Facebook Crushes Earnings Forecasts Thanks To Mobile Ads, User Base Swells To Nearly 2 Billion

It was a pretty big deal when Facebook amassed 1 billion active monthly users a little over four years ago. Of the achievement, company co-founder Mark Zuckerberg said it was "humbling and by the far the thing I am most proud of in my life." Now just a few short years later, Facebook is on the cusp of doubling the number of people who connect with others through the world's largest social playground, the company revealed in an earnings report.

Facebook capped off 2016 with 1.86 billion monthly active users, an increase of 17 percent year-over-year. Most of the people using Facebook are now connecting through mobile devices. By Facebook's tally, on average there were 1.15 billion mobile users signing into its service and being active on a daily basis, a figure that's up 23 percent year-over-year, and 1.74 billion over the course of the month, up 21 percent year-over-year. To put all these figures in perspective, the world's population is estimated at around 7.5 billion people.

Mark Zuckerberg
Image Source: Flickr (Brian Solis)

"Our mission to connect the world is more important now than ever," Zuckerberg said in a statement. "Our business did well in 2016, but we have a lot of work ahead to help bring people together."

The shift to mobile was also evident in Facebook's earnings. Mobile advertising revenue accounted for around 84 percent of Facebook's total ad revenue for the fourth quarter of 2016, which is up from 80 percent a year prior. In total, Facebook raked in $8.6 billion in ad dollars in Q4 2016, up from $5.6 billion in the same quarter a year prior, and another $180 million in "payments and other fees" to bring its overall revenue to $8.8 billion, a 51 percent jump from a year prior.

For the full year Facebook pulled in $27.6 billion in revenue, an increase of 57 percent compared to 2015. The company's full year profit came to $10.2 billion, up a whopping 177 percent from $3.7 billion a year prior.

This goes to show the power of advertising. Facebook is free to use, as nearly 2 billion do, and all those eyeballs are worth a lot of money to advertisers. Looking ahead, Facebook plans to invest heavily in 2017 and ramp up its hiring. It will also be interesting to see what develops from Oculus in terms of VR.