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Facebook Doubles Mobile Ad Revenue, but Costs Also Rise

Facebook is really just a mobile ad company.

Asa Mathat

Facebook’s mobile ads are taking off. The company’s mobile ad business doubled over the same period a year ago, adding to the social network’s growing dominance in mobile advertising.

This growth represented Facebook’s first quarter with more than $2 billion in mobile ad revenue. That jump beat most analyst estimates, which hovered between 85 percent and 100 percent growth for Q4 over the same period in 2013.

“We’re entering 2015 with what we think is the best mobile ad product on the market,” Facebook CFO Dave Wehner said in an interview with Re/code. “Mobile continues to be the strongest driver of our growth.”

Facebook also posted its highest revenue quarter ever Wednesday, beating Wall Street estimates once again in what has become a routine occurrence for Mark Zuckerberg and Co.

Facebook reported profit of 54 cents per share on $3.85 billion in revenue for the three months ending in December. The Street expected 48 cents on $3.77 billion in sales.

But costs also surged in the quarter, jumping 50 percent to $1.63 billion, as Facebook looks to grow its business.

Facebook had impressive user growth considering the network’s already massive size. It now claims 1.39 billion active users, up 13 percent over the same quarter last year, which still represents a slowdown over the same period last year when it’s monthly active user based jumped 16 percent.

RBC analyst Mark Mahaney estimated overall user growth of 13 percent year over year, or roughly 1.38 billion users.

The overall slowdown in growth means Facebook has to get more ad value from each user; it has already started to do that with more video content since video ads net higher dollars.

Here are the slides:


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