Facebook Shares Soar on Strong First Quarter

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Mark Zuckerberg

The company now has 1.09 billion daily active users.

Facebook shares were trading up more than 7 percent after hours on Wednesday after the company reported a 16 percent boost in users for the first quarter. 

The social network had 1.09 billion daily active users on average during the first three months of the year, up 16 percent from the same period last year. Its user base has also grown to 1.65 billion monthly active users. 

Facebook also reported quarterly revenue of $5.38 billion, an increase of 52 percent year-over-year, and adjusted earnings of 77 cents per share. Both numbers were well above Wall Street's expected revenue of $5.26 billion and adjusted earnings of 62 cents per share. 

Mobile continues to be a huge area of growth for Facebook. Of its total daily active users, 989 million on average were mobile DAUs, up 24 percent year-over-year. And mobile advertising revenue made up about 82 percent of Facebook's $5.2 billion in total advertising revenue during the quarter. 

The Menlo Park, Calif.-based company is also proposing the creation of new class-C shares that it says will allow CEO Mark Zuckerberg to sell some of his stock while remaining "in an active leadership role at Facebook." The change will be considered at Facebook's June 20 annual stockholders meeting. 

During a conference call with investors, Facebook executives drove home just how important mobile growth has been for the business. Zuckerberg also acknowledged that there were recent weeks where more than 1 billion people checked Facebook on mobile each day. 

Video was also a key point for the company. Facebook-owned Instagram, for example, saw video watching increase by 40 percent over the past year. Meanwhile, Zuckerberg noted that Facebook is giving disproportionate attention to Live because it's not just about consuming content, but interacting with it. He added that he'd like to introduce other forms of interactive video. 

One such form of video is virtual reality, but while the immersive technology is a long-term focus for Facebook, Zuckerberg stressed that it won't become a mainstream success "right away." And CFO David Wehner noted that sales of the Oculus Rift would not be material during 2016. 

Facebook shares closed Wednesday flat at $108.89. 

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