Facebook reported quarterly earnings that beat analysts' estimates on Wednesday, and revenue that topped expectations, as ad revenue grew 53 percent.

The fourth-quarter earnings were up from 79 cents per share on $5.84 billion in revenue in the year-earlier period.



Facebook shares rose as much as 3 percent after hours, but were last up less than 1.5 percent.

The company's ad business zoomed higher, as retailers poured money into snagging customers during the busy holiday shopping season. Only Google rivals Facebook when it comes to digital advertising dominance.



"That's just massive earnings growth," Danielle Hughes, CEO of Facebook-shareholder Divine Capital, told CNBC's "Closing Bell" on Wednesday. "Same thing for EPS."

But at the same time, Facebook's virtual reality company, Oculus, is on the hook for $500 million after losing a key lawsuit.

The results come after a volatile year for Mark Zuckerberg's social network, which despite its gargantuan size, has managed to add more users at a rapid clip. The company added 17 percent more monthly users from a year ago, and 18 percent more daily users.



"I think the real attractive thing about Facebook is it's got a multi-layer revenue growth story," Michael Graham, managing director and senior equity analyst at Canaccord Genuity, told CNBC's "Closing Bell." "Users are growing, engagement is improving and monetization of each user is also improving."

"Our business did well in 2016, but we have a lot of work ahead to help bring people together," Zuckerberg said in a statement.