It was a “decent quarter, all things considered,” said eMarketer social media analyst Debra Aho Williamson. But the fact that revenue was flat in the first three weeks of April suggests that the second quarter will be much more challenging than the first, she added.
Facebook said it earned $4.9 billion, or $1.71 per share, in the January-March quarter. That’s more than double the $2.43 billion, or 85 cents per share, it reported in the same period a year earlier. Revenue rose 18% to $17.74 billion from $15.08 billion.
Analysts polled by FactSet were expecting higher earnings of $1.74 per share and lower revenue of $17.34 billion.
Facebook had warned last month that its business was already being squeezed by the advertising downturn even though usage of its services has risen. In countries hard-hit by the pandemic, it said messaging traffic was up 50% while voice and video calling had doubled, but added that it doesn’t make money on many of those services and that ad business had “weakened” in those regions.
Even before the pandemic slowed the global advertising market, Facebook reported its slowest revenue growth rate in history in the fourth quarter of 2019. And the company warned that further a slowdown is coming. This was not unexpected — the bigger Facebook gets, the harder it is for it to keep growing like a startup.
Facebook had 2.6 billion monthly users on average in March, up 10% compared to a year earlier. Its daily user base during the month grew 11% to an average of 1.73 billion.
The company said 2.99 billion people used at least one of its apps — Facebook, Instagram, Messenger or WhatsApp — at least once a month in March. That’s up 11% from a year ago.
Facebook’s stock shot up more than 10.4% to $214.31 in after-hours trading following release of its results.