Although Facebook's recent sales and earnings trend has benefited from some one-time events, it has long been helping to ease the fears that have increased in recent months. The user statistics and earnings reporting also show no disadvantages.
Facebook reported first quarter revenue of $ 11.97 billion (up 49% annually) and GAAP earnings per share of $ 1.69, according to consensus estimates of $ 11.41 billion Dollars and 1.35 US dollars. The company also announced that it has increased its share repurchase authorization by $ 9 billion; An $ 6 billion authorization introduced in 2016 was almost completely used up in the first quarter following the $ 1
Shares rose 7.3% to $ 171.40 in trading after close of trading. With concerns about the impact of the Cambridge Analytica scandal, Facebook weighed 18% on its earnings after peaking at $ 195.32 in early February, just after the company released a solid Q4 report.
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Here's some key information from Facebook's report and call:
- While the Cambridge scandal came too late to significantly influence Facebook's first quarter sales, there were concerns that changes to the newsfeed algorithm which would encourage social interaction and reduce the passive consumption of brand / publisher content would be a high fee, as Facebook has warned that these changes could affect its use in the short term. Such worries are exaggerated: ad sales were up 50% a year in constant currencies and 43% in constant currencies, up 48% in US dollars and 44% in Q4.
- Remarkably, Facebook's ad impressions grew 8% annually despite news feed changes; That's better than the 4% growth recorded in the 4th quarter. CFO Dave Wehner noted that Instagram's growth in Instagram is driving growth in impressions, as well as the fact that the decline in PC advertising is less important. Facebook's average price per ad, which benefits from limited supply growth and strong advertisers delivering Facebook campaigns using the company's powerful targeting and measurement tools, rose 39% in the first quarter, up 43% in the fourth quarter users (MAU) and daily active users (DAUs) both rose 13% per year in the first quarter, reaching a level of $ 2.2 billion and $ 1.45 billion, respectively. This was more or less in line with expectations and better than many had feared after the turmoil of Cambridge Analytica. After a sequential decline of 1 million in Q4, North American DAUs increased 1 million to 185 million in the first quarter. That's heartening, considering that North America still accounts for 47% of Facebook's revenue and (as readers undoubtedly know) has provided Facebook with a lot of negative press in recent months.
- Wehner and COO earnings reporting Sheryl Sandberg suggests Facebook Do not expect any massive impact on Cambridge Analytica's worldwide usage or revenue or the arrival of new EU data collection rules (DSGVO) in May. However, Wehner warned that Facebook expects European MAUs and DAUs to be flat to slightly behind one another as a result of the GDPR, and that there is "potential for some impact" on increasing sales as Facebook targets DSPR privacy controls globally. Both Wehner and Sandberg were very excited that the DSGVO rules are generally applicable to the online advertising industry and that they are aware of how Facebook is positioned to compete on arrival.
- As mentioned earlier, first quarter revenue was boosted strongly by currency fluctuations. They also benefited from a change in accounting related to the revenue from Facebook's Instant Article ad with $ 130 million in revenue. EPS benefited from share buybacks and lower-than-expected tax rates (11%). Facebook had previously set a tax rate of 308 million euros and confirmed the forecast for this call.
- Facebook has raised its spending forecast again: it now expects GAAP costs and expenses to increase by 50% to 60% in 2018. and $ 15 billion total investment (up sharply from $ 6.7 billion a year ago). Previous guidance has provided for cost / expenditure growth of 35% to 50% and capital expenditures of $ 14-15 billion. Cost / spending increased 39% per year in the first quarter and capital expenditures more than doubled to $ 2.8 billion. Facebook is hardly alone among cloud giants in making huge capital investments.
- Although Instagram Stories has received more attention, CEO Mark Zuckerberg has stated that WhatsApp status is now "by far" the most popular Snapchat Stories clone. In November, Zuck announced that both Instagram stories and WhatsApp status had exceeded 300 million DAUs. Currently, ads are running against the former but not the last one.
- Instagram, which is pretty immune after the Cambridge Analytica Fallout (brand-wise), still seems to be doing very well. Wehner said that Instagram "continues to grow well from both the corporate and engagement perspectives." Zuckerberg has announced that more than 200 million people are using the Instagram Explore tab and over 100 million are using the hashtag feature launched in December. He added that Instagram Stories and the Instagram Direct messaging service are "still growing incredibly fast."
- Zuckerberg and Sandberg both proposed that Facebook's business model will remain very ad-centric, and other services, such as payments, will offer paid businesses with the goal of adding value to Facebook ads. Sandberg also noted that currently only 6 million of the 80 million Facebook Facebook users are advertisers. And on Instagram, only 2 million of the 25 million Instagram Instagram-enabled businesses currently advertise on the platform.
- Sandberg has suggested that Facebook still cautiously deals with the monetization of Messenger, which has recently been advertising. But once again, she sounded very optimistic about long-term revenue potential, pointing out that over 18 million companies use the platform to connect with customers. Zuckerberg has since announced that more than 3 million people use the recently launched WhatsApp Business App. Any aggressive attempt to monetize Facebook's giant messaging platforms, each of which now has well over 1 billion MAU, could have a major impact on revenue growth over the coming years.
Eric Jhonsa of TheStreet previously reported on the Facebook earnings report and call for  live blog .