Facebook’s earnings report was better than expected. The company had revenues of $1.262 billion in Q3 2012. That’s a 32.285% increase from the same period last year. GAAP Net income was a loss of $59 million mainly due to share based compensation costs and related tax roll expenses. Otherwise the company posted solid operating margins. Wall Street expectations had been slightly lower.
During the earnings call Mark Zuckerberg highlighted some major breakthroughs. First, Facebook has more than a billion people using the site each month. Second, 600 million people are using mobile devices to share and connect. The last three months were crucial for Facebook in terms of its mobile strategy. Facebook made $153 million in sales from mobile advertisements, a revenue stream that didn’t exist seven months ago. Mobile revenue is 14% of advertising revenue in Q3.
Zuckerberg made mobile a strong priority for the company. And it showed. Facebook completed the rebuild of its app for iOS. It improved of the platform for mobile developers by launching new software development kits for iOS and Android as well as a deeper integrating into iOS 6.0.
Facebook had a positive Q3 2012. But the exciting results of its mobile ad business are not the answer to all questions either. Facebook is still playing catch-up. eMarketer estimated the size of mobile at revenue at $2.61 billion this year. $153 million mobile ad revenue is just a fraction to the total market opportunity. Investors will keep watching how aggressively Facebook is able to ramp up its mobile business.