Facebook saw its stock rise by more than three per cent after beating expectations in the third quarter as it continues to swat away its constant criticism from governments and the public.
The company’s revenue grew 29 per cent year-over-year (YoY) to reach $17.65bn from the $13.73bn achieved in Q3 2018. This was ahead of the $17.37bn forecast by Refinitiv. Earnings per share grew 20 per cent to $2.12, comfortably ahead of the $1.91 predicted.
Daily active users (DAUs) and monthly active users (MAUs) also experienced healthy gains. DAUs were 1.62bn on average for September 2019, representing an increase of nine per cent, while MAUs were up eight per cent to 2.45bn as of 30 September. On top of this, Facebook estimates that 2.2bn people now use its platform, Instagram, WhatsApp, or Messenger every day, with 2.8bn using at least one each month.
“We had a good quarter and our community and business continue to grow,” said Mark Zuckerberg, Facebook founder and CEO. “We are focused on making progress on major social issues and building new experiences that improve people's lives around the world.”
Looking ahead, Facebook expects to see a deceleration in its fourth quarter revenue growth rate versus its third quarter rate. However, according to its chief financial officer, Dave Wehner, deceleration should be “much less pronounced” in 2020.
“Facebook's Q3 results come as no surprise given the overall success of Stories, especially on Instagram. As a company, Facebook continues to benefit from the growing popularity of Instagram among big brands. Instagram is the most engaging platform for brands overall, which is why marketers are more interested in investing in Instagram Stories than in Facebook Stories,” said Yuval Ben-Itzhak, Socialbakers CEO.
“Facebook is smart to focus on offering ‘new experiences.’ By adding Facebook Horizon, Facebook News and other new formats to its family of apps, Facebook will remain the best option for marketers who want to reach audiences with engaging content at scale.
“Within Instagram, Fashion remains the most engaging vertical with almost one-third of all interactions. eCommerce is now the second-most engaging vertical on Instagram and we predict that as more and more ecommerce brands see the return on investment in Facebook’s family of apps, social commerce will start to become the most popular form of ecommerce.
“However, in the competition for ad dollars, Instagram faces fierce competition from TikTok among marketers eager to reach younger audiences.”