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Facebook Q4 Results Beats Market Expectations; Mobile Ad Revenues Surge!

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Facebook has just released its Q4 2013 results, and going by the numbers, it’s excellent. In fact, this was the first billion dollar mobile ad revenue quarter as Facebook generated staggering $1.25 billion from mobile ads. Overall, revenues have beaten market expectations and the stock market has reacted positively to the results.

The single biggest positive factor which was witnessed in the earnings report was the fact that now, 53% of Facebook’s revenues is coming from mobile advertisements. At the start of the year, Mark Zuckerberg had said they are looking forward at growing revenues from mobile platform, and the gamble has paid off.

When Facebook’s IPO was launched in May, 2012, mobile revenues stood at zero. But within 19 months, Facebook has tremendously improved their mobile offerings as advertisers are now ready to spend on the platform.

While releasing the report, Mark said, “If 2012 was the year where we turned our core product into a mobile product, then 2013 was the year where we turned our business into a mobile business. I expect 2014 will be the year where we begin to deliver new and engaging types of mobile experiences.”

As of December 2013, more 1.23 billion users are on Facebook, generating annual revenues of $7.9 billion, which is 55% more compared to last year.

For the last quarter ending December 31, 2013, Facebook generated revenues of $2.59 billion, out of which 53% came from mobile advertisements. Share holders earned 31 cents per share.

Market analysts had predicted $2.33 billion in revenue with earnings of 27 cents a share. Hence, Facebook beat market expectations by 11.50% in revenues and 14% in earning per share.

Some of the major highlights from the report (as per Q4 of 2013, which is October 31 to December 31, 2013)

  • Daily Active Users: 757 Million; where in US and Canada accounted for 147 million users and Asia accounted for 200 million users
  • Daily mobile active users: 556 million; previous quarter (Q3 2013), it was 507 million

Mobile DAU

  • Monthly active users: 1.2 billion
  • Monthly mobile active users: 945 million
  • Total revenues: $2.59 billion; previous quarter (Q3 2013), it was $2.06 billion

Mobile revenue

  • $1.25 billion revenues were generated by Mobile ads
  • 1.2 billion revenues came from US and Canada market; Asia accounted for $341 million
  • Average revenue per user (ARPU) is $6.03 for US and Canada; $0.95 for Asia; $2.61 for Europe

ARPU-FAcebook

  • $284 million was spent on marketing; $414 million was spent on Research & Development
  • $483 million was spent on capital investments in Q4 whereas $1.37 billion was spent all through the year
  • 172 million new users were added every month in 2013 and 139 million new activities increased every month (likes, comments, picture update etc)
  • 60% of users visited Facebook.com daily
  • In the month of December, Facebook users gave 6 billion likes every day
  • Number of users opting to use Messenger grew 70% in this quarter
  • 500 million users were active on Facebook Groups, every month in 2013
  • 35,000 users are surveyed by Facebook every day
  • $8 million revenues was generated in Facebook Ads on Black Friday alone
  • As of November, 2013, 25 million Small Business Owners had a company page on Facebook
  • Total ad impressions declined 8%
  • In Q4, Free Cash Flow was $748 million, and for the whole year, it was $2.8 billion
  • $419 million tax refund in Q2 contributed positively
  • Overall, Facebook has $11.4 billion cash at its bank accounts as of now
  • Major product launches: Messenger, Instagram Video, Graph Search

With healthy increase in Mobile Ad spend, Facebook is now looking at a positive start to 2014. But there are several challenges as well like decline in teenage users in US and Europe and issues pertaining to Privacy.

But overall, it was a great 2013 for Facebook!

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