Facebook Q3 earnings higher than expected
Mark Zuckerberg admitted that Facebook “may be close to saturated in developed countries” as the social media giant posted a 33% increase in revenue.
The results fell short when it came to revenue, daily active user and monthly active user estimates in the company’s latest earnings report, despite exceeding analyst expectations on earnings per share. Facebook also told investors to expect increased expenses in 2019.
Third-quarter revenue rose 33% to $13.73 billion, compared to the $13.8 billion analysts estimated. Profit rose to $1.76 a share, well ahead of Wall Street projections, according to data compiled by Bloomberg.
In spite of controversies including the Cambridge Analytica data privacy scandal, the quarterly results showed Facebook continuing to grow, although Zuckerberg cautioned that revenue could slow in the future.
“Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day,” the founder and CEOsaid in a statement released with the earnings. “We’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well.”
“Facebook grew revenue at a nice pace in the important US and Canada markets,” EMarketer analyst Debra Aho Williamson said. “Facebook also managed to eke out a small usage gain in the US and Canada. After the flatness we saw last quarter, that’s a good sign.”
Maintaining growth in developed markets like the US is important because the new users that Facebook brings on in other parts of the world are usually in less-lucrative advertising markets.
The Facebook results suggest that advertisers continue to buy more Facebook ads. And they’ve embraced Instagram, the photo-based social network that recently passed 1 billion users.
On the call, Zuckerberg framed the numbers as a sign that Facebook had remained stable and was saturated in “developed countries”.
He emphasized that the company was expanding its ability to deliver stories and video, and would increase efforts to build communities – replacing that as a priority above newsfeed – with new offers like dating connections that will be rolled out soon.
Facebook also announced the launch of a new “war room,” designed to mitigate the spread of misinformation, earlier this month.
Last week, the company announced that the war room team had detected and deleted 82 pages, groups, and accounts, all found to be part of a Iranian disinformation campaign targeting voters in the US and UK.