Facebook Grows (Mobile, Too) But Ads To Slow

Shares of the social media giant slumped after-hours as it seems that, according to the company, stellar numbers are going to be harder to come by going forward.

Call it a form of the law of large numbers. Facebook, after all, has more than 1 billion users viewing the site on their phones. For the quarter that just ended, the firm beat estimates for the top line and the bottom line with $7 billion in sales, edging The Street at $6.9 billion. The $1.07 in earnings per share was well above the $0.97 The Street expected. Last year, the firm had a top line of $4.5 billion and $0.57 of per share earnings.

The fact remains, however, that growth is slowing. Aside from the headline number that as much as 84 percent of Facebook’s ad revenues come from mobile, the key number has been ad load, and that is the sheer number of ads that run on the site. Other factors include the actual number of users on the site and also the amount of time they spend as users.

That first metric, said CFO David Wehner, will see ad load growth come down in a “meaningfully” significant way, beginning next year. The optics are there, as the firm will have to anniversary strong quarters from last year. The margin profile may suffer, too, as investment will continue even as growth slows.