Facebook (FB) on Wednesday reported first quarter earnings that handily topped expectations, as political and regulatory crises continued to swirl across the main social community, however have been offset by A virtually 50% surge in promoting revenues.
Here’s a snapshot of key metrics expected versus analyst expectations, in line with a Bloomberg consensus forecast of Wall Street analysts:
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Revenue: $26.17 billion vs $23.72 billion estimated
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Advertising revenue: $25.44 billion vs. $23.27 billion estimated
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Earnings per share (Adjusted): $3.30 vs $2.61 expected
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Daily Active Users (DAU): 1.88 billion vs 1.866.6 billion estimate
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Monthly Active Users (MAU): 2.85 billion vs 2.830 billion estimated
Advertising, the fulcrum of Facebook’s enterprise mannequin, jumped by 46% yr over yr, the corporate mentioned, powered by a sluggish however regular rise in DAUs and MAUs.
“We had a strong quarter as we helped people stay connected and businesses grow,” mentioned Mark Zuckerberg, Facebook founder and CEO. “We will continue to invest aggressively to deliver new and meaningful experiences for years to come, including in newer areas like augmented and virtual reality, commerce, and the creator economy.”
Facebook — which has posted three consecutive quarters of better-than-expected results— is one in every of a cohort of tech shares that rallied all through the COVID-19 disaster as a “stay at home” play that favored service corporations whose fashions are constructed on e-commerce.
However, the sluggish return to normalcy has prompted Wall Street to weigh whether or not the forces that after favored Facebook and different tech corporations are sustainable within the medium-term.
In its outlook, Facebook mentioned it expects revenue development to stay “stable, or modestly accelerate” within the present quarter — but warned that the second half of the yr could be characterised by development charges that will “significantly decelerate…as we lap periods of increasingly strong growth.”
The earnings outcomes come a day after Facebook — together with Twitter (TWTR) and Alphabet (GOOG)— have been grilled in a Senate hearing about how their platforms share and disseminate content material that may be construed as false or deceptive. The platform has been on the middle of a roiling debate about how social media algorithms are contributing to a politically charged and polarizing atmosphere.
Meanwhile, an increasingly fierce rivalry between Facebook and Apple (AAPL) has taken one other flip, as the latter just lately unveiled new expertise that forces apps to ask customers for permission to make use of their knowledge. The struggle has now entered the courts, with Facebook becoming a member of different corporations in pursuing antitrust claims against the iPhone maker.
Apple’s Identifiers for Advertising (IDFA) has grow to be the newest flashpoint between the 2 tech titans, and has raised questions on Wall Street about whether or not the modifications will impression Facebook’s huge promoting warfare chest.
Facebook cited “increased ad targeting headwinds” this yr as the IDFA takes root in Apple’s newest software program replace, which the corporate expects to be felt in Q2.
“Our recent ad call suggests a modest, low-single digit IDFA impact on ad spend with FB having ample time to prepare and develop workarounds,” analysts at Bank of America mentioned just lately. The financial institution charges Facebook’s inventory as a “Buy” with a worth goal of $358.
Yet within the medium time period, “shopping remains a big focus, as FB’s ability to improve ad conversion and monetize organic posts with shopping capabilities could help offset tougher [second half] revenue comps,” BofA added.
Facebook’s inventory, which closed larger at $307.10 in Wednesday’s session, popped by over 5% in after-hours buying and selling.
Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek
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