24/09/2020

Facebook beat Wall Street estimates in Q4 but slowing profit growth beat up the share price. Facebook reached 2.5 billion monthly users, up 2%, from 2.45 billion in Q3 2019 when it grew 1.65%, and it now has 1.66 billion daily active users, up 2.4% from 1.62 …

Facebook beat Wall Street estimates in Q4 but slowing profit growth beat up the share price. Facebook reached 2.5 billion monthly users, up 2%, from 2.45 billion in Q3 2019 when it grew 1.65%, and it now has 1.66 billion daily active users, up 2.4% from 1.62 billion last quarter when it grew 2%. Facebook brought in $21.08 billion in revenue, up 25% year-over-year, with $2.56 in earnings per share. But net income was just $7.3 billion, up only 7% year-over-year compared to 61% growth over 2018.
Facebooks earnings beat expectations compared to Zack’s consensus estimates of $20.87 billion in revenue and $2.51 earnings per share. Facebook shares fell over 6% in after-hours trading following the earnings announcement after closing up 2.5% at an all-time high of $223.23 today.
Facebook managed to add 1 million daily users in the U.S. & Canada region where it earns the most money after returning to growth there last quarter following a year of slow or no growth. Facebook’s stickiness, or daily to monthly active user ratio remained at 66% amidst competition from apps like TikTok and a resurgent Snapchat.
Facebook notes that there are now 2.26 billion users that open either Facebook, Messenger, Instagram, or WhatsApp each day, up from 2.2 billion last quarter. The family of apps sees 2.89 billion total monthly users.
Facebook released a new stat with this earnings report: Family Average Revenue Per Person. That’s essentially the company’s total revenue divided by total users on Facebook, Messenger, Instagram, and WhatsApp. Clearly, the company is trying to use Instagram’s growing ad revenue to make the rest of the company look stronger. This might help mask changes in the Facebook app’s own revenue as teens look to more youthful content feeds.
The business aside, Facebook had another tough quarter under the scrutiny of journalists and regulators. Democratic presidential candidates have railed against CEO Mark Zuckerberg’s decision to continuing allowing misinformation in political ads. The company dropped out of the top 10 places to work, and pledged $130 million to fund an Oversight Board for its content policies. The FTC continued its anti-trust investigation and weighed an injunction that would halt Facebook intermingling its messaging app infrastructure.
But those headwinds didn’t stop Facebook’s march forward. Its four main apps took the top four spots amongst the most downloaded apps of the 2010s. It’s acquiring gaming companies like Playgiga and the studio behind VR hit Beat Saber. And its share price remains at an all-time high. While the world may be increasingly uncomfortable with Facebook’s access to private data, there’s no debate about how incredibly valuable that data is.