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Facebook beats on earnings, but misses estimates on revenue and daily active users
Andrew Harrer | Bloomberg | Getty Images
Mark Zuckerberg, chief executive officer and founder of Facebook
Facebook fell short when it came to revenue, daily active user and monthly active user estimates in its latest earnings report, despite exceeding analyst expectations on earnings per share.
The company reported its third-quarter earnings after bell on Tuesday:
Earnings per share (EPS): $1.76 vs $1.47 estimated, per RefinitvRevenue: $13.73 billion vs. $13.78 billion estimated, per RefinitivDaily active users (DAUs): 1.49 billion vs. 1.51 billion estimated, according to FactSet and StreetAccountMonthly active users (MAUs): 2.27 billion vs. 2.29 billion estimated, according to FactSet and StreetAccountAverage revenue per user: $6.09 vs. $6.09 estimated, per 2.29 billion, according to Street Account
More than 2.6 billion people use the Facebook family of apps per month, the company said. Those apps include Facebook, WhatsApp, Instagram or Messenger. That figure was up 100 million more people from last quarter. More than 2 billion people a day use at least one of those apps.
“Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day,” CEO Mark Zuckerberg said in a statement. “We’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well.”
The company said it increased headcount 45 percent and costs went up 53 percent as well. More than 92 percent of its advertising revenue for the quarter came from mobile advertising, up from 88 percent year-over-year.
Last quarter, Facebook advised it expected its revenue growth rates to decline as much as the high single-digit percentages during the third and fourth quarters of this year because the company has invested more in its Stories product, which has lower ad rates, and other things like security and compliance with the EU’s GDPR data privacy law.
However, the third-quarter earnings did not show as much of a slowdown as projected. Worldwide ARPU increased 2 percent from last quarter. U.S. and Canada ARPU showed signs of growth as well, up 7 percent from last quarter.
Shares were initially down more than 5 percent after the report, before recovering to positive territory.