Facebook Shrugs Off Political and Regulatory Concerns, Posts Huge Q3 Earnings

Social network climbs to 1.65 billion daily active users

Facebook didn’t let regulatory and political controversies stop it from raking in a whole lot of cash during the third quarter, with the social network reporting Wednesday it easily topped Wall Street’s earnings expectations.

The company posted $2.12 earnings per share, equalling $6.1 billion in profit and surpassing analyst expectations of $1.91 EPS. Facebook also increased revenue 29% year-over-year to $17.7 billion, beating the $17.25 billion in sales analysts projected.

Daily active users hit 1.62 billion by the end of Q3, marking a 9% year-over-year increase. Facebook entered the quarter with 1.59 billion DAUs. Facebook’s monthly user base swelled to 2.45 billion, increasing 8% since the same time last year.

“We had a good quarter and our community and business continue to grow,” CEO Mark Zuckerberg said in a statement. “We are focused on making progress on major social issues and building new experiences that improve people’s lives around the world.”

Wall Street liked Facebook’s report at first blush, with the company’s shares increasing 3.5% in early after-hours trading to $194.26 per share.

After stagnant growth in the U.S. for much of 2018, Facebook’s domestic user base increased from 187 million to 189 million during Q3.

Early in Q3, Facebook reached a record-setting $5 billion settlement with the FTC  over the company’s mishandling of user data. The settlement followed several privacy issues that have hit the social network in the last two years — most notably its failure to alert up to 87 million users that their profile information had been accessed without consent by Cambridge Analytica, a political consulting firm.

As part of its settlement, Facebook will create a privacy oversight committee created with independent members. The members can only be fired by a supermajority of Facebook’s board, not by CEO Mark Zuckerberg alone. Zuckerberg and other newly appointed compliance officers must also submit to quarterly FTC check-ins; any false information shared could open Facebook up to additional fines and penalties, according to the FTC.

But privacy concerns have, for the most part, been sidelined in 2019. In its place, Facebook has recently faced major blowback over its decision to not fact-check political advertisements. A myriad of pundits and critics — including 2020 presidential hopeful Elizabeth Warren — have skewered the company’s stance.

Zuckerberg, meanwhile, has said Facebook users are better off deciding what is and isn’t true for themselves, rather than letting the company do it for them.

“As a principle,” Zuckerberg said during a speech at Georgetown University earlier this month, “in a democracy, I believe people should decide what is credible, not tech companies.”

The usual noise surrounding Facebook hasn’t made much of a dent on its stock price, however. Facebook shares have narrowly fluctuated between about $175 per share and $187 per share since mid-August. On the year, Facebook’s stock price had increased 37% heading into earnings on Wednesday afternoon.

On the product side, Facebook unveiled its latest slate of Portal smart displays during Q3. The Portal TV, costing $149 each, lets people use their TV display to video chat with their friends.

Facebook will hold a call at 2:00 p.m. PST to discuss its earnings.