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Facebook beats a bad quarter for tech, boasts 1.6bn users

It hasn’t been the best week for the world’s biggest tech players. But while almost everyone else has fallen short of market expectations, things could hardly be better for Facebook right now.

The world’s largest social network on Wednesday released its Q1 earnings report and, if you’re a shareholder, it makes for very good reading indeed.

Alongside continued user growth, the company revealed that it’s gotten even better at making money and that there may soon be a new class of share for people to invest in.

Making it rain

Facebook’s revenues for the quarter were US$5.38-billion, with its net income up 87% to US$2.2-billion. Importantly Facebook’s managed to grow its total revenue while expanding the percentage of that revenue which comes from mobile. This quarter 82% of Facebook’s revenue came from mobile, up from 73% in the same quarter a year ago.

That’s pretty remarkable for a company which many thought was struggling to find its way with mobile. It shows just how well the big blue social network has made the jump to “mobile first” and suggests that it could soon be as close as it’ll ever be to “mobile only”.

“We had a great start to the year,” said Mark Zuckerberg, Facebook founder and CEO. “We’re focused on our 10 year roadmap to give everyone in the world the power to share anything they want with anyone.”

Growing the base

That “great start to the year” wasn’t just confined to revenue growth either. Facebook’s user numbers saw double digit growth all-round, which is pretty significant for a company that’s on the cusp of adolescence.

Here’s the full breakdown, as per Facebook’s release:

  • Daily active users (DAUs) – DAUs were 1.09 billion on average for March 2016, an increase of 16% year-over-year.
  • Mobile DAUs – Mobile DAUs were 989 million on average for March 2016, an increase of 24% year-over-year.
  • Monthly active users (MAUs) – MAUs were 1.65 billion as of March 31, 2016, an increase of 15% year-over-year.
  • Mobile MAUs – Mobile MAUs were 1.51 billion as of March 31, 2016, an increase of 21% year-over-year.

And let’s not forget that those numbers are just for Facebook, the social network. When you include all its other properties, things get even more impressive:

Facebook Community Update

A new structure

Facebook also announced that it would be restructuring the way it issues its shares, allowing it to create a new class of non-voting capital stock, known as the Class C capital stock.

This kind of share class is typically aimed at investors likely to sell after a relatively short period, but who will hold the shares for at least a year.

According to Facebook, issuing this stock is designed to “create a capital structure that will, among other things, allow us to remain focused on Mr. Zuckerberg’s long-term vision for our company and encourage Mr. Zuckerberg to remain in an active leadership role at Facebook”.

In a note published on the Facebook Newsroom page, the hoodied one elaborates on that, saying that the proposed changes mean he’ll be able to “keep founder control of Facebook so we can continue to build for the long term”.

Zuckerberg clearly believes that his vision for Facebook is the right one. Earlier in the note, he writes about what Facebook has gained from being a founder-led company:

To maintain our focus on this mission, we have always been a founder-led company. This structure has helped us resist the short term pressures that often hurt companies. It has helped us grow our community, build our business and create shareholder value. It has given us the freedom to prioritize your product experience and invest in new apps like Instagram — decisions that don’t always pay off right away, but that we believe help us serve our community and our shareholders.

And if Facebook continues to produce results like it did this quarter, then the company’s investors are hardly likely to disagree.

But according to Zuckerberg, there’s a more prosaic for the restructuring: it will allow him and his wife Priscilla to stick to their commitment of giving away 99% of their Facebook shares during their lifetime without him losing control of the company.

“Priscilla and I will be able to give our money to fund important work sooner,” he writes. “Right now, there are amazing scientists, educators and doctors around the world doing incredible work. We want to help them make a bigger difference today, not 30 or 40 years down the road”.

Author | Stuart Thomas

Stuart Thomas
Stuart is the editor-in-chief of Engage Me Online. After pursuing an MA in South African literature, he spent five years reporting on the global technology scene. Intrigued by the intersection of technology and work, he joined Engage Me as the editor-in-chief. He is a passionate runner, and recently ran... More