Facebook Posts Q3 Revenues of $3.2bn

  • Wednesday, October 29th, 2014
  • Author: Tim Maytom
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Facebook HQ Logo IRLFacebook has warned shareholders of higher costs in 2015, a move which helped cause a nine per cent slump in its stock price yesterday, despite announcing Q3 revenues of $3.2bn.

The social media giants Q3 disclosure also included the first details of its $22bn (£13.6bn) acquisition of WhatsApp, showing that the OTT messaging service brought in only $15m in revenue during the first half of 2014, despite a 600m user base. Overall, WhatsApp had a net loss of $232.5m, but this was mostly made up of share-based compensation expenses and issuance of common stock below fair value.

The firm beat earnings projections, bringing in $3.2bn in revenue and $806m in profits. It also grew its total user count to 1.35bn, with mobile-only users up 14.2 per cent since last quarter to 456m, or roughly a third of Facebooks user base. Mobile daily users are up to 1.12bn, while mobile advertising revenue now makes up approximately 66 per cent of the companys total ad revenues, up from 49 per cent in Q3 2013.

During the investor call following the disclosure, CFO Dave Wehner said that Facebook is preparing for a spike in expenses between 55 and 75 per cent, as it invests more money in WhatsApp, Oculus and other areas that have yet to deliver a profit. This is a considerable shift in strategy from the company, which has previously worked hard to keep expenses growth low.

“Advertisers are intrigued by Facebooks latest initiatives, such as the relaunch of Atlas and the purchase of LiveRail,” said Debra Aho Williamson, principal analyst at eMarketer. “These moves are indicative of an important shift that is under way at Facebook. Its becoming much more ambitious in offering digital services far beyond what the company was initially created to do as a social network.”