This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

What Made Facebook’s Earnings So Good

Shares of Facebook (FB) have rallied the past several days following last week's solid earnings report. Facebook is now up about 9% for the month of July, while Google's  (GOOG) has gained only 1.4%. Here are three charts to explain Facebook's progress in the second quarter.

Facebook mobile use 

The rise in mobile use continued as Facebook's earnings per monthly active users keep increasing, as indicated 

below.

Source of Data: Facebook's website

In the past quarter, the company's daily active users grew 3% from the previous quarter and 4% from a year earlier, resulting in the level of engagement remaining at 62.9%. 

Facebook's revenue per user grew along with increased engagemen by mobile users. The engagement in mobile rose from 57.3% a year ago to 61.1% in the recent quarter. Moreover, the number of mobile only MAUs spiked by 82% from a year ago. This means the share of users, who only use Facebook on its mobile platform, has grown substantially. The chart below demonstrates the rise in mobile only MAUs from total MAUs and the progress in mobile engagement.


Source of Data: Facebook's website

Asia leads the way in growth

In terms of revenue divided by geography, Asia continues to lead the way with a 75% growth in revenue and a 26% jump in daily active users or DAUs, year over year.

Source of Data: Facebook's website

As a result, Facebook's average revenue per user or ARPU rose to $1.08 and Asia's share out of total DAUs increased to 27.5% in the second quarter. Despite these encouraging figures, Asia still lags behind North America and Europe in terms of ARPU: Asia's ARPU is only 17% of Canada and U.S's ARPU, and this ratio hasn't changed in the past year. Thus, even though Asia is an important region for Facebook in expanding its operations, it still doesn't seem to close the gap with North America and Europe in terms of ARPU.

Facebook continues to find ways to increase its revenue and keep the level of engagement among its users high. The shift to mobile has yet to slowdown its growth in sales and thus makes Facebook a model for other ads orientated companies that there is a way to monetize mobile.

At the time of publication, the author held no positions in any of the stocks mentioned.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs