For its third quarter results Facebook beat analysts profit prediction. However, it missed its monthly user targets and expects safety and security upgrades will drive up costs in the future.
The mixed results saw Facebook share prices seesaw before closing up 2.9 per cent at $US146.22.
In Q3 Facebook profit rose to US$1.76 a share, higher than analysts expected, according to Bloomberg. The social media giant’s income from operations was US$5.78 billion, up 13 per cent compared to the same period last year.
The company’s total revenue rose 33 per cent year on year to US$13.7 billion.
- Leadership Webinar: Which-50’s 2019 Outlook and Business Transformation Drivers webinar is set for November 27. Register today!
Slow growth and challenges ahead
However, Reuters reports this is its slowest revenue growth in six years. On a conference call with analysts, Facebook chief Mark Zuckerberg forecasted that revenue and cost growth will be out of sync for “some time” because of changes in user behaviour. He also said he expects more costs as the company fortifies its safety and security provisions.
“The upcoming elections will be a real test of the protections we’ve put in place,” Zuckerberg said. “With a community of more than 2 billion people, we will see all the good and bad that humanity can do. And we will never be perfect.”
Facebook is still reeling from the Cambridge Analytica scandal earlier this year, however, despite all the backlash it is gaining users.
Its daily active users were at 1.49 billion an increase of 9 per cent year-over-year and its monthly active users were at 2.27 billion an increase of 10 per cent to the prior year.
Analysts expected its monthly users to be at 2.28 billion.
In a letter to the investors, Zuckerberg said, “Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day.
“We’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well.”
Currently, the social media company share price is up 2.91 per cent at US$146.22.
A bright future
Yuval Ben-Itzhak, CEO, Socialbakers said despite the mixed results, this shows marketers that no other platform comes close to Facebook and its apps, in terms of scale and audience engagement.
He said, “With 2.27 billion monthly active users, it is still the platform where most consumer engagement with brands is happening online.
“It is also no surprise that private messaging and stories are the current growth drivers for the business. With the increased desire for privacy, users are looking more and more towards services like Messenger and WhatsApp to interact with brands and organisations in a safe and convenient way.
“With Facebook focusing its investment on the biggest opportunities for advertisers, video, communities and messaging, it’s hard to imagine that its future as the leading advertising powerhouse looks anything other than bright.”
The full report can be viewed here.