Facebook has another quarter in the books, and the company’s business continues to boom. Its revenues rose roughly 40 percent year over year, to $4.04 billion. But its net income declined compared to last year, declining from $791 million to $719 million. Its operating margins also tumbled as Facebook’s spending soared. This measure of profitability slumped from 48 percent this time a year ago to 31 percent this quarter.
On today’s earnings call, chief financial officer David Wehner said that the company had added a near record number of new employees this quarter, most in research and development, which helps explain the change in margins. R&D spending is focused on fun things like drones and lasers that beam down internet access and of course, virtual reality.