Supported by strength in its mobile advertising business, Facebook reported first quarter earnings that came in well above expectations says Michael Berger, Associate Editor of MoneyShow.com, who highlights the social media giant’s results and his future expectations for the shares.

Facebook Inc. (FB) reported first quarter earnings that blew away expectations as the strong quarter was buoyed by strength in its mobile advertising business.

Wall Street had expected earnings of $0.62 per share off of $5.25 billion in revenue. During the quarter, Facebook reported earnings of $0.77 per share off of $5.38 billion in revenue.

Not only did Facebook beat on top and bottom line estimates, but it also reported to have more active users than expected. Wall Street was expecting 1.62 billion active users and Facebook reported to have 1.65 billion active users.

Creating New Share Class and Issuing Stock Dividend

Following in the footsteps of Alphabet (GOOGL) and Under Armor (UA), Facebook proposed a new class of stock to make sure that CEO Mark Zuckerberg retained majority control of the company.

If the proposal is approved, shareholders will receive two non-voting shares for each single share they hold. Shareholders will vote on the proposal at the company's annual meeting on June 20th.

The new structure will encourage Facebook to remain focused on Zuckerberg’s long-term vision for the company while encouraging Zuckerberg to remain in an active leadership role.

Revenue Growth Shows No Signs of Slowing Down

While many companies have reported lower revenue when compared to the same period last year, Facebook did not.

Facebook reported a 51.9% increase in revenue when compared to last year. This growth was fueled by higher ad spending which came in at $5.2 billion, 56.8% higher than the same period last year. 

Mobile ad revenue represented approximately 82% of total sales during the quarter, up from 73% in the same period a year earlier.

New Features Are Attracting New Advertisers

The company’s increasingly popular mobile app and push into live video attracted new advertisers during the quarter and actually encouraged existing clients to increase spending.

As Facebook continues to roll out new features that are focused on ramping up mobile advertising, revenue should continue to increase.

We expect the company to continue to see more ad revenue growth from Instagram for years to come.

Future is Bright

This earnings season has been rough for technology stocks and Facebook’s results will serve as the exception.

Facebook has been able to grow at rapid rate and the company has not even tried to generate sales from newer chat applications like WhatsApp, which has 1 billion users, and Messenger, which has 900 million.

Facebook opened up Instagram, its photo-sharing app, to advertisers last year and the application is in the early innings of a growth cycle.

CEO Zuckerberg is also investing in other, more ambitious bets, including virtual reality and artificial intelligence.

Editor’s Disclosure: We purchase call options on Facebook ($108 strike price and April 29th expiration) and we plan to exit this position today.