Facebook posted a net profit of $896 million, a growth of 11% from the same quarter last year. Ad revenues on the social network jumped 45% year-on-year to $4.3 billion in the third quarter. As Facebook looks for more growth opportunities in developing markets, it’s focus is currently on India and here are some of the takeaways we got from its earnings and call with analysts:
1) India is leading in growth of daily active users (DAUs)
Answering an analyst question on user growth, Facebook chief financial officer, Dave Wehner said that the largest countries in terms of DAU growth were India, the United States and Brazil. “We’ve made a lot of initiatives to help improve and invest in the Facebook experience in emerging markets and that has helped drive some of the acceleration and growth. So we made a number of product and performance investments there with Facebook Light being a good example of that,” he added.
Facebook India’s DAUs were at 59 million in Q1, up from 55 million in Q4, out of which 53 million DAUs come through mobile (as opposed to 49 million DAUs in Q4), accounting for over 89.8% of Facebook’s daily traffic as of March 2015, the company informed Medianama.
Facebook’s DAUs at the end of the third quarter stood at 1.007 billion with 300 million coming from the Asia Pacific region. The number of DAUs on mobile stood at 894 million.
CEO Mark Zuckerberg mentioned that there are over 50 million people who use Facebook Lite.
2) Internet.org’s Free Basics has hit 15 million users worldwide
Facebook chief executive officer Mark Zuckerberg said that Free Basics, Internet.org’s zero-rating service, has hit 15 million users across 29 countries it is present in. In India, Facebook has partnered with Reliance Communications to provide Free Basics. Reliance Communications recently said that it has brought on board one million users on the platform.
Interestingly, Zuckerberg in his answer said that “there are already more than a million people who now have access to the internet who didn’t otherwise, because of our efforts.” But as we’ve mentioned, we’re not sure that the one million Zuckerberg claims are first time users of the Internet. Remember back in May, Facebook had said that Internet.org had 800,000 users in India and that only 20% of those were first time new users.
3) Ad revenues from PCs are down
Wehner mentioned in the call that ad revenues from personal computers were down approximately 8% as the company continues to advance revenues from mobile. Mobile ad revenue was $3.4 billion, up 73% from the same quarter last year, representing 78% of Facebook’s advertising revenue. Around 76% of Facebook’s ad revenues for the quarter ended June 30, 2015 was from mobile ads in the preceding quarter.
4) Video discovery strategy – push vs pull
An analyst on the call asked what Facebook’s strategy on video discovery will be and if the company will move to a pull-based model where users could search for videos. Zuckerberg answered that Facebook will be looking at giving all the videos of a page users have liked to increase video discovery. “A lot of I think what we need to do is give people a way to see all of the videos that page that they like or follow is interested in sharing on Facebook and that’s — there’s a pretty clear road map of stuff we’re going to do over the next couple years,” Zuckerberg said.
5) Oculus Rift and virtual reality content will take time
Facebook had said that it would be shipping its virtual reality headset Occuus Rift to consumers in the Q1 of 2016. Zuckerberg mentioned that the company has partnerships with Microsoft, Netflix, Twitch and other content partners. However, Zuckerberg added delivering content for Oculus Rift will take time and that it is part of the company’s long term plans.
“In terms of the actual content, first, we think gaming is going to be the most obvious market,” Zuckerberg said. “Once we start getting a bit further along with that, then the next thing that we think is going to be huge is video and immersive experiences, both things that people can create, like the social content that they share on Facebook today, and more professional and premium content, both short form and longer form,” he added.
– Facebook reported total Asia revenues of $709 million for the quarter, up 13.8 % from $623 million in the previous quarter. The region now represents 15.75% of Facebook’s total revenues which was at $4.5 billion for the quarter.
– Ad revenues jumped 45% year-on-year to $4.3 billion in the third quarter. Asia-Pacific ad revenues stood at $694 million, up 14.71% from the previous quarter. The region now represents 16.14% of the the total ad revenues.
– The company’s overall net profit was at $896 million for the quarter, up 11% y-o-y.