Facebook Inc reported a 55.8 percent rise in quarterly revenue, beating analysts' estimates, as its mobile-advertising sales soared. Mobile ad revenue accounted for 84 percent of Facebook's total advertising revenue of $6.82 billion in the third quarter ended September 30, compared with 78 percent a year earlier.
Analysts on average had expected total ad revenue of $6.71 billion, according to research firm FactSet StreetAccount.
Facebook, whose shares were up 1 percent at $128.35 in after-hours trading, said about 1.79 billion people were using its site monthly as of September 30, up 16 percent from a year earlier.
More than 90 percent of Facebook's users access the social network through mobile devices. Mobile daily average users rose 22 percent to 1.09 billion.
Total revenue rose to $7.01 billion from $4.50 billion, compared with the average estimate of $6.92 billion, according to Thomson Reuters I/B/E/S. "We're making progress putting video first across our apps and executing our 10 year technology roadmap," Chief Executive Officer Mark Zuckerberg said in a statement.
With the company's photo-sharing app Instagram and messaging apps WhatsApp and Facebook Messenger facing increasing competition from Snapchat, Facebook has been adding features to keep users hooked and attract advertisers. The company said in September that Instagram's advertising base had more than doubled to more than 500,000 in six months. Instagram had about 500 million users as of June. (http://bit.ly/2f1SJfP)
Facebook took its attempts to boost user engagement to the workplace last month, launching a subscription-based enterprise version of its mobile app.
The company also launched Marketplace, a feature that allows people to buy and sell items locally, and has been focusing more on video to better compete with Google's Youtube.
Facebook is expected to generate about $22 billion in mobile ad revenue in 2016, according to research firm eMarketer, up about 67 percent from 2015. Total ad revenue is forecast to rise to about $26 billion, an increase of about 52 percent.
However, there are questions about how long Facebook can continue to boost mobile ad revenue, given limits to the number of ads that Facebook can show each user.
Net income attributable to Facebook shareholders jumped to $2.37 billion, or 82 cents per share, in the quarter from $891 million, or 31 cents per share, in the third quarter of 2015.
Excluding items, the company earned $1.09 per share. Up to Wednesday's close of $127.17, Facebook's shares had risen 21.5 percent since the start of the year.