Facebook’s business posted a slightly stronger quarter than Wall Street expected as its mobile advertising business continues to grow. The company reported its third-quarter earnings today.
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Facebook slightly beat analyst expectations as its mobile advertising business continues to chug along, bringing in $3.2 billion in revenue and exceeding Wall Street's expectations for people checking the app every day.
When the company first went public in 2012, Facebook's mobile advertising business didn't exist. Today, the company's mobile advertising revenue consists of %66 of its advertising revenue. Facebook also reported adjusted earnings of 43 cents per share.
That's about in line with what Wall Street was looking for, with analysts expecting Facebook to earn 40 cents per share on $3.12 billion in revenue, with mobile advertising revenue consisting of 66% of the company's total advertising revenue.
Its total user base was also about in line with what Wall Street expected. The company said its user base grew to 1.35 billion monthly active users, while 864 of those users were checking the company's applications every day. Wall Street was expecting 1.35 billion monthly active users and 851 million daily active users.
In addition to launching the Facebook Audience Network and its mobile app install advertising product, which has quickly grown to what analysts have predicted to be a $1 billion annual business, the company recently re-launched its advertising platform called Atlas. That expands the company's advertising footprint to applications off of Facebook, and opens a new user set that potential advertisers can tap into Facebook's data to better target and make money off their ads.
Facebook is expected to increase its share of the worldwide digital ad market from 5.8% in 2013 to 8% this year of the expected $140.7 billion in digital advertising revenue, according to eMarketer. By comparison, Twitter is expected to hold a 0.8% share of digital advertising, up from 0.5% in 2013, according to eMarketer.
"We believe the digital advertising industry is growing faster than previously expected and Facebook continues to gain share," Sterne Agee analyst Arvind Bhatia wrote in an analyst note to investors.
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Part of the trick for the company has been figuring out how to not only grow its user base, but also figure out how to correctly rank and target its mobile ads. As BuzzFeed News previously detailed, the company has around 13 million to 14 million active advertisements on any given day, and the company works to whittle those ads down to the 10 or so that the company shows to its users on a daily basis.
Thanks to the growth of its mobile advertising products, the company has continued to beat analyst expectations and its stock has continued to blow past its all-time high. That's driven the company's valuation past $200 billion and beyond historically iconic American companies like Coca-Cola and IBM.
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