Facebook grows revenue more than 30 percent in Q3, but also posts loss

The company took a number of steps to improve its mobile products during the quarter

Facebook, under extreme pressure to cheer up its disappointed investors, posted revenue growth of more than 30 percent in its third quarter on Tuesday, and beat Wall Street expectations, but also recorded a loss.

Facebook's revenue rose 32 percent to US$1.26 billion, compared with $954 million in the third quarter of 2011, and exceeding the $1.23 billion consensus expectation of financial analysts polled by Thomson Reuters.

Net loss was $59 million, or a loss of $0.02 per share, compared with net income of $227 million, or earnings per share of $0.10.

On a pro forma basis, which excludes certain items like stock-based compensation, Facebook had net income of $311 million, or earnings per share of $0.12, beating by a penny the analysts' consensus expectation.

It remains to be seen how Wall Street will react to the results. In its second quarter, Facebook reported similar results -- revenue growth of more than 30 percent and a net loss -- and its stock got hammered. Wall Street's main worry has been that the company's revenue growth has slowed down, compared with its pre-IPO years, but Facebook maintains that it has many opportunities to accelerate its sales engine.

In Tuesday's statement, Facebook focused on making a case for broad and varied improvements to its mobile services, a key growth area for the company.

"As proud as I am that a billion people use Facebook each month, I'm also really happy that over 600 million people now share and connect on Facebook every month using mobile devices," CEO Mark Zuckerberg said in the statement, adding that mobile users are more engaged than others.

"At the same time, we are deeply integrating monetization into our product teams in order to build a stronger, more valuable company," Zuckerberg said.

Facebook went public on May 18, but the stock so far has been a disappointment. Facebook's stock closed at $19.50 on Tuesday on the Nasdaq exchange. That's about half of its IPO price of $38, when the company was valued at around $100 billion.

Critics have said Facebook needs to provide a better mobile experience for its users and advertisers, and Zuckerberg admitted in a public appearance in September that the company's mobile strategy focused too much on HTML5 instead of on native applications.

In the third quarter, the company took a number of steps to improve on mobile, including a revamping of its iOS application, and the release of new software development kits for iOS and Android developers. It also closed its acquisition of the extremely popular mobile photo-sharing app Instagram.

Monthly active users were 1.01 billion as of Sept. 30, up 26 percent year over year, while daily active users were 584 million on average in September, up 28 percent. Mobile active users were 604 million as of Sept. 30, up 61 percent.

During the third quarter, the company also made an e-commerce move with the launch of its Gifts service, which is designed to make it easier for users to choose, pay for and send gifts to friends.

The company also launched several new ad products, and generated 14 percent of its ad revenue from mobile.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business issuesFacebookfinancial results

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Juan Carlos Perez

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?