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Facebook Hits 4 Billion Daily Video Views in Q1; Mobile Ad Revenue Grows 80%

Facebook on Wednesday posted revenue for the first quarter of 2015 that was slightly below Wall Street expectations, but the social giant is still seeing solid growth — especially on the mobile and video front.

On the video front, CEO Mark Zuckerberg said on the company’s earnings call that Facebook in Q1 served an average of 4 billion video views per day. The social giant averaged 3 billion daily video views at the end of 2014. In addition, Facebook rolled out an embedded video player to distribute videos outside the service, with more than 80,000 videos embedded on third-party websites to date. About 75% of video views occur on mobile devices, the company said.

Meanwhile, Hollywood has stepped up spending on Facebook: Q1 was the first quarter that entertainment and media was one of Facebook’s top four industry segments, said COO Sheryl Sandberg.

Sandberg called out Lionsgate’s “The Age of Adaline” campaign, in which the studio targeted video ads to young women on Instagram over the last few weeks. With the film opening Friday, Lionsgate is now running the ads on Facebook. “We expect more marketers to put mobile video at the heart of their campaigns in the future,” Sandberg said.

Asked on the call about Facebook’s plans to enable video publishers to generate revenue from their content, Sandberg said, “We’re basically focused primarily on video on our own site and service, and video tends to be pretty shortform content right now on Facebook because it’s playing in the news feed.”

For the first quarter, Facebook posted revenue of $3.54 billion, up 42% year-over-year (and up 49% excluding foreign-exchange rates). Net income was $512 million, down 20% from $642 million on higher spending; excluding certain items, Facebook said profits were up 28% vs. a year earlier, and earnings per share were 42 cents. Wall Street analysts expected the company to post revenue of $3.56 billion with earnings of 40 cents per share, according to Thomson Reuters.

Mobile ads accounted for 73% of Facebook’s advertising revenue during the quarter, or about $2.42 billion — up about 80% from the year-earlier quarter, when mobile comprised 59% of ad revenue, or about $1.34 billion. At the same time, Facebook usage on desktop computers has continued to decline, with revenue from ads served on PCs dropping 4% in the most recent quarter, according to CFO Dave Wehner.

“This was a strong start to the year. We continue to focus on serving our community and connecting the world,” Zuckerberg said in announcing the first-quarter results.

Facebook’s mobile user base again grew faster than its total users. Mobile daily active users were 798 million on average for March 2015, up 31% year-over-year, while mobile monthly active users were 1.25 billion as of March 31, 2015, rising 24%. Overall, Facebook had 1.44 billion global monthly active users at the end of the period, up 13% from Q1 2014.

Facebook’s expenses for Q1 totaled $2.6 billion, up 83%, an increase Wehner said was primarily driven by higher headcount-related costs, cost of revenue and marketing expenses. The company ended the quarter with 10,082 employees, up 48% from a year earlier.

Earlier Wednesday, Facebook launched a test of Hello, an Android app built by the company’s Messenger team that pulls up info from Facebook about incoming callers and lets users search for people or businesses on the social service and place calls. In addition, the company’s WhatsApp messaging service this week began rolling out voice-calling features for iOS devices.

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