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Facebook\u2019s hot streak continued with a strong Q2 2017 earnings report<\/a>. It earned $9.32 billion and $1.32 in GAAP actual EPS, compared to estimates of $9.2 billion revenue and $1.13 EPS.\u00a0Revenue growth was 44.7 percent year-over-year, compared to 59 percent in Q2 2016, indicating that revenue growth is slowing down in line with Facebook\u2019s warning to investors that it was running out of space to show ads in the News Feed.<\/p>\n For reference, here\u2019s how Facebook\u2019s revenue growth has declined as it reaches maximum ad load:<\/p>\n That revenue came from Facebook\u2019s 2.006 billion monthly users, which grew 3.4 percent from 1.94 billion users last quarter when its growth rate was 4.3 percent. Facebook now has 1.32 billion daily active users, up from 1.28 billion in Q1 and up 17 percent year-over-year. Facebook\u2019s share price closed at $165.61 before earnings were announced, and, after a short-lived fall, jumped 1.35 percent after earnings were announced to hover around $167.85\u00a0<\/span>in after-hours trading.<\/span><\/p>\n Facebook\u2019s profits reached $3.894 billion in Q2, up 71 percent year-over-year. That means Facebook made more profit than Google for the first time in history \u2014 though Google\u2019s Q2 profit only slumped to $3.524 billion because it was slapped with a $2.7 billion anti-trust fine<\/a> from the EU, which it will appeal.<\/p>\n Facebook had costs of $4.920 billion and a 47 percent operating margin, compared to Q1\u2019s $3.06 billion in profit and 41 percent operating margin. Headcount reached 20,658, up 43 percent year-over-year \u2014 a sign that Facebook is rapidly reinvesting in staff to fuel future growth. Capital expenditures reached $1.44 billion, while cash and equivalents on hand soared to $35.45 billion, with years of profits giving Facebook an ample war chest to acquire other companies.<\/p>\n Capital expenditures for the second quarter of 2017 were $1.44 billion. Cash and cash equivalents and marketable securities \u2014 cash and cash equivalents and marketable securities were $35.45 billion at the end of the second quarter of 2017. Headcount \u2014 headcount was 20,658 as of June 30, 2017, an increase of 43 percent.<\/p>\n Mobile now accounts for 87 percent of ad revenue, or $8 billion, compared to 85 percent last quarter and 84 percent a year ago.\u00a0Total ad revenue was $9.16 billion.<\/p>\n In Q2, Facebook began testing a free version of its Workplace enterprise collaboration suite. This could become a powerful funnel into the paid version of the software, which may evolve into a significant revenue source for Facebook. The company hit 5 million advertisers, and says 1 in 5 videos shared are Live.<\/p>\n Instagram continued its explosive growth, reaching 700 million users, 375 million users for its Direct messaging feature, and 250 million for its Snapchat Stories clone. Meanwhile, Messenger hit 1.2 billion<\/a> monthly users.<\/p>\n WhatsApp Status is growing fast by copying Snapchat Stories<\/p>\n During the earnings call, CEO Mark Zuckerberg discussed how he sees artificial intelligence changing Facebook\u2019s business. He believes AI will be able to replace some of Facebook\u2019s human content moderators, flagging offensive content before anyone sees it. AI could help Facebook find relevant content to show from people and Pages you don\u2019t follow. Ad targeting can also be optimized by AI in ways that would be impossible to do manually.<\/p>\n\n
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