Facebook Has $2.5B in Q1 Revenue, a Billion Mobile Users

Facebook posted quarterly revenues of $2.5 billion during a transformative first three months of 2014, during which the company made a pair of acquisitions for $4.4 billion in cash and nearly a tenth of its overall equity. The company beat consensus revenue estimates of $2.3 billion.

Much of its revenue growth was driven by mobile advertising, which accounted for 59 percent of overall advertising revenue during the period. Facebook’s total revenues were up 72% over the first quarter of 2013, but softened slightly compared to the fourth quarter of 2013, when the company posted $2.59 billion in sales. During an April 23 conference call, chief financial officer David Ebersman noted that mobile revenues were up 7% sequentially compared to the fourth quarter, despite “seasonal benefits” reaped during 2013’s final three months.

The company said it had nearly 1.01 billion mobile users during the quarter, including 341 million mobile-only users. The company’s worldwide reach continues to grow; Facebook had 1.28 billion users worldwide, 84 percent of whom were outside the U.S. and Canada.

An April 20 Re/Code story indicated that Facebook is readying a new mobile advertising network, enabling it to sell ads shown in other companies’ apps, to boost revenues further. The company is reportedly preparing to reveal the network at its upcoming F8 developer conference on April 30.

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Ebersman warned that the company expects year-over-year advertising growth rates to slow down continually during 2014, compared with higher growth last year as Facebook rolled out its News Feed advertisements during 2013.

On February 19, Facebook acquired messaging application developer WhatsApp for $4 billion in cash and $12 billion in stock, plus another $3 billion in shares for employee retention. Then on March 25, it paid $400 million plus $1.6 billion in stock to buy Oculus VR, the designer of a head-mounted virtual-reality gaming device. Counting the vesting shares in the WhatsApp deal, Facebook exchanged between 9 and 10 percent of its outstanding shares to buy both companies.

The company also revealed that CFO Ebersman will step down from his position June 1. Ebersman, a former finance chief at biotech giant Genentech, joined Facebook in September 2009 and helped lead it through its May 2012 initial public offering. He will remain on board for a four-month transition period, and said he intends to return to the health care arena subsequently. Ebersman’s successor will be vice president of corporate finance and business planning David Wehner, a former CFO of Zynga who joined Facebook in November 2012.

Although Facebook shares dipped $1.67, or 2.65%, to $61.36 April 23 in advance of the after-the-bell earnings announcement, they recovered that value in after-hours trading, reaching $63.60 during the call’s question-and-answer session.

Facebook posted quarterly revenues of $2.5 billion during a transformative first three months of 2014, during which the company made a pair of acquisitions for $4.4 billion in cash and nearly a tenth of its overall equity. The company beat consensus revenue estimates of $2.3 billion.

Much of its revenue growth was driven by mobile advertising, which accounted for 59 percent of overall advertising revenue during the period. Facebook’s total revenues were up 72% over the first quarter of 2013, but softened slightly compared to the fourth quarter of 2013, when the company posted $2.59 billion in sales. During an April 23 conference call, chief financial officer David Ebersman noted that mobile revenues were up 7% sequentially compared to the fourth quarter, despite “seasonal benefits” reaped during 2013’s final three months.

The company said it had nearly 1.01 billion mobile users during the quarter, including 341 million mobile-only users. The company’s worldwide reach continues to grow; Facebook had 1.28 billion users worldwide, 84 percent of whom were outside the U.S. and Canada.

An April 20 Re/Code story indicated that Facebook is readying a new mobile advertising network, enabling it to sell ads shown in other companies’ apps, to boost revenues further. The company is reportedly preparing to reveal the network at its upcoming F8 developer conference on April 30.

Ebersman warned that the company expects year-over-year advertising growth rates to slow down continually during 2014, compared with higher growth last year as Facebook rolled out its News Feed advertisements during 2013.

On February 19, Facebook acquired messaging application developer WhatsApp for $4 billion in cash and $12 billion in stock, plus another $3 billion in shares for employee retention. Then on March 25, it paid $400 million plus $1.6 billion in stock to buy Oculus VR, the designer of a head-mounted virtual-reality gaming device. Counting the vesting shares in the WhatsApp deal, Facebook exchanged between 9 and 10 percent of its outstanding shares to buy both companies.

The company also revealed that CFO Ebersman will step down from his position June 1. Ebersman, a former finance chief at biotech giant Genentech, joined Facebook in September 2009 and helped lead it through its May 2012 initial public offering. He will remain on board for a four-month transition period, and said he intends to return to the health care arena subsequently. Ebersman’s successor will be vice president of corporate finance and business planning David Wehner, a former CFO of Zynga who joined Facebook in November 2012.

Although Facebook shares dipped $1.67, or 2.65%, to $61.36 April 23 in advance of the after-the-bell earnings announcement, they recovered that value in after-hours trading, reaching $63.60 during the call’s question-and-answer session.