Facebook shares have hit record levels in after-hours trading after the company reported strong financial results for the second quarter, driven mainly by mobile advertising.
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The social networking giant reported revenue of $9.32bn, up 45% on the equivalent period a year ago, and profits of $3.89bn, an increase of 71%.
The firm’s share price closed up 0.2%, but rose by 4.5% in after-hours trading to $173, with revenues above analysts’ expectations of $9.2bn, the BBC reported.
Advertising accounted for 98% of the revenue, and about 87% of that ($7.97bn) came from mobile advertising, up from about 84% in the second quarter of 2016.
Mobile advertising has been a key indicator for investors in terms of Facebook’s successful transition to mobile and its ability to sustain growth.
Although the company has indicated it plans to stop increasing the frequency of ads in the News Feed to avoid annoying users, it plans to introduce ads to Messenger and increase ads in Instagram.
Facebook is also experimenting with ads in videos and classified ads in its Marketplace trading feature, according to The Guardian.
For the quarter, Facebook reported 1.32 billion daily active users, an increase of 17% on the equivalent period a year ago, and 2.01 billion monthly active users, also up 17%.
WhatsApp has reportedly grown to 1.3 billion monthly users, with a billion daily users, while WhatsApp Status, a version of Snapchat Stories that launched six months ago, has more than 250 million daily users, compared with Snapchat’s 166 million daily active users.
Facebook is expected to generate $36.29bn in worldwide digital ad revenue in 2017, up 35% year on year, according to research firm eMarketer.
“We had a good second quarter and first half of the year,” said Facebook founder and CEO Mark Zuckerberg. “Our community is now two billion people and we are focusing on bringing the world closer together.”
At Black Hat USA 2017 in Las Vegas, it emerged that Facebook is to contribute $500,000 in initial funding to a bipartisan initiative to defend US elections from cyber attack.
The Defending Digital Democracy (DDD) project, announced by the Belfer Center for Science and International Affairs at Harvard Kennedy School, aims to identify and recommend strategies, tools and technology to protect democratic processes and systems from cyber and information attacks.
In a keynote presentation at Black Hat, Facebook chief security officer Alex Stamos said the company hopes that additional participants will turn it into a freestanding information-sharing centre controlled by its members, reports Reuters.
“Right now we are the founding sponsor, but we are in discussions with other tech organisations,” said Stamos. “The goal for our money specifically is to help build a standalone ISAO [information sharing and analysis organisation] that pulls in all the different groups that have some kind of vulnerability.”
Stamos urged Black Hat attendees to be more open-minded about helping law enforcement track criminals and terrorists, warning that unthinking rejection of official requests could lead to legislation forcing companies to break their own encryption.
The DDD project will be co-led by the former campaign managers for Hillary Clinton and Mitt Romney and experts from the national security and technology communities, including Facebook and Google.
The project will be run by Eric Rosenbach, co-director of the Belfer Center and former chief of staff to secretary of defence Ash Carter.
Rosenbach recruited Robby Mook, Hillary Clinton’s 2016 campaign manager, and Matt Rhoades, Mitt Romney’s 2012 campaign manager, to join DDD as fellows and co-leaders.
“Americans across the political spectrum agree that political contests should be decided by the power of ideas, not the skill of foreign hackers,” said Rosenbach.