Q1 net income was $1.51 billion, nearly triple that of the $512 million it profited in Q1 last year.
Facebook continued its winning ways April 27 when it cited a whopping 52 percent surge in revenue in its Q1 2016 earnings report to the U.S. Securities and Exchange Commission.The bottom-line numbers for the social network spoke for themselves: revenue of $5.38 billion, up 52 percent over $3.54 billion a year ago; and net income of $1.51 billion, nearly tripling the $512 million it profited last year.Shares of Facebook stock, which have risen 33 percent during the past year, spiked up 9.5 percent to $119.28 in after-hours trading on April 27.The results were stark in comparison to those of fellow Silicon Valley superstar companies, such as Apple, which reported its first quarterly drop in revenue in 13 years; Yahoo, which lost $99 million last quarter; Twitter, which missed first-quarter revenue expectations; and Google parent Alphabet Inc., which also missed analysts' projections. Facebook, which now has 1.65 billion monthly users, continues to ride the strength of its mobile-ad sales -- which it started selling in earnest in 2012 -- and the rising popularity of its video ads to the new profitability. The rapidly expanding development of its Messenger platform to connect users with businesses is also starting to get traction and is expected to be contributing to the bottom soon. Video ads are selling as advertisers channel funds from print and television budgets. Video ads on Facebook cost about $4 per 1,000 views during the first quarter, up from $3.44 in 2015 and higher than the $3.14 average across Facebook, according to marketing-technology company Kenshoo.The company said April 27 that is proposing to create a new class of nonvoting capital stock, known as the Class C capital stock. Facebook said the proposal is designed to create a capital structure that will, among other things, maintain 31-year-old CEO and co-founder Mark Zuckerberg's leadership role at the company for years to come.
If the Class C proposal is okayed by shareholders, the company said it would issue two shares of Class C capital stock as a one-time dividend for each share of Class A and Class B stock.Facebook's success wasn't just about the social network. In fact, analysts were extremely impressed with the company's other platforms. They were pleased to see that Facebook is starting to make money from its 410 million Instagram users and argue it could help the company generate an additional $4 billion to $5 billion in the next two years.WhatsApp and Facebook Messenger are also growing rapidly, which analysts say, will only contribute to the revenue the company generates.
- eWeek