Facebook Mobile ad revenue grew 72% yoy to $3.35bn representing 78% of total ad sales and which compares to 74% growth in 2Q15 and 76% of total ad revenue. On a sequential basis, mobile ad revenue grew 16% qoq versus consensus of 12% and compares to 18% qoq growth in 3Q14. Absolute upside in mobile revenue versus consensus was $106mn, versus $84mn in 2Q15, $51mn in 1Q15, $129mn in 4Q14, $104mn in 3Q14, $83mn in 2Q14 and $118mn in 1Q14. Desktop ad revenue of $946mn (-6% yoy) compared to consensus of $930mn (-7%).
CPMs increased 61% yoy (GSe +59%) driven once again by the ongoing shift towards mobile, but also changes to the desktop user experience in 3Q14, when Facebook significantly reduced the number of ads being seen on the right hand rail. We note that with the anniversary, this was the last quarter where we should see such material deltas between both. In fact, on a sequential basis, management commented that CPMs increased 5% while impressions grew 7%. Impressions on the other hand declined 10% yoy (GSe: -11%), for reasons cited above. Looking ahead, we are modeling 4Q15 CPM growth of 42% yoy while we forecast ad impressions will be flat yoy.
Daily Active Users (DAUs) increased 17% yoy and 4% qoq to 1.01bn, crossing the billion mark for the first time.
