Facebook is hoping that making mobile a priority will help shake off the post-IPO doldrums.
Despite revenues that edged ahead of analyst estimates, the company's stock plunged by more than 10 percent in after-hours trading, dipping below $24 from Thursday's closing price of $26.84 as concerns surfaced that Facebook's growth is losing steam.
In its first earnings report as a public company, Facebook said that it had posted revenues of $1.184 billion during the second quarter of 2012, a 32 percent year-over-year increase, beating estimates of $1.15 billion. In filings to the SEC earlier this year, Facebook reported revenues of $1.058 billion for the previous quarter, a 45 percent increase over $731 million in revenues for the same quarter a year ago.
Advertising generated the bulk of revenues during Q2 2012. Facebook collected $992 million in ad sales, constituting 84 percent of total revenues.
The social media giant posted a loss of $157 million, or 8 cents a share. Adjusted earnings were $295 million, or 12 cents a share, in line with Wall Street estimates.
Users keep flocking to the service. Its average daily and monthly user counts both increased, reaching 552 million and 955 million, respectively. By comparison, the company reported 526 million daily users and 901 million monthly users for Q1 2012.
An increasing number of users are using their mobile devices to engage with Facebook. The company reports that that the number of mobile active users has increased 67 percent year-over-year to 543 million.
During the earnings call, founder and CEO Mark Zuckerberg said "Mobile is a huge opportunity for Facebook." He added that "over the next five years, we expect 4 billion to 5 billion people to have smartphones. That's more than twice as many people that have computers today."
Facebook still faces challenges in monetizing mobile. In SEC filings leading up to its IPO, the company acknowledged that its mobile products, like the Facebook iOS and Android apps, do not "directly generate any meaningful revenue" for the company.
Today, Zuckerberg feels that the company is on the right track, citing high levels of engagement from mobile users and a promising start to Sponsored Stories. "By the end of June, Sponsored Stories in news feed was at a run rate of over $1 million per day in revenue and about half of that is coming from mobile," he said.
"Sponsored Stories in news feed are the cornerstone of our mobile monetization strategy," said Facebook COO Sheryl Sandberg during the call.