Facebook reports surge in users, strong profits in first quarter

Mobile daily active users reached an average of 989 million, an increase of 24 percent year-over-year.

Facebook on Wednesday reported strong profits and a surge in active users for the first quarter of 2016.

In its first quarter results published after the bell, the social media giant reported its daily active users (DAUs) reached an average of 1.09 billion for March 2016, an increase of 16 percent year-over-year. Mobile DAUs reached an average of 989 million, an increase of 24 percent year-over-year.

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Monthly active users (MAUs) were 1.65 billion as of March 31, 2016, an increase of 15 percent year-over-year, while mobile MAUs came to an average of 1.51 billion as of March 31, 2016, an increase of 21 percent year-over-year.

Facebook reported non-GAAP earnings of 77 cents a share on revenue of $5.382 billion, far exceeding predictions of 62 cents a share on revenue of $5.26 billion. Its GAAP net income for the quarter came to $1.51 billion, a 195 percent year-over-year increase.

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The bulk of GAAP revenue came from advertising at $5.201 billion, a 57 percent year-over-year increase. Payments and other fees accounted for $181 million in GAAP revenue, a decrease of 20 percent year-over-year.

Mobile advertising revenue represented approximately 82 percent of advertising revenue for the first quarter of 2016, up from 73 percent of advertising revenue in the first quarter of 2015.

On the earnings call Wednesday, Facebook executives noted that more than 3 million businesses are using Facebook's advertising products every month. The company has expanded measurement capabilities for businsesses to review results of advertising, and it's made it easier for small and medium-sized businesses to use different ad formats and targeting tools.

"We remain focused on driving our clients' businesses, moving their products off shelves, both in stores and online," COO Sheryl Sandberg said. "A big focus for us in 2016 is helping our clients understand the true business impact of their ads, especially on digital."

She added that the company made progress in the first quarter across its three priorities: Capitalizing on the shift to mobile, growing the number of marketers using Facebook's ad products and making ads more relevant and effective.

Facebook also announced Wednesday that its board of directors has approved a proposal to create a new class of non-voting, Class C capital stock. Creating this third class of shares would effectively allow Facebook CEO Mark Zuckerberg to maintain control of Facebook while selling Class C shares to fund the philanthropic work of the Chan Zuckerberg Initiative.