Judging by Facebook's (NASDAQ:FB) stellar performance post earnings announcement, its second-quarter results didn't disappoint last night. The company reported revenues of $1.81 billion, an increase of 53% year over year, translating to a non-GAAP net income increase of 65%, to $488 million, or $0.19 a share. The analyst consensus was hoping Facebook would earn $1.62 billion in revenue and bring home $0.12 a share in earnings.

For the month of June, the average number of daily active users increased by 27% year over year, to 699 million. The social network closed its quarter with 1.15 billion monthly active users, an increase of 21% year over year. Additionally, mobile monthly active users now represent 71% of all Facebook users and, as a percentage of advertising revenue, it accounted for 41%, a strong improvement from the first quarter when mobile only made up 30% of advertising revenue. In other words, Facebook is monetizing mobile in a more effective manner.

Healthy vitals
One of the more effective ways to measure the health of Facebook's business is to look at how its average revenue per user, or ARPU, is faring against monthly active user growth. By comparing these two metrics, you can get a better sense of what's driving Facebook's results -- user growth or improved monetization. Ultimately, when user growth begins to slow, user monetization will become the key driver of the business. Based on 1.15 billion monthly active users, every penny of ARPU generates $11.5 million in revenue to Facebook's top line.

On a year-over-year basis, user growth increased by 21%, but worldwide ARPU increased by 25%, to $1.60, indicating that Facebook is extracting value out of its existing users faster than it is growing its user base. This is a good sign of things to come, and shows that Facebook is figuring out how to more effectively monetize the world's largest social network.

Slow clap
Thanks to outsized growth in ARPU compared to user growth, investors should be pleased that Facebook's investments in earning the trust of marketers are beginning to pay off. Additionally, it appears that Facebook has begun to find its stride, easing fears that the company isn't just a social network, but also a viable business longer term. Throw in the many ways Facebook can improve its existing business, and it's likely that the company's earnings potential is still within the early stages.

Perhaps now is the time to buy?

Fool contributor Steve Heller has no position in any stocks mentioned. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.