Even amidst a year of data scandals and criticism from the punditry class, Facebook has seemingly proven itself to be made of Teflon.
Facebook pulled in an all-time high of $14.9 billion in advertising revenue, up 26%. Advertising makes up more than 98% of Facebook’s total revenue, which was also up by 26%. Daily active users are up to 1.56 billion (up 8%) and monthly active users up to 2.38 billion (also 8%). Mobile ad revenue continues to climb, now comprising 93% of Facebook’s total revenue (up from 91%).
COO Sheryl Sandberg also noted that for the quarter, the top-100 advertisers contributed less than 20% of its total ad revenue, signalling that its advertising pool is more diverse in terms of ad spend and campaign size than it was this period last year.
While Facebook says it is seeing a “fast adoption” of its Stories format and that there is more than half a billion daily activities across its combined Facebook, Messenger, Instagram and WhatsApp Stories, it still has not broken down usage or revealed details about Story adoption on its flagship Facebook app. Facebook confirmed that it now has three million unique advertisers using Story Ads across the various platforms.
Expenses were up by 80%, coming in at $11.8 billion, which Facebook itself predicted in its Q4 results (it predicted a jump of 40 to 50% for the whole year, which has since been upped to 47 to 55%). Expenses were driven by numerous factors including a 36% increase in headcount, but the biggest driver in expenses was, according to Facebook, a $3 billion legal expense accrued in the first quarter related to its ongoing U.S. Federal Trade Commission inquiry. This meant that Facebook’s operating margin was smaller, down to 22% from 46%. Facebook stated that excluding the expense, the operating margin would have been 20 percentage points higher.
In a statement issued to press following the results, Facebook restated its commitment to become a more privacy-focused platform with additional emphasis on private interactions, encryption, reducing permanence, safety, secure data storage and more. The company vowed to “rebuild more of our services around these ideas” over the next several years, and it is currently in the consultation stage of how to best carry this out.
Facebook also added that it expects revenue growth rate to decelerate sequentially throughout the coming quarters, consistent with its previous outlooks.
News of the results sent Facebook’s stock up by 4% after market close, opening April 25 at US$196.51 per share (a year-to-date high). The continued success of Facebook – and enthusiasm from investors – is in line with what numerous experts in the field have told MiC – that despite Facebook’s occasional controversies, advertisers have continued to invest in the platform thanks to its reach and its identity solution technology.
Facebook is far from the only social platform riding a high this week; stocks also shot up for Twitter and Snap after pulling in big – in some cases, bigger-than-expected – numbers for revenue and users.
