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Facebook grew its revenue and user count despite the coronavirus pandemic, an ads boycott, an antitrust regulatory hearing, and rising scrutiny over hate speech and content moderation on its services.
Facebook reported that during its second quarter it generated $18.69 billion, crushing analysts’ estimates of $17.4 billion. Second-quarter revenue was up 11% from the same quarter last year though much slower than the 26% it grew at that time. It also grew its daily active users across its family of apps to 2.47 billion, up 15% from the same quarter last year. Monthly active users across services were up 14% totaling 3.14 billion.
“We think that Instagram has played a major role in Facebook’s ability to withstand the effects of the pandemic,” Debra Aho Williamson, eMarketer principal analyst, said in a released statement. “Although Facebook doesn’t release details about Instagram’s revenue, we believe that Instagram has been a rapidly growing contributor to the company’s total revenue, and that its success is helping to buoy Facebook as a whole.”
Facebook attributed some of its user growth to shelter-in-place orders during the first few months of the pandemic. But the company expects user growth to be flat or slightly down in most regions in the third quarter as restrictions ease.
The company’s stock jumped about 7% in after-hours trading, priced at $250.19 per share, following the announcement.
Facebook’s earnings come one day after Zuckerberg joined the CEOs of Apple, Amazon, and Alphabet to testify before the House Judiciary antitrust subcommittee. All four companies reported earnings on Thursday, each beating analysts’ estimates. The news also comes as companies have slashed their digital advertising budgets during the coronavirus pandemic (Facebook reported a slowdown in digital ads during the previous quarter, as well). Alphabet and Microsoft similarly reported slowdowns in digital ad sales.
More than 1,100 advertisers participated in a one-month Facebook ads boycott—the effects of which won’t be reported until third-quarter earnings. Organizers of the boycott have said they plan to expand the call for a halt on Facebook ads to Europe and are continuing to communicate with many advertisers in the U.S., who have opted to extend the pause past July.
Analysts have previously said they don’t expect the boycott to have any major effect on the company’s earnings. Facebook said that within the first three weeks of July, ads grew about 10% year over year, in line with second-quarter growth, and that it expects third quarter growth to be roughly similar to the July performance. Facebook also said headwinds for ad targeting and measurement to be increase due to regulations like the California Consumer Privacy Act and changes to mobile operating platforms, which the company said was “increasingly significant as the year progresses.”
Aho Williamson of eMarketer said calls the outlook “sobering” but “reflective of the uncertain state of the world’s economy.”
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