After Facebook (NASDAQ:FB) reported first-quarter results just short of analyst expectations last Wednesday, the market's response was basically muted. Given Facebook stock's premium price tag, year-over-year revenue and EPS growth of 42% and 20%, respectively, isn't enough to get investors excited. Shares wrapped up the week about where they started. But despite the market's shrug, there was one area where the social network put up some notable figures: users -- the lifeline of Facebook's business.
The social platform's greatest asset, many Facebook bulls argue, is its large base of highly engaged users. This is why investors keep a close eye on the health of Facebook's user base. But how can investors measure the health of Facebook's user base? A good starting point is user growth and engagement.
Facebook's trend in user growth provides insight into the company's ability to attract and keep users.
Fortunately, Facebook's user growth is looking incredibly solid. In Q1, the social network's monthly active users, or MAUs, hit 1.44 billion, up 3.4% from the quarter before. This growth is actually an acceleration from Facebook's 3.2% growth between the third and fourth quarter of 2014.
Perhaps more important, Facebook's daily active users, or DAUs, also increased at a higher rate in Q1. Facebook's 936 million DAUs were up 5.2% from the prior quarter, a rate easily exceeding its 3% growth in DAUs between the third and fourth quarter of 2014.
User growth is also a strong point for Facebook outside its core social platform. Facebook mobile platforms WhatsApp, Messenger, and Instagram continue to see soaring user growth. User counts on these platforms have exceeded 800, 600, and 300 million MAUs, respectively.
Beyond user growth, another key element investors can use to assess the health of Facebook's user base is engagement. One way to gauge the engagement of Facebook's users is to simply divide DAUs by its MAUs. This metric shows the percentage of Facebook's users using the service on a daily basis.
In Q1, engagement on Facebook reached an all-time high of 65%, up from 64% in the quarter before.
During Facebook's first-quarter earnings call, management attributed continued growth in engagement to its rapidly growing mobile user base. A whopping 87% of Facebook's MAUs are now mobile MAUs, up from just 34% in the year-ago quarter.
For some perspective on just how strong engagement on mobile is, Facebook chief operating officer Sheryl Sandberg noted during the company's first-quarter call that "Facebook and Instagram get more than one out of every five minutes spent on mobile."
With revenue and earnings growing handsomely and Facebook's user growth and engagement as healthy as ever, the company continues to give shareholders reasons to hold this winner for the long haul.
Daniel Sparks 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.