Facebook's earnings surge 52% based on strong mobile advertising performance

Facebook’s total revenues surged 52 per cent year-on-year in the last three months of 2015 to hit $5.8bn, as the world’s largest social network boosted earnings based on the back of its increased focus on mobile and video advertising opportunities, with its share price rallying in the immediate aftermath of its Q4 release.

The social network today (27 January) reported that total advertising revenue leaped 57 per cent year-on-year during the reporting period to hit $5.6bn, with revenues from “payments and other fees” totalling $204m, down from $257m 12 months beforehand.

Mobile advertising revenue represented approximately 80 per cent of advertising revenue for the fourth quarter of 2015, up from 69 per cent of advertising revenue in the fourth quarter of 2014, and 76 per cent in the previous quarter, according to Facebook.

Facebook's chief financial officer Dave Wehner said the work it has done to improve the quality and the relevance of the ads has enabled it it to increase the ad load - in other words show more of them - without harming the experience.

"Our focus really remains on the experience. So, we’ll continue to monitor engagement and sentiment very carefully," he added.

Th increase in ad revenue was commensurate with a 25 per cent year-on-year increase in Facebook’s mobile active users (MAU) during the final quarter of 2015, which averaged at 1.6 billion during December last year, according to its latest financial update, which also revealed that revenue for the full year was $17.9bn.

"2015 was a great year for Facebook. Our community continued to grow and our business is thriving," added Mark Zuckerberg, Facebook founder and chief executive, in a press release detailing the results. "We continue to invest in better serving our community, building our business, and connecting the world."

The past year also seen Facebook turn its attention Messenger, with headway made in extending the different types of content that people could share as well as improving how people can interact with businesses through it.

Updating analysts on its e-commerce experiement, Facebook claimed "everyone is really happy with that so far" and it has provided the basis for how it looks to make Messenger a business going forward.

"We’re happy with the initial results. There is obviously a lot more there that we need to do and we’ll have more to talk about this year and beyond," said Zuckerberg.

The Financial Times reports that Facebook's share price rallied seven per cent in the immediate aftermath of the announcement, as its performance in mobile advertising surpassed earlier analyst expectations.

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