Facebook said its fourth quarter revenue rose 40 percent year-over-year to $1.59 billion. Mobile revenues grew to make up 23 percent of the company’s total and mobile monthly active users rose to 680 million, or up 57 percent year-over-year.
The company beat analysts estimates, but shares still tumbled by about 7 percent in after-hours trading to $29.09. Analysts had forecast that revenue rose 34 percent to $1.52 billion last quarter, according to the median estimate from a Bloomberg survey of analysts. They also forecast that Facebook’s fourth-quarter profit rose to 15 cents a share and that net income slumped to $45.8 million, according to the same survey.
In the same time a year ago, Facebook earned $302 million in net income on $1.131 billion in revenue. In the third quarter, Facebook posted $1.26 billion in revenue, with $1.09 billion coming from advertising and about $170 million from payments largely in games.
Facebook’s shares have risen 17 percent since the beginning of the year, on bets that the company’s aggressive push into mobile advertising is paying off. Mobile advertising made up 14 percent of the company’s revenue in the third quarter, but Facebook has since been much more forceful with putting sponsored stories into the mobile news feed and pushing app install ads. Ad platform Kenshoo told us earlier this month that it’s now seeing 20 percent of all Facebook ad spend going to mobile.
At the same time, the company has launched a host of new initiatives in the second half of 2012 that may finally start to show traction. In August, Facebook launched a form of search-based advertising called Sponsored Results in search type-ahead ads after two months of testing.
They also rolled out Gifts last year. You would expect to see this product post its strongest quarter around the holiday season, when friends and family are sending last-minute Christmas gifts. Facebook did a small push around this, with promotions across people’s news feed just days before Christmas. They’ve also re-oriented the way they deal with developers on the platform, focusing less on monthly and daily active usage and more on revenue per app install. That may not arrest a slowdown in payments and fees revenue, which came in at $176 million in the third quarter, up just $20 million from a year earlier as developers migrated to the quickly-growing and lucrative Android and iOS platforms.