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Facebook Crushes Q1 Revenue Goal, Races Toward $1 Trillion Market Value

The social network’s stock pops 5% after reporting $26.2 billion in first-quarter sales

Facebook on Wednesday topped Wall Street’s Q1 sales and earnings estimates when it shared its first-quarter financial report, helping push the company’s share price 5% higher in after-hours trading. The stock market bump puts Facebook within striking distance of becoming the next trillion-dollar tech giant.

Facebook reported earnings per share of $3.30, coming in well above the $2.37 EPS analysts had projected. The company also posted its second-best quarter ever in terms of sales, reporting $26.2 billion in revenue; analysts had expected 23.7 billion in Q1 sales. Facebook’s Q1 sales increased 48% from the same time last year. Net income of $9.5 billion was nearly double the $4.9 billion the company reported in Q1 2020.

The company also reported 1.88 billion daily users, up 8% year-over-year. Monthly active users increased 10% year-over-year to 2.85 billion overall. Facebook reported flat growth in the U.S. and Canada, where it has 195 million users. Facebook also said 2.72 billion people use at least one of its apps – which includes Instagram, Messenger and WhatsApp – on a daily basis.

Daily user growth, via Facebook’s earnings slides

The company’s share price jumped 5% in early after-market trading, pushing Facebook to $322 per share. If those gains hold Thursday, Facebook would hit a new all-time high on Wall Street. That jump also means Facebook is now worth about $915 billion, pushing it closer to being the next tech titan valued at $1 trillion. (The other tech companies in the $1 trillion club include Apple, Amazon, and Alphabet, Google’s parent company.)

“We had a strong quarter as we helped people stay connected and businesses grow,” Facebook CEO Mark Zuckerberg said in a statement. “We will continue to invest aggressively to deliver new and meaningful experiences for years to come, including in newer areas like augmented and virtual reality, commerce, and the creator economy.”

Back in January, Facebook spooked some investors when CFO David Wehner said the company would face “significant uncertainty” in 2021. In particular, Wehner warned changes to the iPhone’s operating system and the “evolving regulatory landscape” could negatively impact Facebook’s ad business. Those fears didn’t come to fruition, at least between January and March, but Wehner on Wednesday warned the company expects Q3 and Q4 revenue growth to “significantly decelerate as we lap periods of increasingly strong growth.” (Q2 is expected to “remain stable or modestly accelerate.)

He added: “We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recently launched iOS 14.5 update, which we expect to begin having an impact in the second quarter. This is factored into our outlook.”

Facebook will hold a video call to discuss its Q1 report at 2 p.m. PT.