Facebook had another strong quarter, beating estimates to start 2017. It scored $8.03 billion in revenue and $1.04 GAAP actual EPS in Q1 compared to $0.87 EPS estimate. It earned that from 1.94 billion users, up from 1.86 billion last quarter, growing at a faster 4.3 percent compared to 3.91 perecent last quarter.
The world’s largest social network continued to grow its audience during the first quarter, coming just shy of the 2 billion mark with 1.93 billion users.
Facebook beat analyst estimates on revenue, which were $7.83 billion. Facebook had closed the market down with 0.68 percent at $151.80. Shares dropped 2.37 percent in after-hours trading. Though reports show that running out of News Feed ad space hasn’t prevented Facebook from continuing to grow its revenue.
Shares of Facebook were down roughly 2% in after hours trading, despite the solid results.
Here are the key numbers from Facebook’s Q1:
- EPS (GAAP): $1.04 vs. $0.87 expected, up 73% from the year-ago period.
- Revenue: $8.03 billion vs. $7.83 billion expected, up 49% from the year-ago period.
- Monthly active users: 1.94 billion, up from 1.86 billion last quarter.
- Daily active users: 1.28 billion, up from 1.23 billion last quarter.
The biggest story of the quarter was Facebook’s on-going struggles to fight fake news and offensive content. It’s begun working with outside fact checkers, hired a former New York Times product manager to run news product, made banned content reporting easier, announced to hire 3000 people to speed up vetting of flagged content and the deletion of 30,000 Facebook accounts. Yet even that controversy hasn’t seemed to slow down the social juggernaut.
In conclusion, all eyes are on what Facebook has cautioned to be a “meaningful” slowdown in revenue growth this year as it reaches the limit of the number of ads it can show in the News Feed. Luckily, the company is starting to ramp up with Instagram and video ads, which I see as two key growth drivers.
