Facebook, Inc.'s Q2 Earnings in 3 Must-See Charts

Like clockwork, Facebook beat expectations for the eighth quarter in a row. See the social network's monstrous performance in these three charts.

Jul 24, 2014 at 1:02PM

Facebook (NASDAQ:FB) stock soared to an all-time high at market opening today, and was trading just over $76 in late morning. The jump was fueled by the company's second-quarter financial report that beat expectations on both revenue and earnings.

The consensus analyst estimate was for earnings per share of $0.32 and revenue of $2.81 billion. Earnings and revenue instead came in meaningfully higher at $0.42 per share and $2.91 billion, respectively.

Zuckerberg Facebook

Facebook CEO Mark Zuckerberg (right) in his office. Image source: Facebook.

But investors will need to look deeper than the second-quarter EPS and revenue figures to see why the Street is so confident in the social network. It's more evident than ever that Facebook is a money-making machine. Check out these three charts to see the bigger picture of how Facebook is executing proficiently on the most important metrics that drive its business.

The rapid shift to mobile continues
Mobile is still the big story for the company. Mobile daily active users, or DAUs, accounted for 79% of Facebook's total DAUs in the second quarter. That percentage is up from 76% in the first quarter. Facebook's mobile-only monthly active users, or MAUs, hit 399 million, up from 341 million.

This shift has taken the percentage of Facebook's ad revenue from mobile to an all-time high.

Facebook Mobile Revenue Q

Data for chart retrieved from SEC filings.

What's most intriguing about this chart is that it was just over a year and a half ago that 0% of Facebook's advertising revenue came from mobile.

Revenue continues to grow robustly
Facebook's mobile ads are more engaging for users, so the shift toward mobile has driven demand for the company's ad units much higher. This is giving the social network increasing pricing power per ad unit, helping advertising revenue soar as Facebook's ad revenue shifts to mobile.

Facebook Ad Revenue Growth Rates Q

Data for chart retrieved from SEC filings.

Operating income growth is mind-boggling
When Facebook can increase the price per ad by 123% while ad impressions only decline by 25% from the year-ago quarter, this results in some serious scale. Thanks to Facebook's scalable business model and growing pricing power, the company is still growing operating income by triple digits.

Facebook Operating Income Growth Q

Data for chart retrieved from SEC filings.

While Facebook's continued performance at levels beyond expectations certainly provides more evidence that it has more growth ahead, and that its business may be more scalable than investors had imagined when shares went public at $38 per share, Mr. Market seems to already have taken this into consideration. On the other hand, is Mr. Market simply placing a well-deserved rosy premium on future growth prospects and a sustainable lucrative business model?

Is there any action investors should take? Given the enormously optimistic outlook priced into the stock, investors would likely be best only buying Facebook shares on a meaningful sell-off. On the other hand, the social network's business performance is another reason to hold for investors who already own shares. Should investors consider selling this winner? No way.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Daniel Sparks owns shares of Apple. The Motley Fool recommends Apple and Facebook. The Motley Fool owns shares of Apple and 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.

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