Facebook beat analyst expectations on its third quarter earnings on Wednesday, reporting a massive 47 percent jump in revenue year-over-year behind continued mobile ad strength, as the world’s biggest social network swelled to 2.07 billion monthly users and continued pulling in ad dollars.
The social network posted revenue of $10.33 billion and earnings of $1.59 cents a share for the three months ended Sept. 30 — easily running past Wall Street estimates. Analysts anticipated Facebook would report $9.84 billion in sales and earnings of $1.28 cents a share.
The cash haul represented a 47 percent jump in revenue year-over-year — giving the Menlo Park, Calif.-based company its 10th straight quarterly revenue beat. Profits followed suit, soaring 79 percent year-over-year.
CEO Mark Zuckerberg credited the company’s growth in a statement about the impressive quarter, but hinted at lingering fallout from Russian trolls using the platform during the 2016 U.S. election.
“Our community continues to grow and our business is doing well,” said Zuckerberg. “But none of that matters if our services are used in ways that don’t bring people closer together. We’re serious about preventing abuse on our platforms. We’re investing so much in security that it will impact our profitability. Protecting our community is more important than maximizing our profits.”
Facebook hit a new all-time high of about $186 in early after-hours trading.
As usual, it was an eventful quarter for the world’s biggest social media company.
Facebook has been mired in controversy in recent months, as more details continue to trickle out on how Russian trolls leveraged the platform to spread disinformation during the 2016 election. Making matters worse in the public’s eye, Facebook has changed its assessment of the damage on a routine basis — saying 10 million accounts were vulnerable to pro-Kremlin content. Then 126 million. And then, hours before its quarterly earnings, 146 million. To combat the spread of misinformation, the company announced last week it’ll add a “paid for by” tag to its political ads ahead of the 2018 midterm elections.
At the same time, its business has been clicking on all cylinders.
The company continued gobbling up users around the world, moving from 2.01 to 2.07 billion users during the third quarter — a 16 percent year-over-year increase. After posting a 17 percent increase in user growth last quarter, Facebook has settled into a quarterly double-digit improvement rate.
Advertisements continue to be the name of the game for Facebook, as the company forms a duopoly with Google; more than 80 percent of all new online ad dollars funnel towards the two companies. Facebook continues to dominate mobile ads, with 88 percent of the company’s ad dollars stemming from mobile.
Instagram, its popular photo-sharing app, crossed the 800 million monthly active user threshold in September. Its daily use continued to swell, too, with 500 million DAUs. Facebook’s $1 billion acquisition of the company in 2012 continues to look like one of the great business coups of the past decade, providing the advertising behemoth another platform to offer its clients.
Another vehicle to run ads against: Facebook’s Watch, its new original content tab launched in August. Facebook aimed for shows 30-minutes-and-under, and partnered with hundreds of outlets to load Watch with full stable. Watch hasn’t generated much buzz, at least for now, but with the company planning on spending $1 billion on content, its angling to become a streaming powerhouse in its own right.
And as long as Facebook continues to rake in the ad revenue, Wall Street hasn’t cared about its fake news problem. Facebook’s stock slowly crept up 7 percent in the past three months, with shares touching an all-time high of about $182.50 as markets closed on Wednesday.
The company will hold a conference call to discuss its earnings at 5 p.m. PT.