Business

Facebook’s second quarter revenue soars 61%

Facebook Chief Executive Mark Zuckerberg has officially silenced the skeptics.

For all those wondering if the Harvard dropout could keep his winning streak alive, the social network Wednesday beat Wall Street’s expectations for a fifth straight quarter and saw its shares hit new highs.

Mobile advertising drove a 61 percent increase in revenue in the second quarter. Analysts predicted revenue of $2.8 billion, 55 percent higher than a year ago.

Facebook said that mobile advertising accounted for 62 percent of total sales, up from 41 percent a year ago, as users migrate to mobile devices from desktop computers.

“This is a good quarter for us,” Zuckerberg said in a call with analysts Wednesday, sounding almost blasé.

The results show how far the company has come since its rocky public debut just two years ago. Investors hammered the shares for months after the IPO because of concerns about its almost non-existent mobile revenue.

After the release of second-quarter results, the stock jumped by more than 5 percent in after-hours trading, to $75 a share — a new 52 week high.

The stock was already up 26 percent this year as Facebook has shown that it’s ready to compete with the likes of Google for digital ad dominance.

Facebook’s share of the mobile ad business is growing so fast that it’s on track to claim 22.3 percent of worldwide mobile advertising spending this year, according to research firm eMarketer.

By comparison, Google, the current king of digital ad spending, is expected to see its share of the mobile ad market remain relatively flat at around 50 percent, according to eMarketer.

Facebook is looking to expand revenue beyond advertising with direct payments after introducing a “buy” button on its site earlier this month.

In the latest quarter, Facebook also grew its monthly active users — an important metric of organic growth — by 14 percent, to 1.32 billion. Mobile MAUs, or the number of users accessing the site through mobile devices, grew 31 percent over the last year, to 1.07 billion

Facebook reported net income of $791 million, or 30 cents a share, up from $333 million, or 13 cents, a year earlier.

Profits, excluding certain items, came in at 42 cents a share, which also blew past analysts expectations for 32 cents a share.

While Zuckerberg has quashed concerns about his mobile business, he has also raised questions about his costly diversification plan.

The 30-year-old CEO raised eyebrows when he agreed to buy Whatsapp, a startup messaging app, for $19 billion earlier this year.

He also agreed to pay $2 billion for Oculus VR, a company that makes virtual reality glasses and is still testing the product.