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Facebook profit jumps as user ranks grow
[SAN FRANCISCO] Facebook on Wednesday reported a surge in profits in the past quarter, fuelled by strong growth in money-making ads to its more than two billion users.
Net profit in the second quarter leapt 71 per cent from a year ago to US$3.9 billion while revenue climbed 45 per cent to US$9.3 billion.
In after-hours trade, Facebook shares rose some two per cent to US$166.83 on the stronger-than-expected results.
"We had a good second quarter and first half of the year," said Facebook co-founder and chief executive Mark Zuckerberg.
"Our community is now two billion people and we're focusing on bringing the world closer together."
The number of people using Facebook at least once a month was 2.01 billion at the end of June, an increase of 17 per cent from the same time last year, according to the leading social network.
The vast majority of Facebook's revenue came from advertising, and 87 per cent of that was derived from ads served to people connecting with mobile devices.
"Given that Facebook growth remains healthy and robust, we believe any lingering concerns over user engagement and social competitors should dissipate," Baird Equity Research analyst Colin Sebastian said in a note to investors.
"Few companies share Facebook's combination of scale, strong technology orientation, and platform breath/diversity."
Jan Dawson, analyst at Jackdaw Research, pointed in a tweet to "continued remarkable growth in revenue at Facebook," saying it should ease concerns about a slowdown in momentum.
Facebook expenses, meanwhile, rose 33 per cent to US$4.9 billion as the Silicon Valley giant continued investing in its platform and new innovations.
Guessing at gadgets
Amid that growth, Facebook has been investing in new technologies as it diversifies with its "family" of applications that includes Messenger, WhatsApp and the virtual reality maker Oculus.
Recent reports suggest Facebook may be working on its own smart speaker to compete with Google Home and Amazon Echo in the budding market for home digital assistants.
Facebook could also be working on a smartphone, according to paperwork recently spotted by cyber sleuths which the tech giant filed earlier this year.
Facebook has a hardware team led by Regina Dugan, a former director of the Defense Advanced Research Projects Agency - Darpa - the US agency tasked with identifying and funding breakthrough technologies for national security.
Facebook is a major investor in artificial intelligence, and Mr Zuckerberg this week defended his position that these technologies would improve people's lives despite concerns by another tech sector leader, Elon Musk.
The latest earnings report showed Facebook boosted its cash holdings to some US$35.5 billion at the end of the second quarter, and increased the number of employees 43 per cent from a year ago to 20,658 as of June 30.