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Facebook Surges After Big Q2 Earnings Beat, 12% User Growth

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Facebook Surges After Big Q2 Earnings Beat, 12% User Growth

Shares of Facebook, Inc. (NASDAQ: FB) traded higher by more than 8% after reporting second-quarter results.

Q2 Review: Facebook said it earned $1.80 per share in the second quarter on revenue of $18.69 billion. By comparison, Street analysts were expecting Facebook to earn $1.39 per share on revenue of $17.4 billion.

Advertising revenue, the bulk of sales, rose from $16.624 billion last year to $18.321 billion. "Other" revenue rose from $262 million to $366 million.

Net income rose from $2.616 billion last year to $5.178 billion, while operating margin improved from 27% to 32%.

Total costs and expenses were 4% higher year-over-year at $12.724 billion.

Operaetional Update: Facebook noted that daily active users (DAUs) averaged 1.79 billion in June, up 12% year over year. Monthly active users (MAUs) were up 12% to 2.7 billion over the same time period.

Cash and cash equivalents and marketable securities at the end of the quarter was $58.24 billion. Of particular note, the company paid approximately $5.8 billion on July 7 for its investment in Jio Platforms.

Headcount rose 32% year-over-year to 52,534.

Outlook: Facebook noted advertising revenue growth in the first three weeks of July were up 10%, roughly in line with what was seen in the second quarter. The company expects full quarter growth to be roughly similar to its July performance.

Total expenses for 2020 were narrowed from a previous range of $52 billion to $56 billion to $52 billion to $55 billion. Full-year capital expenditures were also narrowed from a prior range of $14 billion to $16 billion to around $16 billion.

"However, a great deal of uncertainty remains in our outlook, and our full year capital expenditures will depend on how the pandemic impacts our ability to construct data centers and refresh equipment," the company said.

The stock traded up 8.1% to $253.56 per sharer at the time of publication in the after-hours session.

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