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Facebook reports another mega quarter, crushing revenue

Facebook just had another outstanding quarter, surprising no one.

The social media giant’s Q2 earnings report beat expectations on both earnings and revenue, with earnings of 97 cents per share (analysts predicted 81 cents) and revenue of $6.44 billion (analysts predicted $6 billion).

It also added 60 million new users, bringing its total to 1.71 billion users, compared to analyst predictions of 1.69 billion. Its stock (FB), which is up 27% in the past year, popped 6% after hours on the earnings news.

Facebook has only missed earnings one time since it went public in 2012.

“Our community and business had another good quarter,” said Facebook CEO Mark Zuckerberg. “We’re particularly pleased with our progress in video as we move towards a world where video is at the heart of all our services.”

Indeed, the story with Facebook right now is all about advertising, and mobile video ads in particular. Facebook’s overall ad revenue rose 63% from a year ago, to $6.24 billion. Mobile advertising rose to account for a whopping 84% of all ad revenue in the quarter, up from 76% in Q2 2015. The rise in mobile ad revenue means Facebook makes more money off you than ever before: an average $3.82 per year from each user worldwide, a much-higher average $14.34 per year from US users.

Facebook average revenue per user

Many analysts were focused on two questions about Facebook leading up to the report: Instagram and mobile app-install ad revenues.

Deutsche Bank analyst Ross Sandler has expressed concern that the success of Snapchat is cutting into Instagram engagement. The photo app recently hit 500 million monthly active users.

Facebook does not yet break out Instagram’s revenue, but last quarter COO Sheryl Sandberg revealed that Instagram now has 200,000 different advertisers, to Facebook’s 3 million.

It also does not disclose revenue from app-install ads (ads that appear on mobile only, and direct users to download an app) but Citi Research has pointed out that with Apple and Google introducing their own mobile ad tools recently, this category of ad sales may become more important for Facebook.

A recent eMarketer report predicted that Facebook will account for more than two thirds of all of global social media ad revenue this year, a staggering figure. It helps that Facebook’s mobile daily active users have risen steadily every single quarter.

Facebook daily active users on mobile

Then there’s everything that Facebook is trying in messaging, from WhatsApp to Messenger to chat bots. “I’m happy,” Zuckerberg said on the investor call, “with the updates we’re making to WhatsApp, which has a community of more than 1 billion people. The scale we’ve achieved with our messaging services makes it clear they are more than just a way to chat with friends.”

Indeed, Facebook has recently bet big on bots inside of its Messenger app, an effort to make ordering goods and services a more human process. Messenger, like WhatsApp, recently topped 1 billion users.

Facebook Messenger is in fact the No. 2 most popular iOS app of all time… behind only Facebook.

Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology. Follow him on Twitter at @readDanwrite.

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