The social media giant posted earnings of $1.09 per share on revenue of $7.01 billion. Analysts' were projecting earnings of 97 cents per share on revenue of $6.93 billion.
Despite the top and bottom line beat, Facebook offered cautionary guidance for 2017.
The company expects ad revenue growth rates to decline "meaningfully" and for 2017 to be an "aggressive" investment year, CFO David Wehner said on last night's conference call.
Recode managing editor Ed Lee tackled the issue of Facebook's advertising revenue growth during Thursday afternoon's "Power Lunch" on CNBC.
"The ad loads have topped off; they have showed you as many ads as you'll be able to bear in your newsfeed. What they need to do to boost growth is they need higher cost ads or higher rate ads. I think that's why they have been pushing video for the past year," he explained.
Video ads allow the company to charge more, and at a higher rate, Lee said. "That's the direction really any publisher is heading."
Currently, there is a maturing of the online advertising market, and a deceleration of traditional advertising channels like print, he noted.
"There's this weird gap now where the online ads aren't quite performing the way they want them to, but there is more money flowing in," Lee added, "It's just being split among so many different channels and platforms."