Facebook Earnings Call Insights: Mobile Engagement, Ad Revenue

On Tuesday, Facebook Inc Class A (NASDAQ:FB) reported its third quarter earnings and discussed the following topics in its earnings conference call. Take a look.

Mobile Engagement

Justin Post – Bank of America Merrill Lynch: A couple of questions for you on Mobile. First, can you talk about total engagement as you look at individual users both on PC and mobile, are you seeing that engagement grow if you add up both in minutes or likes or other metrics? Can you talk about total engagement of your user base and how that’s trending? And then, thanks for the mobile disclosure, 14% of revenues; can you say – last quarter you gave us kind of how you’re ending the quarter, can you say if that – mobile was kind of accelerating as the quarter progressed? Thank you.

David Ebersman – CFO: Sure. I can take the first question. So, first of all, in terms of engagement on mobile and web, we continue to see that content created growth is growing across the world, and feedback, which we measure in terms of likes and comments, continues to grow well as well. So the engagement story on Facebook continues to be a strong one that we’re pleased about. In terms of the feed revenue, at the end of the second quarter we disclosed that at that point we were running at about $1 million a day and we used that metric because we just started ramping up towards the end of the quarter, so we felt like giving you the numbers for the whole quarter was not representative of where we were. Those numbers continued to ramp through the quarter. We ended the third quarter with more than $4 million a day coming from feed and about three quarters of that coming from mobile feed. But going forward I think we’ll stick to the metric of mobile as a percentage of revenue.

Ad Revenue

Gene Munster – Piper Jaffray: And maybe just following up on Johnson’s question. Can you talk – obviously you guys have been putting the pedal to the metal and I think Dave you just kind of gave some metrics around the impact of the overall experience. But first question is, is there anything that makes you believe that the acceleration in mobile is impacting the experience? And second can you talk about any sort of cannibalization from the desktop to mobile in terms of ad revenue?

Sheryl Sandberg – COO: We’re carefully monitoring user engagement and sentiment and we’re pleased with the results so far. We look at how users are engaging on our platform. And as we’ve increased the number of ads and News Feeds, we’ve been carefully monitoring that engagement. Our revenue is growing and that means as I discussed we have a lot of new clients. We also have a lot of clients and customers who are spending more with us. So we’re seeing increased revenue and increased budgets from them. Some of the revenue also is moving over from the right hand column to News Feed and that’s part of our strategy. We are putting more emphasis on the products that are running through News Feed, rolling out products because that’s where the natural ad format is for mobile.

A Closer Look: Facebook Earnings Cheat Sheet>>