The last quarter saw strong results nearly across the board in the social media sector. Even Snapchat, neither public nor two years old, was able to latch on to the positive momentum, with rumors circulating that its latest investment round would be led by the Chinese e-commerce giant Alibaba at a $10 billion valuation. For the likes of Facebook and Twitter, though, it’s not enough to show a healthy top line. In fact in most cases, the market is looking more closely at the number of users. While profits were relatively slim, and sometimes going in the wrong direction, this quarter’s performance hints that social media is ready to deliver on both counts.
This quarter marked the ninth time in a row that Facebook beat analyst estimates, as the Menlo Park-based company raked in $2.9 billion in revenue and $791 million in net income. Like its industry counterparts, Facebook highlighted its ability to increasingly capitalize on its growing mobile user base. The company announced that 1.07 billion of its 1.31 billion global users now use the service’s mobile applications, up 31% from the previous year. Mobile advertising revenue in fact exceeded the growth in mobile users, as it accounted for 62% of total ad sales, up from 41% last year. With the high profile acquisitions of WhatsApp and Oculus, and the introduction of standalone apps like Messenger and Slingshot (a Snapchat competitor), Facebook is setting itself up in the coming months to mine revenues from more than just its primary application.
Twitter blew analyst estimates out of the water in its Q2 earnings, posting revenues of $312 million and adjusted earnings per share of $0.24, representing 124% growth from this time last year. The uptick in revenue was fueled by 24% growth in monthly active users, with the site now claiming 271 million users logging on and interacting with the platform every month. Of that number, 211 million, or 78% of users access the service through mobile devices, while mobile ad revenue was responsible for 81% of the company’s total revenue from advertising. Like Facebook, Twitter is investing heavily in efforts to capitalize on these mobile users, launching mobile app promotions in early June and acquiring TapCommerce, a leader in mobile ad retargeting, later in the month. The hope is that these investments, when combined with the continued uptick in users and revenue, will ensure Twitter’s sustained profitability. This quarter, the company reported a non-adjusted net loss of $145 million.
— TwitterIR (@TwitterIR) July 29, 2014
LinkedIn posted a strong Q2 as well, reporting $534 million in revenue at $0.51 per share to beat analyst estimates of $511 million and $0.38 EPS. While revenue was up nearly 47% from the previous year, the company did report a loss, of $1.0 million in net income, where this time last year it generated $3.7 million. The company likewise reported significant growth in members, eclipsing the 300 million mark in April and reaching 313 million by the time it released its earnings, to bring YoY growth to 32%. “LinkedIn delivered strong financial results in the second quarter while maintaining investment in our member and customer offerings,” explained CEO Jeff Weiner. Among these investments were a redesigned mobile application, released in late July, and the $175 million acquisition of Bizo, a B2B marketing platform.
On July 30th Yelp reported a quarterly profit for the first time since going public in 2012. Yelp counts 138 million monthly active users who have combined to contribute over 61 million reviews of local businesses, ranging from diners to cardiologists, to its online portal. The company’s revenues grew 61% YoY to $88.8 million, while net income of $2.7 million represented $0.04 per share. “We delivered great results this quarter,” said Yelp founder and CEO Jeremy Stoppelman in the company’s press release, “[and] we still have a large opportunity ahead of us.” Like its bigger counterparts, mobile was a point of emphasis for Yelp. It touted its 68 million unique smartphone users, who contribute 40 percent of the service’s reviews, and recapped the accommodations it has made to facilitate mobile usability. These included extending Yelp’s internal system for private messaging from desktops to mobile, and introducing Yelp Reservations, a new feature on its mobile application that leveraged the company’s 2013 acquisition of SeatMe.
Over the last year and a half Zynga, the social gaming service behind the FarmVille and Words with Friends franchises, has struggled to mount its ascent back to the $1.3 billion in revenue it posted in 2012. The Q2 financials announced today, unfortunately, won’t do much to help. The company reported bookings of $175 million, missing analyst estimates of $191 million and signalling a 34 % YoY decline. A net loss of $62.5 million, compared to $15.8 million last year, was similarly disappointing. The financial problems can be tied at least in part back to the company’s monthly active user base, which declined 30% YoY to 130 million. In readjusting guidance to an expected range of $695 million to $725 million in annual bookings, down from a projected $770-$810 million, the company acknowledged the uphill battle it faces under under new CEO Don Mattrick, who took over from founder Mark Pincus last summer.