Facebook's first-quarter earnings and revenue grew sharply, surpassing Wall Street's expectations thanks to an 82 per cent increase in advertising revenue.

The social network said Wednesday that it earned $642 million US, or 25 cents per share, in the January-March quarter, up from $219 million, or nine cents per share, in the same period a year ago. Adjusted earnings were $885 million or 34 cents per share.

Shares of Menlo Park, Calif.-based Facebook climbed $2.34, or 3.8 per cent, to $63.71 in extended trading after the results came out. The stock had closed down $1.67, or 2.7 per cent, at $61.36 amid a broader market decline.

Facebook says its revenue was $2.5 billion, up 71 per cent from $1.46 billion in the same period a year ago.

Analysts expected adjusted earnings of 24 cents per share on revenue of $2.36 billion.

Facebook says its finance chief, David Ebersman, is leaving on June 1 after five years. He'll be replaced by David Wehner, currently vice president of corporate finance and business planning.

The social network said it gained about 50 million new monthly active users in the quarter, increasing its total to 1.28 billion. Daily active users now total 802 million, up from 757 million in the previous quarter.

It hit a key milestone, seeing mobile monthly active users hit one billion. It also made some expensive and potentially transformational purchases, including messaging app WhatsApp and Occulus.

Advance in mobile ads

But more significant is its embrace of mobile ads, which now generate $1.34 billion or 59 per cent of Facebook’s total ad revenue.

That's a bigger share than in the fourth quarter of 2013, the first time mobile accounted for more than half of Facebook's ad revenue, at 53 per cent.

Facebook held a 6 per cent share of worldwide digital ad revenues last year, according to research firm eMarketer, which expects the company's share to grow to nearly 7 per cent this year. Google, in comparison, garnered 32 per cent of worldwide digital ad spending in 2013 and is expected to drop slightly to a fraction below that number by the end of 2014.

On the mobile front, Facebook accounted for nearly 15 per cent of worldwide ad revenue and is expected to steal some of Google's share this year to grow to 22 per cent. In comparison, Google's share was 49 per cent last year and is expected to drop to about 47 per cent by 2014's end.

Facebook's results came the same day the Federal Trade Commission cleared its $2 billion acquisition of Oculus VR, a maker of virtual reality goggles. The company also agreed to buy WhatsApp, a mobile messaging service, for $19 billion during the first quarter. The company is largely using Facebook stock to make both purchases.

Facebook's valuation and the exorbitant price tags of the deals is raising questions among tech industry experts about whether the sector is in the midst of a bubble not seen since the turn of the century.

"I'm troubled by the astronomical valuations in tech," wrote Endpoint Technologies Associates analyst Roger Kay on Forbes.com this week. "Tech isn't separate from the rest of the economy. Inflation in tech bleeds into, pumps up, infuses other sectors."