Facebook reported a massive 71% leap in second-quarter profits on Thursday as advertising revenues leapt thanks to strong growth in users of the social media website.
Shares in the company, founded in 2004 by Mark Zuckerberg, rose by as much as 4% in after hours trading following the results, announced after the US market close on Wednesday.
The Menlo Park, California-based company has developed capacity for growth in video and display advertising on its app for mobile devices as smartphone users have increased, while growth at its 2012 acquisition, Instagram also contributed.
Revenues rose 45% to $9.3bn (£7.1bn) in the second quarter, helping to drive a 71% jump in net profit to $3.9bn. Earnings per share of $1.32 beat Wall Street estimates of $1.13.
The gains were driven by strong growth in the number of Facebook users. At the end of June, Facebook recorded 2.01bn active monthly users – up by 17% from a year ago – two-thirds of which use the website every day.
And, although the number of Facebook employees rose 43% year-on-year to 20,600, the company said annual expenses would rise less than initially forecast.
Capital expenditure in the second quarter was $1.44bn, less than the $1.73bn expected.
Chairman and chief executive Zuckerberg said: "We had a good second quarter and first half of the year."
He added: “Our community is now two billion people and we're focusing on bringing the world closer together.”
Ken Odeluga, market analyst at City Index said: “Again, whilst all metrics keep moving in the right direction, not least the 17% rise in monthly active users to the milestone of 2 billion in June, it’s too early to expect much more than moderate consolidation in Facebook stock.”
Revenue growth at Facebook was twice that reported earlier in the week by internet advertising rival Google, which recorded sales growth of 19% in the same period.
Earlier this week Google’s parent Alphabet reported revenues of $26bn and a profit of $3.5bn, the latter of which would have been higher but for a $2.4bn fine issued by European Union competition authorities.
Shares in several of the internet giants Facebook, Amazon, Netflix and Google, collectively known as the FANG stocks, have hit record highs recently.
On Thursday, Facebook shares were 3.6% higher in pre-market trade and appeared to be heading for a strong open on Wall Street. The shares are up 30% so far this year.