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Facebook beats Wall Street revenue expectations thanks to mobile, but falls short on profits

fb q1 stockFacebook announced its Q1 2013 earnings today, and like last quarter, mobile remains a highlight and a focus for the social networking platform. 

Facebook, despite its shaky footing with Wall Street and the so-so introduction of its mobile initiative, Facebook Home, may have outdone analyst expectations with its financial performance.

Revenue, compared to the same quarter of last year, grew 38 percent to $1.46 billion in Q1 2013, and its Daily Active Users (DAUs) in March 2013 grew 26 percent year-over-year to 665 million users. Monthly Active Users (MAU) saw similar growth with a boost to 1.11 billion users. With mobile paraded by CEO Mark Zuckerberg as Facebook’s saving grace, mobile MAUs grew 54 percent year-over-year to 751 million as of March 31, 2013.

If there are any worries about Facebook bleeding users, as The Guardian attempted to point out, it’s at least not hurting from it yet.

Revenue from advertising amounted to $1.25 billion, which is approximately 85 percent of Facebook’s total revenue. With new ad products like Facebook Exchange ads surfacing inside of user’s News Feeds, and mobile app ad installs, Facebook’s ad revenue growth year-over-year (43 percent) is nothing to balk at. And to circle back to how Facebook is performing on mobile, 30 percent of its ad revenue – approximately $375 million and up from 23 percent in Q4 2012 – was generated from mobile ads alone.

The highlight of the quarter are mobile app install ads, and to put its successes so far into perspective, Facebook COO Sheryl Sandberg said that 3,800 developers garnered 25 million downloads from these ads. Apparently Facebook Exchange is meeting Facebook’s expectations so far. Sandberg added that AdRoll “reallocated” 63 percent of its total impressions to Facebook.

Engagement on Facebook, despite the fact that you’d think users are fed up with Facebook’s constant changes and new ad products, received an accolade as well. If you look closely at the MAUs and DAUs data, it’s not hard to see that more people are spending more time on Facebook compared to last year – which is likely why Facebook’s ad revenue has been fairing well so far.

In fact during the call, Zuckerberg made the point that while the quality of social ads is what Facebook is focusing on, the company’s aim is to make it so that “everywhere someone is consuming content (on Facebook), the business model goes along with it.” In other words, Facebook says its data doesn’t indicate that users are fed up with ads.

Although Facebook just barely beat Wall Street expectations this quarter – analysts predicted Facebook would rake in $1.44 billion – the social network fell short on profits. Analysts figured the adjusted earnings per share to be $0.13 cents, while the actual earnings per share at $0.12 hasn’t really budged since Q1 2012.

At the time of this writing, Facebook shares are trading at $27.43 per share after hours, down from today’s opening price of $27.85.