Social networking giant Facebook records fastest growth since 2016, but warns annual revenue growth will slow “significantly”
Facebook has posted another stunning set of quarterly financial results, despite facing increased regulatory scrutiny and challenges to its advertising revenue base.
Facebook’s results revealed that its advertising revenue (which makes up most of Facebook’s revenues) had grown 47 percent year-over-year in the average price per ad, and a 6 percent increase in the number of ads delivered.
But Facebook chief financial officer (CFO) David Wehner has warned the company expects year-over-year revenue growth to slow “significantly”, as an increase in digital ad sales related to the Covid-19 recovery, slows back down.
Its shares fell as much as 5 percent in after-hours trading.
For the second quarter ending 30 June, Facebook posted a net profit up a staggering 101 percent at $10.4 billion, compared to a net profit of $5.2 billion in the same period a year ago.
There was also a big increase in revenues, which rose 56 percent to $29 billion (advertising accounted for $28.6bn of this), from $18.7bn in the same year ago quarter.
“We had a strong quarter as we continue to help businesses grow and people stay connected,” said Mark Zuckerberg, Facebook founder and CEO. “I’m excited to see our major initiatives around creators and community, commerce, and building the next computing platform coming together to start to bring the vision of the metaverse to life.”
Facebook also offered its usual statistics, with daily active users (DAUs) of 1.9 billion on average for June, an increase of 7 percent year-over-year.
Facebook monthly active users (MAUs) meanwhile sat at 2.9 billion as of 30 June, an increase of 7 percent year-over-year.
The social networking said its headcount number was 63,404, an increase of 21 percent year-over-year.
Despite the stunning financial results, Facebook is facing a number of significant challenges going forward.
The US administration is targetting Facebook, and other online platforms, as it seeks to stem the spread of misinformation about Covid-19 vaccines amidst renewed pandemic pressures.
Earlier this month President Biden commented that Facebook was “killing people” due to Covid misinformation, but backtracked last week to put the focus on a dozen users held responsible for spreading two-thirds of the fabrications in question.
Facebook has also had to deal with a number of investigations over its handling of users’ personal information, on both sides of the pond.
In April, the the Irish Data Protection Commission (DPC) began an investigation because it believes the firm may have breached one or more laws, after a massive data set of about 533 million Facebook users was posted on a hacker forum.
And then there is the challenge posed to Facebook’s vital advertising revenue stream, from Apple’s new privacy controls it introduced in April this year with iOS 14.5.
That iOS version require apps to ask for permission to track a person’s activity online.
If an app is launched on a device running iOS 14.5, an “App Tracking Transparency” (ATT) label should display and ask the user whether they agree to let the app track them across other companies’ apps and websites.
Essentially, this ‘nutrition label’ will explain to the user just what the app will do with their personal data.
Consumers who opt-out of the tracking will likely see fewer relevant adverts, and it will make it harder for firms such as Facebook to target adverts at users.
The firm is taking some counter measures.
Last month Facebook began testing adverts in its Oculus Quest virtual reality headsets, in spite of an earlier claim that it would never do so.