Facebook Dazzled The Market, So What Next?

For investors and shareholders with huge exposure to S&P 500 and major tech stock indexes have been disheartened by Apple and Alphabets (Google) Q1 result, Facebook has given them something to be happy about.

Announcing the result, an upbeat Mark Zukerberg, Facebook’s CEO said “We had a great start to the year. We’re focused on our 10 year road map to give everyone in the world the power to share anything they want with anyone.” Although Mark did not go into the nitty-gritty of his ’10 year road map’, the result is a sign that Facebook’s profitability is assured in the next foreseeable future

So in case you are wondering why Mark is excited, here is the breakdown:

Facebook’s gross revenue from advertising, its major money spinner grew from 3.2 billion in Q1 2015 to 5.2 billion. This represent an impressive 57.5% percentage growth YoY.

While its income from ‘payments and other fees’ fell to USD 181 million compared to USD 226 million it declared in the same quarter last year, the company managed to declare a net income of 1.5 billion as opposed to USD 512 million it made in the same quarter last year. This is a growth of 195% YoY.

To establish the fact that Facebook has cemented its position as a mobile-focused company, mobile advertising revenue raked in about 82% of the total revenue This is 73% rise compared to last year.

The company is also not over spending on tech R&D and artificial intelligence, AI bets as its capital expenditure for the quarter is just USD 1.13 billion compared to its total cash and cash derivatives of about USD 20.62 billion.

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Facebook would however be taking more bets especially as it plans to move away from just being a B2C social networking platform selling user data to advertisers. The company’s investment in Chatbot for Messenger is aimed at diversifying its revenue beyond advertising.

While Facebook might still develop new advertising models for such products, it is likely it would be pressured to look beyond that and charge companies who are ready to substitute virtually all or some part of their call centres for ‘bot’ run customer engagement systems.

Featured image: Forbes

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