Facebook posts record quarterly results and reports $1.5bn profit for 2013

Facebook has reported a record set of quarterly results, comfortably beating analysts’ expectations as mobile advertising revenues soared.

The social network co-founded by Mark Zuckerberg, which turns 10 next week, announced it brought in revenues of $2.59bn for the three months ending 31 December, up 63% from the same time last year. Earnings per share were 31 cents. For all of 2013, Facebook had revenues of $7.87bn, an increase of 55% year-over-year. The company made a profit of $1.5bn for the year.

"It was a great end to the year for Facebook," said Zuckerberg, Facebook’s CEO. "We're looking forward to our next decade and to helping connect the rest of the world." Zuckerberg noted Facebook’s anniversary next week. “It’s been an amazing journey so far but what’s ahead is even more exciting,” he said.

The results came a week after a controversial Princeton University study claimed the social network would "die like a virus" and lose 80% of its users by 2015, wiped out almost as quickly as it spread. Facebook called the conclusion “crazy” in a blogpost. It also came a day after disappointing results from Yahoo, the internet giant that has been losing ad revenue to Facebook for years.

Facebook’s shares have soared more than 90% since the middle of last year. The company went public in May 2012 in the biggest internet initial public offering (IPO) in history. But the sale was marred by technical glitches and worries that the company was losing advertising dollars as its customers moved to mobile. It took the company a year to recover from the IPO slump but it now appears to have convinced investors it has a mobile future. The company’s shares rose over 7% in after-hours trading.

The company said it had 1.23 billion monthly active users, a 16% increase year-over-year but up just 3.4% compared with the third quarter, a sign that growth may be slowing. Monthly active mobile users totalled 945 million as of 31 December, an increase of 39% year-over-year and 8.1% higher than the third quarter. Revenue from advertising was $2.34bn, a 76% increase from the same quarter last year, and mobile advertising revenue represented approximately 53% of the total, up from approximately 23% in the fourth quarter of 2012.

Sheryl Sandberg, Facebook’s chief operating officer, said: “Every day people are spending more time with their mobile devices and marketers are increasingly trying to reach them.” She said Black Friday - start of the US Christmas shopping season - had been a big driver for mobile ad revenues in the quarter.

Facebook accounted for 5.7% of all global digital ad revenues last year, up from 4.11% in 2012, according to eMarketer. Google, by comparison, accounted for 32.4% of all digital ad spending worldwide in 2013, up from 31.5% in 2012. Globally the digital ad market grew 13% to $117.6bn in 2013, according to eMarketer, up from $104bn in 2012.