Impressive Results for Facebook Despite Scandal

First-quarter total revenue of nearly $12 billion was up 49% year over year. Facebook’s ad revenue rose 50% over last year to $11.8 billion, driven by 13% year-over-year growth in monthly average users, accompanied by a 31% increase in average revenue per user, or ARPU. Regarding the bottom line, Facebook reported second-quarter operating margin of 45.5%, up over 400 basis points year over year, due to revenue growth outpacing the increase in operating expenses. Facebook now expects year-over-year operating expense growth between 50% and 60%, which is in line with our prior projection and higher than our estimate of 37% revenue growth. This increase in expenses is mainly due to growth of the firm’s continuing investments in ensuring quality content and protecting user data, in addition to acquisition of more video content.

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