Facebook Inc Posted a Strong Profit of More Than $1 Billion in Q4 2015
Facebook posted a strong profit in the fourth quarter of 2015. The social network giant on Wednesday reported to generte $1.56 billion in quarterly net income for the first time.
Market Watch reported that the strong performance showed Facebook's ability to quickly capitalize on its popularity. Following the announcement, Facebook shares jumped 4.3% to $98.35 in the after-hours trading.
As its revenue increased, Facebook's efficiency also got better. With a 52% increase of revenue, its cost only raised 21%. The company book a revenue of $5.84 billion in Q4 2015, a big jump from same period last year at $3.85 billion.
Regarding its good performance, CEO Mark Zuckerberg told analyst via conference call on Wednesday as reported by Top Tech, "I'm excited about our progress and the chance to build something great for the future."
This is the first time Facebook surpassed $5 billion quarterly revenue and $1 billion profit. Especially last year, the California-based company spent much money for investment in artifical intelligence and providing internet access to remote areas of the world.
As a member of Alliance for Affordable Internet (A4AI) Facebook showed a strong commitment to provide affordable Internet acces in remote area. Therefore, last year, the company involved in many projects aim to broaden Internet access to people in the under-developed countries, thus strengthening its potential users.
Facebook also expanded advertising revenue by allowing marketers to place ads on Instagram, the photo sharing apps. In North America, Facebook is able to capitalize more in its popularity, as analyst estimated that its advertising price in the region surged to about 20% in 2015.
CEO Mark Zuckerberg said, "2015 was a great year for Facebook." As CTV News reported, Zuckerberg further commented, "We continue to invest in better serving our community, building our business, and connecting the world."
Since its inception in 2004, Facebook has grown a huge company. In May 2012, Facebook Inc held its IPO after filing the request a month earlier. Its lead underwriters were Morgan Stanley, JP Morgan, and Goldman Sachs. At that year, Facebook also reached its one billion users.
The company was so successful, and was even recorded as the fastest company in S&P 500 Index to reach market capitalization of $250 billion. Facebook only took three years to reach that market caps.
Facebook generated most of its revenue from advertising. It also expanded into other to strengthen its position in social networking. In 2012, Facebook acquired Instagram photo sharing app. While in 2014, the company acquired WhatsApp, mobile instant messaging system and Oculus VR, maker of virtual reality device.
Its focused on core strengths and continuous effort to enhance them, has made the social network giant posted a strong profit in fourth quarter 2015. For the first time, Facebook is able to gain more than $1 billion net income in one quarter.