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Facebook Inc.  on Wednesday reported an 11% increase in third-quarter earnings as advertisers directed more of their spending to the social network.
Revenue rose a more-than-expected 41% to $4.5 billion, from $3.2 billion in the same period a year earlier.
Total costs and expenses increased even faster, 68%, reflecting Facebook’s heavy spending on a range of projects, including artificial intelligence, virtual reality and bringing Internet access to emerging markets.
The results reflect the company’s ability to win new advertisers who are spending more on digital advertising overall. In September, Facebook said it had 2.5 million advertisers, up 25% since February. Companies turn to Facebook to target specific groups of people and deliver ads to their news feed, especially on mobile phones.
“Facebook is your first port of call if you’re a digital advertiser and if you have money to spend,” said Pivotal Research analyst Brian Wieser.
For the third quarter, Facebook reported net income of $896 million, or 31 cents a share, up from $806 million, or 30 cents per share a year earlier.
Analysts expected Facebook to report third-quarter net income of $776.5 million, or 27 cents a share, according to data compiled by S&P Capital IQ.
Excluding some expenses, Facebook reported earnings of 57 cents a share, above the 52 cents a share projected by Wall Street analysts.
Shares of Facebook rose 2% to $105.97, an all-time high, in after-hours trading.
Facebook said 1.55 billion people tap the social network at least once a month, up from 1.49 billion in the second quarter. About 1.01 billion people checked the social network at least once a day in September, the company said.
Most of the new users come from outside North America and Europe. But those regions still deliver the bulk of Facebook’s revenue: Average revenue per user in the U.S. and Canada grew 42% to $10.49, more than three times the global average of $2.97, which rose 24%. In the Asia-Pacific region, revenue averaged $1.39 per user.
Facebook is thriving by grabbing a bigger share of a growing digital-advertising pie. Digital-ad spending is projected to increase 18% to $170.2 billion this year, according to consultancy eMarketer. It says Facebook will win 9.6% of the spending, up from 8% last year.