Facebook’s CEO Mark Zuckerberg speaks during the F8 Facebook Developers conference on April 30, 2019 in San Jose, California.
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Facebook reported its slowest revenue growth since its 2012 IPO, but still blew past analysts’ estimates. Facebook shares rose more than 8% in extended trading.
Here’s what Facebook reported:
- Earnings: $1.80 vs. $1.39 per share forecast by Refinitv
- Revenue: $18.7 billion vs. $17.4 billion forecast by Refinitiv
- Daily active users (DAUs): 1.79 billion vs. 1.7 billion forecast by FactSet
- Monthly active users (MAUs): 2.7 billion vs. 2.6 billion forecast by FactSet
- Average revenue per user (ARPU): $7.05 vs. $6.76 forecast by FactSet
Facebook said that its user growth reflects increased engagement from consumers who are spending more time at home.
“More recently, we are seeing signs of normalization in user growth and engagement as shelter in-place measures have eased around the world, particularly in developed markets where Facebook’s penetration is higher,” the company said in the statement.
The company is also seeing better-than-expected revenue per user, a reflection of its continued pricing power when it comes to big brands advertising on the site.
In the U.S. and Canada, Facebook’s user base rose to 198 million daily active users from 195 million a quarter earlier. Its user base in Europe remained flat at 305 million daily active users in the prior quarter.
Facebook said it counts 3.14 billion monthly users across its family of apps, compared to 2.99 billion in the previous quarter. This metric is used to measure Facebook’s total user base across its main app, Instagram, Messenger and WhatsApp.
The company forecast revenue growth for the third quarter of about 10%, beating analysts’ expectations for growth of 7.9%.
Facebook said its forecast reflects ongoing headwinds, including economic volatility, the ad boycott, regulations around ad targeting and “expected changes to mobile operating platforms.”
As of Thursday’s close, Facebook shares were up 14% this year, topping the 0.5% gain for the S&P 500. Based on its after-hours price, the stock is at a record.
Facebook’s “Other” revenue came in at $366 million for the quarter, up 40% compared to last year. This includes sales of Oculus virtual reality headsets and the Portal video-chatting devices.
In mid-June, activists launched a campaign urging brands to suspend their advertisements on Facebooks throughout July in protest of the hate speech and misinformation on the site. Coca-Cola, Starbucks, and Volkswagen, are among the many participants.
The second-quarter results come a day after CEO Mark Zuckerberg’s testimony on Wednesday before the House Antitrust Subcommittee hearing, alongside the CEOs of Amazon, Apple and Google. During the hearing, Zuckerberg was criticized for Facebook’s acquisitions of Instagram and WhatsApp, its enforcement of policies against competitors like Pinterest and the way that it’s copied rivals like Snap.
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