Based on soaring expectations heading into Facebook's (NASDAQ:FB) much-anticipated Q4 and 2014 annual earnings, CEO Mark Zuckerberg and team could have easily dropped the ball. After all, when analysts and investors are expecting nothing but a home run, a "mere" triple would have disappointed.

While expenses were expected to cut into net earnings to some extent based on earlier comments from Facebook's CFO, exploding revenues would more than make up for increasing costs. On a non-GAAP basis excluding one-time costs, analysts forecasted a huge jump in earnings per share compared with 2013's Q4 on a nearly 50% jump in revenues. Continued growth in mobile ad revenues is also key, particularly after Q3's impressive results in which mobile ads accounted for nearly two-thirds of Facebook's total revenues.

Just the facts
Turns out that the over-the-top optimism from Facebook analysts and investors was warranted. In fact, Facebook blew the doors off the year-ago quarter and estimates, setting the stage for what should be another impressive year for shareholders. Non-GAAP earnings for 2014's Q4 jumped to $0.54 a share from last year's "paltry" $0.31 and exceeded estimates of $0.49. And Facebook's earnings-per-share improvements compared with 2013 came despite another 450 million shares outstanding, give or take.

Facebook's total revenues also impressed, coming in at $3.85 billion, a nearly 50% improvement from 2013 and ahead of the $3.77 billion industry pundits expected for the quarter. As for questions surrounding mobile ad sales? Facebook answered those questions emphatically in Q4, announcing that just shy of 70% of its ad revenues were via mobile devices, up from last year's 53%.

Even as Facebook continues to impress with strong mobile revenues, that burgeoning market is largely to blame for the recent angst surrounding its biggest digital ad competitor, Google (NASDAQ:GOOG) (NASDAQ:GOOGL). A primary concern as Google prepares to announce its own earnings is its declining cost-per-click rates, resulting from consumers' shift to mobile. Last quarter's 4% drop continued Google's ongoing struggles to maintain ad rates on mobile devices. After Facebook's blowout quarter, Google had better start looking over its shoulder, if it's not already.

While monthly average users is generally recognized as an industry standard, and Facebook now has 1.39 billion of them, from a user engagement perspective, the daily-active-users metric, or DAU, provides a more accurate measure of activity. Once again, Facebook didn't disappoint. In its third quarter, Facebook boasted 703 million DAUs. In Q4? That number jumped to 745 million.

On the other hand ...
To no one's surprise, the aforementioned expected higher expenses ate into operating margins. Expenses in Facebook's Q4 were $2.72 billion, up a whopping 87% compared with the year-ago quarter. As a result, operating margins declined from last year's 44% to 29%. Again, not surprising considering the costs associated with the continued integration of last year's multiple acquisitions -- WhatsApp-related costs in particular were cited during Facebook's earnings call.

Costs associated with ramping up what will soon become new revenue opportunities, including Facebook's inclusion of video ads and continued infrastructure investments -- particularly tools to measure ad effectiveness rates -- also added to the cost of doing business.

Despite the many positives and the exceeding of investors' high expectations, Facebook stock is taking a beating in after-hours trading, so what gives? For short-term investors, Facebook's guidance for the balance of 2015 is to blame for the knee-jerk, after-hours trading reaction. Continued increases in expenses -- to the tune of 55% to 70% higher than 2014 -- and tepid revenue growth relative to what industry pundits have come to expect are largely to blame. But mid- and long-term investors should make no mistake: Facebook knocked it out of the park, and it's positioned well for the future.