Mark Zuckerberg Facebook

Congressional testimonies aside, Facebook had a very good growth in the third quarter. On its earnings call Wednesday, the social media company reported that revenue jumped 47 percent, with reported results of $10.3 billion outpacing expectations of $9.84 billion and earnings per share reaching $1.59.

After the closing bell, Facebook shares traded as high as $185, then stepped back upon news of growing expenditures.

The network now caters to nearly 2.1 billion monthly users, with almost 1.4 billion people using it every day. Photo-sharing app Instagram, which swelled to 500 million daily active users this quarter, also “saw good results in the business where total revenue grew 4 percent year-over-year,” said Mark Zuckerberg, Facebook’s chief executive officer. “And we had our first-ever quarter with more than $10 billion in revenue.”

Facebook now serves more than six million advertisers and logged ad sales of $10.1 billion, a 49 percent increase from last year. Mobile ad revenue shot up to $8.9 billion, representing a boost of 57 percent. The average price per ad this quarter increased 35 percent, and the number of ad impressions served reached 10 percent, largely fueled by feed ads in Facebook and Instagram.

But despite the impressive numbers, shares dipped in after-hours trading when the company warned investors to expect a sharp increase in operating expenses.

That’s partly related to the issue that brought Facebook, as well as Google and Twitter, to Washington, D.C., this week: “None of that [success] matters if our services are used in a way that doesn’t bring people closer to together, or if the foundation of our society is undermined by foreign interference,” Zuckerberg said at the top of the call, referencing the web’s fake news epidemic and the Russia investigation that occupies much of the nation’s attention.

Facebook’s ad targeting powers, which propel its revenues, put it in the hot seat in Washington, prompting legislators to wonder if it must apply deeper regulations to information dissemination over social media. Zuckerberg, for his part, pledged to battle fake news and make advertising more transparent. That costs money.

He warned that the company plans to invest deeply in security, which will have an impact on revenues. The social giant already employs 10,000 people who work on safety and security on the platform, and it plans to double that next year to enforce community standards and review ads.

“We’ve testified in Congress over the past couple days about activity we found in last year’s election,” he said. “We’re working to make advertising more transparent….Even without legislation, we’re already moving forward on our own to bring advertising on Facebook to an even hiring standard of transparency than ads on TV or other media.”

The effect of this security push and other priorities — including a major push for video content and video ads, as well as ongoing improvements for advertising tools, augmented and virtual reality via Oculus development, and artificial intelligence, among other things — will drive an upward spike in operating expenses.

“We expect full year 2018 total expenses will grow approximately 45 to 60 percent compared to full year 2017,” said David Wehner, chief financial officer.

The news caused the stock to reverse course after an initial move up. Shares of Facebook were down 1 percent to $179.50 after the company finished its conference call with analysts.

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