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 PC World newsletter!

Error: Please check your email address.

Tags business issuesfinancial resultsFacebook

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

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

Cool Tech

Crucial Ballistix Elite 32GB Kit (4 x 8GB) DDR4-3000 UDIMM

Learn more >

Gadgets & Things

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Family Friendly

Lexar® JumpDrive® S57 USB 3.0 flash drive 

Learn more >

Stocking Stuffer

Plox Star Wars Death Star Levitating Bluetooth Speaker

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest News Articles


GGG Evaluation Team

Kathy Cassidy


First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni


For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell


The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi


The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott


My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?