5 things we learned from Facebook’s quarterly results

Facebook flower

If you’re not a numbers person, it’s pretty easy to skim over the quarterly financial results released by tech companies. After all, you might think, as long as said tech company keeps producing the product — or products — I love, why should I care what its operating margin was or, for that matter, what provisions it’s made for income tax.

Hidden in those numbers however are plenty of interesting insights into the companies reporting them. Take Facebook for instance. Its recently released Q4 and full year 2014 results show a company far more at ease with its ability to make money than it was a couple of years ago, but also one that’s doing everything it can to sustain the growth that’s brought it this far (a difficult task given that there aren’t all that many active internet users left who aren’t registered to the social network.

We’ve therefore pulled together some of the most interesting figures from the results and tried to unpack them as best we can.

1. If Facebook were a country, it would be the biggest on Earth

The social network now lays claim to some 1.39-billion monthly active users, 13% up on where it was at the same time last year. That puts it slightly ahead of the estimated China. That said, the disparity between the number of people who inhabit China on a daily and monthly basis isn’t likely to be as big as it is for Facebook. While its 890-million average daily active users for December 2014 (an increase of 18% year-over-year) is impressive, it would be worrying if Facebook was an actual country.

FB user numbers

2. Its ad tools are working, really working

As is the case with most social networks, Facebook depends on advertising for its survival. And after a few early struggles it seems to have found the magic formula. Perhaps the most remarkable example of that comes from the US and Canada, two of its most established markets. As TechCrunch reports, its user numbers in those two countries grew by a paltry 0.97%. The average ad revenue it earns from each of those users on the other hand grew 24% from US$6.64 to US$8.26. If everyone in the online space was able to achieve that kind of advertising growth, the demise so often predicted for print would have actually happened by now.

3. It’s a mobile force to be reckoned with

For most of its history, Facebook didn’t have the greatest have the greatest mobile offering. It was pretty much just an adapted version of the desktop experience. Things have seriously changed on that front. While some might question the great unbundling of its mobile apps, it does now have 750-million mobile daily active users. Even more significantly, 69% of the revenue it brought in during the fourth quarter of 2014 came in from mobile ad products.

That’s to say nothing of its ownership of WhatsApp and Instagram.

4. It’s done some serious hiring

Facebook’s staff numbers grew 45% last year. That’s pretty significant for a company that’s now more than a decade old.

5. Even good results can scare investors

Despite growing user numbers and strong revenues, investors were still jumpy after the social network released its results. According to Sasha Naryshkine from investment company Vestact, that’s because research and development costs have jumped sharply, as have marketing and sales costs.

Naryshkine argues however that this is as the result of short-term thinking. Facebook is “not concerned about building a business for the next quarter, [it is] building a business for the next decade and beyond”, he writes in the company’s daily newsletter.

Feature image: HTSABO/Mhkmarketing via Flickr (CC BY 2.0)

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