Amongst massive criticism over data privacy, Facebook showed the resiliency of its advertising machine by beating Wall Street’s $11.41 billion revenue estimate in its Q1 2018 earnings report by raking in $11.97 billion in revenue with $1.69 EPS compared to $1.35 estimate. Daily active users hit 1.45 billion, up 3.57% to revive Facebook’s growth after slower 2.18% growth last quarter. But Facebook only reached 2.2 billion monthly users, a 3.28 percent growth rate that was a little slower than last quarter’s 3.39% growth. Both daily and monthly users are up 13% year-over-year, showing Facebook’s troubles haven’t paralyzed its growth.
This was perhaps the most tumultuous quarter since Facebook went public. Last quarter saw Facebook’s first ever decline in users in a market, with a 700,000 user drop in the US & Canada market following changes to promote well being that reduced the prevalence of viral videos. Meanwhile, Facebook faced intense criticism regarding the Cambridge Analytica scandal and its data privacy practices, leading a massive pull-back of developer capabilities as Zuckerberg headed to testify before congress.
Facebook was able to revive its US & Canada user growth this quarter, perking back up to 185 million, from 184 million last quarter — though that’s just a return to where it was in Q3 2017.
Demonstrating Facebook’s declining web presence, mobile made up $10.7 billion, or 91% of all ad revenue, up from 89% last quarter. Facebook reached $4.98 billion in profit, up from a weak $4.26 billion last quarter.
The recent scandals’ have put a lot of downward pressure on its share price, but apparently the company think it’s a good buy. It’s increased the amount authorized under a share repurchase program by an additional $9 billion, on top of an original $6 billion plan. Wall Street apparently liked the earnings report as shares are up over 4.2% to $166.43 in after-hours trading.
CEO Mark Zuckerberg wrote that “Despite facing important challenges, our community and business are off to a strong start in 2018. We are taking a broader view of our responsibility and investing to make sure our services are used for good. But we also need to keep building new tools to help people connect, strengthen our communities, and bring the world closer together.”