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Facebook Q2 Earnings Beat Expectations With $1.81B In Revenue, Up 53%, Mobile Hits 41% Of Ad Revenue
Today Facebook reported its second-quarter financial performance, including revenue of $1.81 billion. Analysts had expected Facebook to earn $0.14 per share on a top line of $1.62 billion. The company’s revenue figure released today is an all time quarterly high for the firm.
Facebook’s second-quarter revenue is up 53 percent on a year-over-year basis. Analysts had expected a 37 percent increase. In the quarter, Facebook had a net income of $333 million. In its most recent sequential quarter, the first of 2013, Facebook’s revenue totaled $1.46 billion, and it earned $0.12 per share.
Mobile income as a percentage of ad revenue totaled 41 percent, up 11 percent from the preceding quarter, when it totaled 30 percent. In the final quarter of 2012, mobile ad income was but 24 percent of the total advertising top line. Facebook has proven that it can monetize its growing mobile usage in a big way. Investors will be satiated in that concern.
Frankly, in my view the 41% figure is quite impressive, and unexpectedly strong. However, we should not take as indicative that all desktop Internet giants will be able to monetize at similar levels in mobile settings. Facebook data on its users is nearly without compare, and likely provides it with a key competitive advantage in how it can deliver targeted ads to users on the go.
The majority of Facebook’s revenue comes from advertising-related income. However, its payments and fee revenue totaled $214 million during the quarter, up 11 percent on a year-over-year basis.
On the usage front, Facebook demonstrated strong growth, with its daily active user tally rising 27 percent on a yearly basis to 699 million. Monthly active users now total 1.15 billion for Facebook, up 21 percent when compared to the second quarter of 2012. Finally, mobile monthly active users were up 51 percent compared to 2012, to 819 million. For more on Facebook’s usage metrics, TechCrunch’s Josh Constine has the fully skinny.
Facebook’s capital expenses were down in the quarter, but it continues to suffer from margin pressure. In the second quarter, Facebook’s operating margin was 31 percent.
Facebook ended the quarter with $10.3 billion in cash and short-term investments, leaving it very well capitalized. In regular trading Facebook was up around 1 percent. In after-hours trading, Facebook is massively up.
Top Image Credit: Emmanuel Huybrechts
Facebook's Q2: Monthly Users Up 21% YOY To 1.15B, Dailies Up 27% To 699M, Mobile Monthlies Up 51% To 819M
In Q2 of 2013, Facebook grew to 1.15 billion monthly active users up from 1.11 billion at the end of Q1, 669 million daily active users from 665 million, and to 819 million mobile monthly active users from 751M. These totals don’t tell the whole story, though, as much of Facebook’s growth is coming from Asia and developing markets where it doesn’t earn as much money per user.
Mobile daily active users hit 469 million on average for June 2013. Facebook’s mobile-only user count grew from 189 in Q1 to 219 million at the end of June.
As for the dollars brought in by the social network, Facebook hit $1.81B in revenue, up 53%, and mobile hit 41% of ad revenue. You can see Facebook’s full financial earnings numbers here.
Other highlights from Facebook’s growth include that Instagram saw 5 million video uploads in the first 24 hours after the feature’s release. Facebook for Every Phone recently surpassed 100 million monthly active users just two years after the rich, feature phone version of Facebook launched. Facebook’s acquisition Parse announced last month that 100,000 apps have been built on its mobile backend-as-a-service, up from 60,000 when Facebook bought it.
Breaking down its user growth by geography, we see that Facebook grew 2.15% from 139 million in Q1 to 142 million daily active users (DAU) in Q2 the United States and Canada, and 1.53% from 195 million to 198 million monthly active users (MAU). Europe grew even slower, up just 1.67% in DAU, and 1.11% in MAU.
But in Asia and the rest of the world, Facebook is still adding users at a quick pace. In the ”rest of world”, Facebook expanded DAUs 8.33% this quarter from 180 million to 195 million, and MAUs 5.81% from 327 million to 346 million. And in its strongest growth market this quarter, Asia saw an 8.38% DAU increase from 167 million to 181 million, and a 6.26% MAU increase from 319 million to 339 million.
It’s important to understand that aggregate growth numbers don’t necessarily explain what’s happening to Facebook’s business. Much of Facebook’s growth right now is coming from developing markets where it doesn’t earn as high of an average revenue per user (ARPU). Worldwide Facebook earned $1.60 per user, but only $0.63 per user in the “rest of world” geography which is propping up its growth.
