Authorization

Facebook shares rise on strong Q3, users up 2% to 2.45B

Despite ongoing public relations crises, Facebook kept growing in Q3 2019, demonstrating that media backlash does not necessarily equate to poor business performance.
Facebook reached 2.45 billion monthly users, up 1.65 percent from 2.41 billion in Q2 2019 when it grew 1.6 percent, and it now has 1.62 billion daily active users, up 2 percent from 1.587 billion last quarter when it grew 1.6 percent. Facebook scored $17.652 billion of revenue, up 29 percent year-over-year, with $2.12 in earnings per share.
Facebook shares rise on strong Q3, users up 2% to 2.45B

Facebooks earnings beat expectations compared to Refinitivs consensus estimates of $17.37 billion in revenue and $1.91 earnings per share. Facebooks quarter was mixed compared to Bloombergs consensus estimate of $2.28 EPS. Facebook earned $6 billion in profit after only racking up $2.6 billion last quarter due to its SEC settlement.
Facebook shares rose to 1.84% in after-hours trading to $191.71 after earnings were announced, following a day where it closed down 0.56% at $188.25.
Notably, Facebook gained 2 million users in each of its core US & Canada and Europe markets that drive its business, after quarters of shrinkage, no growth, or weak growth there in the past 2 years. Average revenue per user grew healthily across all markets, boding well for Facebooks ability to monetize the developing world where the bulk of user growth currently comes from.
Facebook says 2.2 billion users access Facebook, Instagram, WhatsApp, or Messenger every day, and 2.8 billion use one of this family of apps each month. Thats up from 2.1 billion and 2.7 billion last quarter. Facebook has managed to stay sticky even as it faces increased competition from a revived Snapchat, and more recently TikTok. However, those rivals might more heavily weigh on Instagram, for which Facebook doesnt routinely disclose user stats.
Facebook shares rise on strong Q3, users up 2% to 2.45B

Facebooks earnings announcement was somewhat overshadowed by Twitter CEO Jack Dorsey announcing it would ban all political ads something TechCrunch previously recommended social networks do. That move flies in the face of Facebook CEO Mark Zuckerbergs staunch support for allowing politicians to spread misinformation without fact-checks via Facebook ads. This should put additional pressure on Facebook to rethink its policy.
Zuckerberg doubled-down on the policy saying I believe that the better approach is to work to increase transparency. Ads onFacebook are already more transparent than anywhere else he said, noting Facebook expects political ads to make up less than less than 0.5% of our revenue next year.
Facebook also announced that lead independent board member Susan D Desmond-Hellman has resigned to focus on health issues.

Scandals Continue, But So Does Growth


Overall, it was another rough quarter for Facebooks public perception as it dealt with outages and struggled to get buy-in from regulators for its Libra cryptocurrency project. Former co-founder Chris Hughes (who Ill be leading a talk with at SXSW) campaigned for the social network to be broken up a position echoed by Elisabeth Warren and other presidential candidates.
The company did spin up some new revenue sources, including taking a 30% cut of fan patronage subscriptions to content creators. Its also trying to sell video subscriptions for publishers, and it upped the price of its Workplace collaboration suite. But gains were likely offset as the company continued to rapidly hire to address abusive content on its platform, which saw headcount grow 28% year-over-year to 43,000. There are still problems with how it treats content moderators, and Facebook has had to repeatedly remove coordinated misinformation campaigns from abroad. Appearing concerned about its waning brand, Facebook moved to add from Facebook to the names of Instagram and WhatsApp.
While it escaped with just a $5 billion fine as part of its FTC settlement that some consider a slap on the wrist, especially since it wont have to significantly alter its business model. But the company will have to continue to invest and divert product resources to meet its new privacy, security, and transparency requirements. These could slow its response to a growing threat: Chinese tech giant ByteDances TikTok.

Zuckerberg misunderstands the huge threat of TikTok
See also:
Leave a comment
News
  • Latest
  • Read
  • Commented
Calendar Content
«     2019    »
 123
45678910
11121314151617
18192021222324
252627282930