- By Sangara Narayanan
Facebook's second quarter 2017 earnings came in well above market expectations on the earnings as well as revenue front. The world's number one social media platform continued its astonishing streak of strong double digit revenue growth, ably helped by a 70 million increase in monthly active user base, while average revenue per user jumped sharply.
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Facebook reported earnings per share of $ 1.32 on the back of $9.32 billion in revenue, while the market was expecting earnings per share of $1.13 and revenue of $9.2 billion.
With both key metrics - user base as well as ARPU - growing during the quarter, Facebook had no problems in getting its revenue to grow by 47% to hit $9.321 billion, compared to $6.436 billion the company reported in the year ago period. Facebook only added 2 million users in North America and 6 million users in Europe during the quarter, as the bulk of user base growth - 62 million users - came from Rest of the World and Asia-Pacific.
With penetration levels already at a high point, user base growth has now moved into the steady growth phase in United States and Canada. At the end of second quarter, Facebook had 236 million users in North America, where the total population is just over 362 million. When you factor in the population of pre-teens and senior citizens, it's clear that with each passing quarter and every additional million makes it a little bit harder to get the next million.
But the story is exactly the opposite in the Rest of the World region and Asia-Pacific, where Facebook is adding users at a torrid growth speed. Facebook closed the second quarter with 654 million users in the Rest of the World market compared to 556 million users the company had in the second quarter of 2016, a growth of 17.6%. Monthly active users in Asia-pacific increased from 592 million to 756 million during the same period, a growth of 27.7%.
Both these regions are now more than compensating for the slow growth Facebook is experiencing in developed markets. The best part about Facebook's performance outside developed markets is that the company managed to keep its average revenue per user slowly improving in these regions.
Global average revenue per user increased from $3.82 in second quarter of 2016 to $4.73 during the second quarter of 2017, a growth of 23.82%. ARPU increased across all regions, and if this number continues to keep climbing in APAC and Rest of World, Facebook will continue its impressive record of double-digit growth for several more quarters.