Facebook tops 1.9 billion monthly users
- Author: Arturo Norris May 04, 2017,
May 04, 2017, 16:50
San Francisco - Facebook on Wednesday reported that its quarterly profit surged as its ranks of monthly users closed in on 2-billion, but warned of rising expenses and slowing revenue growth.
The company said first-quarter sales climbed 49 per cent to US$8.03 billion, compared with the US$7.83 billion analysts had projected.
Most of Facebook's revenue came from advertising, with ad revenue rising 51 percent to $7.86 billion, above a $7.67 billion consensus.
"We had a good start to 2017", Facebook co-founder and chief Mark Zuckerberg said in the release. "We're continuing to build tools to support a strong global community". Net income rose to US$3.06 billion, or US$1.04 a share, topping the 87-cent average estimate compiled by Bloomberg.
Earlier this year, when Facebook announced its earnings for the fourth quarter and full year 2016, it showed a steady growth in its revenue and user base.
Analysts on average had expected monthly active users of 1.91 billion, according to financial data and the analytics firm FactSet.
Brian White of Drexel Hamilton, who has a "buy" rating on shares of Snapchat, expects Snapchat to hit 171 daily active users in the first quarter of the year, keeping it behind Facebook in terms of that metric.
Facebook's work with Instagram is seen as proof that it can replicate its main network's success in advertising on other properties.
Ad load growth. Though not growing as fast as before, ad load increases still helped Facebook's total ad impressions rise 32% annually.
When we start digging into the numbers, we start noticing a few interesting developments that are perhaps concerning investors.
Some analysts ascribed the share price fall in part to Facebook's spending.
This is a pretty impressive claim considering that Facebook basically believes that it now exceeds Snapchat and all of its peers, when it comes to communication that has a camera at its center. First Quadrant L P CA raised its position in shares of Facebook by 1.4% in the third quarter.
The previous quarter was also marked by Mark Zuckerberg's 6,000-word letter that's a manifesto for why we need communities and globalism, bucking sentiment from some world leaders and further sowing seeds about the Facebook chief's potential presidential run in the future (he has denied it).
"These guys have made it brain-dead easy, which is awesome", he said, noting that Atom plans to spend more on Snapchat with the new self-service tool.
Perhaps investors got spooked by the company's announcement earlier in the day that would hire 3,000 people to expedite the removal of uploaded videos of murder and suicide.
Rising user engagement. Mark Zuckerberg noted time spent per DAU for Facebook's app family continues to grow, and growth was especially strong for Instagram, which just topped 700 million MAUs four months after topping 600 million.
There are only two ways for Facebook to grow revenue, with an ad-based model, increase the number of eyeballs, or increase the revenue per eyeballs.