Unfortunately, Facebook still isn’t breaking out its mobile user growth by geography. This allows it to obscure whether its mobile growth is predominantly coming from the developing world.
Live From The 500 Startups Accelerator's Sixth Demo Day
The sixth group of startups from the 500 Startup Accelerator program will be making their debut today in Mountain View, Calif. — and then going on to do demo days in San Francisco and New York City as well. Can’t make it yourself, or can’t wait until 500 Startups comes to your town? You can check out the live stream above, which will be going for the next few hours.
While we’ve gotten some idea of what these startups do, today is their time to shine, as they pitch their products and services to investors at the Demo Day. We’ll be live from the scene, writing up the most interesting companies we see here. In the meantime, tune in to the stream yourself if you want to see what they’ve been up to.
And here are the startups:
Mayvenn
This startup is seeking to boost the amount of money that can be made by African American hair stylists by helping them to take advantage of the incredibly lucrative hair extension business. That demographic spends $6 billion on hair extensions, outspending every other demo by 3-1. Mayvenn gives every stylist their own e-commerce-enabled website and connects them with supplies that otherwise would be sold at a beauty supply store, helping stylists to make more money.
POPAPP
POPAPP is the “quickest, easiest way to prototype your mobile app,” enabling users to convert a pen and paper sketch of an idea into an interactive prototype. Since POPAPP launched in November, they say they’ve had per 70,000 users. The company makes money on a subscription basis, offering two free trials and then monthly fees for individuals and businesses.
Sverve
The company is an influencer marketplace to “make online word of mouth marketing viable.” The secret sauce is a deep database of influencers and a platform to match businesses and PR firms with them. Also tools to pay influencers and track campaigns. The influencers have cumulative reach of a billion page views, and has more than 350 businesses and PR firms using the platform already.
Floqq
Floqq aims to change online education in Latin America. You can watch instructional videos on any skill from cooking to finance. “None of them no shit about how to sell in Latin America, because we are different!” one of the founders exclaimed about Floqq’s online video competitors, explaining that Floqq uses different payment methods by country based on residents preferences.
BOXC
This startup wants to help online retailers in China to sell directly to U.S. customers. There are 2 million Chinese sellers in the market, selling to more than 100 million U.S. consumers, but shipping is typically slow and returns are close to impossible. That means that even at low prices, sellers aren’t making very much money. BOXC helps speed up shipping to 3-5 days without having to keep inventory in the U.S.
Koemei
Koemei makes educational videos searchable and collaborative. The company uses its technology to convert learning videos into text and makes them searchable. Students can have access to the automatically generated text of lectures after classes, and can take notes, share thoughts with classmates, link videos together, and organize their content in one place. Koemei has three major contracts, including from the City University of New York, and so far has six figure revenues.
AppSocially
The company helps app developers acquire customers through peer referrals, which work best for mobile app conversion. You can use the product with just one line of code, optimize code through A/B testing and increase clickthrough rates. It operates on a freemium model, with free metrics and customers only paying when they take action and use A/B testing or other premium features.
TR Data
TR Data is “Bloomberg for emerging markets.” The company has over 100 companies using them already to make informed trading decisions, as it claims poor coverage of data in emerging markets is costing companies billions in trades.
Credii
Credii is trying to help businesses make smart decisions about the products and services they use. It asks them a series of smart questions about what they need and makes instant recommendations of products and services that fit thsoe needs. It can help them pick and customize products, saving them money. It makes money through premium support to customers and highly qualified leads for vendors.
Tamatem
This company is based on the idea that less than one percent of online content in app stores is accessible to Arabic users, even though Arabic is the 4th largest language in the world. Tamatem takes popular game app in the U.S. market and converts them into Arabic equivalents that its audience can understand. In one month, Tamatem’s first game saw 650,000 downloads.
Flyer
Flyer is disrupting the way commercial real estate is marketed. It lets brokers drag and drop information into the browser right on their website to build a flyer. Once that’s done they can export to print and pdf, and push everything to social media with one click. It also brings analytics to the market.
