Facebook (FB) Earnings Depict Monster Growth With More To Come

Facebook Earnings Leave Nothing to be Desired

There's no two ways about it... Facebook (FB) is a money-making monster, and is well-positioned to remain a monster indefinitely (as far as that term can be used with the technology sector). The social networking company posted results this week that simply blew away estimates, and left its year-ago numbers in the dust. Yet, there's more of the same kind of growth in the cards.

Last quarter, Facebook posted a profit of 79 cents per share, topping estimates of 68 cents, and trouncing the year-ago bottom line of 54 cents per share. As for the top line, revenue of $5.84 billion handily beat analyst estimates for sales of $5.37 billion, and the Q4-2014 revenue tally of $3.85 billion is comically out of sight in the rear-view mirror. Those numbers translate into earnings growth of 46% and sales growth of 51%.

What's been obscured by the sheer scope of the good news is that quality wasn't displaced by quantity. That is to say, Facebook didn't ramp up its revenue just by scaling up by ultimately accepting thinner margins. It continued to offer advertisers a superior -- and improving -- advertising platform. The numbers verify it.  For example...

While the total user base grew 3% on a sequential basis to 1.59 million monthly active users (giving the company more ad inventory to work with), it simultaneously increased rather than decreased the price per ad placement. The end result is a nice 33% year-over-year increase in the amount of revenue it was able to extract from each user... the best ARPU improvement Facebook has seen in over a year, not to mention the beginning of a new uptrend on that front.

The difference-maker, was of course, mobile.

Though Facebook got a slow start with its mobile advertising endeavors, it more than caught up in the meantime. An incredible 80% of last quarter's revenue was driven by mobile devices like smartphones and tablets, defying the idea that mobile is tough to monetize due to the small screen.

And yes, the recently-implemented monetization effort of Instagram has to at least get some of that credit.

Yes, there will come a time when Facebook can no longer add new users. There's also an absolute cap (somewhere) on the price it can charge for an insertion of video ads, which have been wildly lucrative since the company turned up the heat on them. But, with Facebook Messenger, Facebook Audience Network, Oculus and WhatsApp still largely un-optimized as a means of driving revenue, the company plausibly has enough tools to work with to drive plenty of growth for plenty of years.