This Day On The Street
Continue to site right-arrow
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 - Get Report) 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 


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.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!
FB $83.30 0.35%
GOOG $548.34 -1.23%
AAPL $123.25 -0.80%
TSLA $185.00 -2.84%
YHOO $45.10 1.42%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

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