New | Facebook sales soar in Q3 by 56 pc; powered higher by video advertising and Instagram

Facebook’s revenue topped analysts’ projections, boosted by video advertising and sales from Instagram.

Third-quarter sales grew 56 per cent to US$7.01 billion, the company said Wednesday in a statement. That compared with analysts’ average estimate of $6.92 billion. The company drew 84 per cent of its advertising revenue from mobile phones, unchanged from the prior quarter.

It’s the sixth straight quarterly revenue beat for Facebook, which has increased sales by more than 50 per cent the past four quarters. As the company expands into new areas like virtual reality and mobile messaging, its consistent performance is tied to its main advertising business on mobile phones. Facebook expanded that business to Instagram, its photo-sharing application, which has started to contribute to the growth.

“So long as the core business remains as strong as it is, the overall thesis doesn’t change much -- they have a ton of opportunity,” Ben Schachter, an analyst at Macquarie Securities, said before the earnings report. “Mobile just continues to absolutely dominate for them.”

The company increased its monthly active users 4.7 per cent from the previous quarter to 1.79 billion, topping analysts’ estimates of 1.76 billion. Daily users rose to 1.18 billion.

The company doesn’t break out Instagram’s sales, but the app’s advertising revenue is growing faster than for Facebook’s main product, David Wehner, the chief financial officer, said in an interview. Still, Facebook’s app was the bigger contributor to sales growth in the quarter, he said.