Facebook's third quarter results highlighted how the company is increasingly monetizing its network better.
The company reported third quarter new income of $425 million, or 17 cents a share, on revenue of $2.02 billion, up 60 percent from $1.26 billion a year ago. Non-GAAP earnings for the third quarter were 25 cents a share.
Wall Street was expecting Facebook to report non-GAAP third quarter earnings of 19 cents a share on revenue of $1.91 billion.
Facebook's average revenue per user in the U.S. and Canada was $4.85, up from $3.40 a year ago. Worldwide average revenue per user was $1.72.
In a nutshell, Facebook could just bring its revenue per user up to U.S. and Canada levels in the rest of the world and thrive for years to come.
Facebook's metrics were solid across the board. Operating margins in the third quarter were 37 percent, up from 20 percent a year ago.
Daily active users were 728 million in September, up 25 percent from a year ago. Monthly active users were 1.19 billion in September, up 18 percent from a year ago.
And mobile active users were 874 million, up 45 percent from a year ago.
The biggest takeaway from Facebook is that it has managed the mobile transition well. Mobile ad revenue was 49 percent of advertising revenue, which totaled $1.8 billion in the third quarter.
Payments and other revenue was $218 million.
Facebook, which ended the quarter with $9.33 billion in cash and marketable securities, did say that its costs also increased 45 percent in the third quarter due to infrastructure spending and additional hiring.
For the nine months ended Sept. 30, Facebook spent $1 billion on research and development, down from $1.1 billion a year ago.
Bottom line: Facebook is showing that it has financial levers to pull and can be disciplined. Here's a look at Facebook's expenses as a percentage of revenue.