Walmart Labs Scoops Up Site Speed Optimizer, Torbit, To Help It Keep Pace With Amazon
Josh Fraser and Jon Fox founded Torbit in 2010 after becoming fed up with the amount of time they and other engineers dedicated to the tedious process of managing website performance optimization — by hand. In 2012, the Sunnyvale-based startup launched its first solution, called Insight, in an effort to make the tools they’d spent years developing internally available to the public — without requiring a degree in computer science or 15 developers to understand them.
By allowing any online business to track that critical correlation between the time it takes for a website to load and their core business metrics, Insight attracted the attention of both enterprise players as well as startups like Wayfair, Storenvy, and the Cheezburger Network. By February of this year, Torbit was processing over six billion performance metrics a day for its customers.
With each second a website takes to load potentially resulting in the loss of critical business — something to which big eCommerce properties, like Walmart, are increasingly susceptible. Rather than building these tools themselves, Walmart Labs today announced that it is buying Torbit’s help.
While the terms of the deal were not disclosed, in its announcement today, Torbit startup announced that it will be joining Walmart Labs as part of the eCommerce giant’s move to bring some speed and performance optimization to Walmart’s online properties. Specifically, Fox says, Walmart will look to leverage Torbit’s dynamic content optimization technology to enhance the performance and shopping experience for Walmart customers — behind the larger, and perhaps more pressing goal, of helping it keep pace with Amazon.
Following the acquisition, Torbit will continue to keep its site running for 30 days, but will be shutting down for good on August 23rd. The company will be offering an export process to its customers to prevent them from losing their critical performance data, which readers can find here.
In an effort to meet the expectations of an increasingly digitally savvy consumer, Walmart Labs has been on a mission to develop new commerce solutions to stay ahead of encroaching competitors (and chase e-Tail leaders like the ubiquitous Amazon), while enhancing the shopping experience of its millions of shoppers. To do that, the company has been following the Yahoo playbook of late, making a handful of acquisitions to bring startup talent in-house.
Today’s addition of Torbit to its startup roster follows Walmart Labs’ recent acquisitions of companies like Inkiru, OneOps and Tasty Labs, which are all part of an effort to help its parent company become an actual technology company (and not just another e-Tailer) and beef up Walmart.com. Buying Inkiru, for example, gave the company access to a mobile-centric point-of-sale solution, while last year’s acquisition of Grabble provided a critical Big Data component, allowing it to improve fraud detection and prevention and in-store recommendations.
With these acquisitions, Walmart.com is now able to tap into and offer key features, like improved semantic search, Facebook integration and better mobile support — which are essential as the company adapts to its increasingly digital user base.
With the acquisition of Torbit’s front-end optimizer, Walmart said that it will be able to add much-needed device and platform-agnostic performance optimization tools and minimize customer attrition thanks to slow loading digital storefronts.
The startup’s technology, Walmart Labs’ Jeremy King said in a blog post today, can “dynamically minimize and compress the files the browser downloads to best fit the browser’s characteristics … and by rewriting the page to best exploit the performance behavior of the Web browser requesting the page, Site Optimization can help each browser fetch and render each page as efficiently as possible.”
With a growing share of its revenues emanating from its eCommerce portals, this kind of image loading is critical to allowing shoppers to find what they need in realtime, without the traditional invective directed at their browser.
With the acquisition, Walmart said today that four of Torbit’s engineers will be joining its team, including co-founder Jon Fox.
Torbit’s announcement copied below:
Today we’re excited to announce that Torbit has been acquired by @WalmartLabs. We’ll be joining the team and bringing our Insight / Atlas technology to the Walmart online properties. In addition, we’ll be using our cutting edge Dynamic Content Optimization technology to enhance the performance and shopping experience for all of Walmart.com’s many online shoppers. We’re exited to help make the Walmart online experience even better by optimizing for your device and improving the performance of all of their existing and future sites.
Torbit has been a wild ride and we’ve been truly blessed to work with many great customers. We couldn’t have built any of our performance products without all of your feedback, testing, and patience. I am truly grateful to have worked with all of you. As part of this acquisition, we’ll continue to keep everything running for 30 days, until Friday, August 23, 2013, after which time we’ll have to wind down. We do offer an export process so you can keep all of your performance data. You can see an estimate of your export size here and if you’re interested in exporting your data please email us at support@torbit.com with a list of sites you’d like to export and we’ll send you instructions from there.
There has been a long list of great people who have helped Torbit along the way and I want to thank each and every one of you. From our investors, advisors, and employees to our customers, beta testers, and friends – we couldn’t have done it without you!
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