company remains the dominant social network.
Facebook's first-quarter report card also comes a week ahead of its f8 developer conference in San Francisco. Rumors are swirling that the company will use the event, which has been on hiatus for three years, to showcase a mobile advertising network that would give it the ability to run its mobile ads in applications other than its own. Such a platform would pit the company directly against Google, which operates the AdMob network and commands, according to eMarketer, close to 50 percent of the worldwide mobile advertising market.
Facebook shares closed Wednesday at $61.36, down 2.65 percent for the day. Facebook is making up those losses on the after-hours market, with shares gaining back around 3 percent at the time of publication.
Update, 3:15 p.m. PT: Adds details on David Ebersman.