Facebook's impressive financial results reflect the central role social media sites play both in our lives and in our economy.
Facebook is continuing to grow at an impressive rate and is set to reach 2 billion users this year. The company announced its fourth quarter 2016 and full-year earnings on Wednesday and, as usual, it smashed expectations.
In its most recent quarter, Facebook’s total revenue spiked by 51 percent year-over-year to hit $8.81 billion — the great majority of which ($8.6 billion) came from advertising. Facebook’s quarterly profit hit $3.57 billion, up 128 percent from the $1.56 billion it posted a year earlier.
Further breaking down its ad revenue, Facebook continues to capitalize on what COO Sheryl Sandberg described as a shift to mobile. Overall, mobile advertising revenue represented 84 percent of ad revenue in the fourth quarter, up from 80 percent in the fourth quarter of 2015.
Just as impressive are Facebook’s increasing user numbers. With each passing month, the social network is inching ever closer to its next milestone of 2 billion users. As of December 31 2016, the platform’s monthly active users were 1.86 billion users, a quarterly addition of 72 million users. Just 2 million of those new users cam from the United States and Canada, however, with Asia-Pacific (its biggest region overall) accumulating an extra 43 million users.
Facebook’s 231 million U.S. and Canada users are by far the biggest contributors to its overall revenue. In the fourth quarter, its overall revenue in these regions increased by almost $1 billion to reach $4.6 billion. Additionally, Facebook’s average revenue per user in U.S. and Canada climbed to $20 in the quarter, which is significantly higher than its other global territories.
Elsewhere, Facebook’s daily active users were 1.2 billion in December 2016, a year-over-year increase of 18 percent. Out of those, the majority of users (1.1 billion) are visiting Facebook via mobile, up 23 percent from the fourth quarter of 2015. The same goes for its monthly stats, with mobile users spiking by 21 percent to reach 1.74 billion.
In its earnings call, Facebook repeated its statement from its previous quarter that ad revenue growth rates will come down this year. It also added that it plans to increase investment in research and development, original video content, and employment.