Facebook beats earnings expectations, reporting fastest revenue growth since 2016

Facebook's results exceeded estimates as the company lapped the first full quarter of Covid impact, leading to the fastest revenue growth since 2016. Read more...

CEO of Facebook Mark Zuckerberg walks to lunch following a session at the Allen & Company Sun Valley Conference on July 08, 2021 in Sun Valley, Idaho.

Kevin Dietsch | Getty Images

Facebook shares fell 5% in extended trading on Wednesday after the social-media company issued second-quarter results that exceeded analysts’ expectations.

Here’s how the company did:

  • Earnings: $3.61 per share, adjusted, vs. $3.03 per share as expected by analysts, according to Refinitiv.
  • Revenue: $29.08 billion, vs. $27.89 billion as expected by analysts, according to Refinitiv.
  • Daily active users (DAUs): 1.91 billion, vs. 1.91 billion as expected by analysts, according to StreetAccount.
  • Monthly active users (MAUs): 2.90 billion, vs. 2.91 billion as expected by analysts, according to StreetAccount.

Facebook’s revenue grew by 56% year over year, according to a statement. It’s the fastest growth since 2016, accelerating from 48% growth in the prior quarter. Revenue from Facebook’s Other segment, including consumer hardware such as Oculus virtual-reality headsets, totaled $497 million, up 36% and less than the $685.5 million StreetAccount consensus.

This quarter, analysts and shareholders will be looking to see just how much Apple’s iOS 14.5 update impacted Facebook’s advertising business. The update allows iPhone and iPad users to limit companies from tracking their device’s activity. This makes it difficult for companies like Facebook to target users with personalized ads. 

Already, Snap and Twitter have navigated the challenges of Apple’s iOS 14.5 update, which gives people more control over apps that want to track them, without much trouble. Both companies did warn that the long-term impacts of iOS 14.5 remain to be seen, but so far, the early returns have been promising.

Facebook also had some run-ins with Washington during the quarter. A federal court dismissed an antitrust complaint from the Federal Trade Commission against the company, along with a separate case brought by 48 state attorneys general. The FTC has until Aug. 19 to change its complaint, and the group of states said Wednesday it will fight the court’s decision.

However, Facebook came under the scrutiny of the Biden administration earlier this month when the Biden administration scolded the social-media company for not doing enough to combat misinformation on its services that discourage people from taking Covid-19 vaccines. At one point, President Joe Biden said “they’re killing people” in regard to misinformation on Facebook.

Facebook shares are up about 37% since the start of the year. The S&P 500 index has risen 17% over the same period.

Executives will discuss the results on a conference call starting at 5 p.m. ET.

This is breaking news. Please check back for updates.

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