Beating estimates, Facebook raked in more than $10 billion in quarterly revenue for the first time.
Facebook’s total revenue jumped 47 per cent to $10.33 billion, for the quarter ended September 30. While its profits rose 79 per cent to $4.7 billion.
Ad revenue was up 49 per cent $10.14 billion up from $6.8 billion a year ago. Mobile ad revenue made up 88 per of the total or $8.9 billion.
That cash came from over 6 million active advertisers on Facebook and 2 million advertisers on Instagram. The vast majority of those are small and mid-sized businesses, Facebook’s COO Sheryl Sandberg said.
Ad revenue growth was strong globally, led by Europe and APAC with 56 per cent and 54 per cent growth respectively.
Facebook CFO David Wehner said the average price per ad increased 35 per cent during the quarter and the number of ad impressions served increased 10 per cent, driven primarily by Feed ads on Facebook and Instagram.
“Going forward, we also expect the growth in advertising revenue will increasingly be driven by price. This is a shift from prior years, when growth was primarily driven by increases in supply,” Wehner said.
The price increase was driven in part by auction dynamics: “as supply growth has slowed, then there’s more competition, and you’re seeing prices increase as demand continues to grow,” Wehner said.
He added, improved targeting that “optimises for real business results for advertisers” was improving Facebook’s yield.
Outside of advertising, Facebook’s payments and other fees revenue was $186 million, down 5 per cent.
Facebook’s average daily active users came to 1.37 billion in September up 16 year-on-year; monthly active users were 2.07 billion, also up 16 per cent. Instagram has 500 million daily active users.
‘Safety more important than profits’
Q3 2017 was Facebook’s biggest quarter for hiring to date. The social media giant added 2,500 people and ended the quarter with over 23,000 employees, up 47 per cent compared to last year.
And it’s planning on hiring more.
As well as investing in technology to identify malicious content, Facebook is doubling its safety and security team from 10,000 to 20,000 in the next year to better enforce its community standards and review ads. Not all of those people are fulltime Facebook employees, the current figure of 10,000 includes contractors.
During its earnings call and in a statement CEO Mark Zuckerberg lamented the fact “Russians tried to use our tools to sow mistrust.”
“Our community continues to grow and our business is doing well,” said Zuckerberg.
“But none of that matters if our services are used in ways that don’t bring people closer together. We’re serious about preventing abuse on our platforms. We’re investing so much in security that it will impact our profitability. Protecting our community is more important than maximising our profits.”
Facebook has spent the week testifying in front of Congress in the US about Russian use of its platform during the US election campaign.
The company has also announced it is improving transparency for ads, rolling out a tool that lets users see all of the ads a page is running and also an archive of ads political advisers have run in the past.