Mark Zuckerberg Facebook

According to its latest financial results on Tuesday, Facebook pulled in impressive earnings, but missed the mark on revenue and active users.

For the three-month period between July and September, the social media company reported earnings of $1.76 per share, exceeding estimates of $1.47. But its $13.73 billion in revenue couldn’t quite reach the $13.78 billion analysts estimated.

Expectations pegged 1.51 billion for daily active users and 2.29 billion for monthly actives, so Facebook’s reported 1.49 billion daily and 2.27 billion monthly came up short. However, the company attributed the decline to a change in how it calculates users.

Naturally, the company would prefer to look at overall user counts instead of drilling down into individual numbers. Daily users across the entirety of its platforms — which include Facebook, WhatsApp, Instagram and Messenger — number 2.6 billion people, up from 2.5 billion, chief executive officer Mark Zuckerberg pointed out.

“We’re seeing the way people connect shifting to private messaging and Stories,” Zuckerberg said on the earnings call. “We have great products here that people love, but it will take some time for our business to catch up to our community growth.”

Video is also growing dramatically across the apps, he added, referring to Facebook Watch, as well as Instagram’s IGTV.  He singled out YouTube and Apple’s iMessage as primary competitors in video and messaging, respectively.

The company will continue investing deeply to address data privacy and security threats. Considering its security woes — which include a large security breach as recently as September — the priority comes as no surprise.

Zuckerberg warned investors last quarter to expect that revenue growth would decline in the third and fourth quarters due to such key investments. Clearly, the company is focusing more on Stories, extending the successful Instagram feature to the Facebook platform itself. Stories may have lower ad rates, but it’s seen as the future of the company, along with messaging and video.

The ceo also acknowledged that “we feel like we’re pretty close to saturation in a lot of countries like the U.S., “so it’s looking to developing markets for more growth. And it will explore new ways to serve brands — and not just through Messenger, which has broken 10 billion messages so far, or through WhatsApp and Instagram. As Oculus’ parent, the company is also looking to new technologies, like virtual reality.

“[We make it] simple for small businesses to transition from using our consumer apps to using our business tools,” said Sheryl Sandberg, chief operating officer. “This has been true every step of our journey so far, from online to mobile and now for messaging and Stories. In the future, this will include opportunities with the new VR/AR platforms that we’re creating as well.”

In the nearer term, assets like Instagram remain a jewel in Facebook’s crown, and it’s particularly buoyed by the fashion potential and results from shopping.

“When you look at the Instagram shopping experience, we’re seeing some really nice growth,” she added. “We have 90 million people tap to reveal product tags in posts every month to learn more about them. And we’re putting real investment behind this.”

In the third quarter, Instagram launched shopping in Stories worldwide and started testing a new shopping channel within the Explore section. Sandberg called those opportunities “big,” suggesting that the company will put more muscle behind those efforts.

“Instagram can be more interest-based in some places than Facebook, so there are places in Instagram like fashion or like shopping that have very high signal. And that gives us, I think, a very strong opportunity there,” she added.

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