Facebook earnings growth slows

31 OCT 2018

Facebook’s Q3 earnings reflected an earlier prediction revenue growth would slow in the second half of 2018, though net income during the period appeared unscathed by recent problems involving fake news and data breaches.

Net profit of $5.1 billion was up from $4.7 billion in Q3 2017, with total revenue of $13.7 billion some 33 per cent higher. However, the rate of growth was considerably lower than the 79 per cent annual increase in profit between Q3 2016 and 2017, or the 47 per cent hike in revenue over that period.

In the recent quarter, mobile advertising revenue grew 40 per cent year-on-year to $12.5 billion and, as in the past, was by far the biggest contributor to total revenue (92 per cent).

ARPU rose 20 per cent, which Bloomberg noted was “impressive for most companies, but the slowest rate for Facebook since 2013.”

Daily active users in September averaged 1.49 billion, up 9 per cent, led by growth in India, Indonesia and the Philippines.

On an earnings call, CEO Mark Zuckerberg (pictured) noted Facebook may be close to saturation in developed countries but is continuing to grow quickly in developing countries.

He said there are now “more than 2.6 billion people using Facebook, WhatsApp, Instagram or Messenger each month, up from around 2.5 billion last quarter. But now, on average, more than 2 billion people use at least one of our services every day”.

Problem areas
Zuckerberg acknowledged some problem areas for the company: for example while video is “growing dramatically across the ecosystem” and Watch, a new video initiative, is growing quickly, the company continues to lag YouTube in terms of consumer adoption.

In messaging, Apple remains its biggest competitor, particularly in the US. Zuckerberg also highlighted Stories, a popular feature on Instagram, is not catching on with core Facebook users.

Zuckerberg stated Facebook is partnering closely with governments and experts to improve security: “This quarter alone, we’ve found and taken down foreign influence campaigns from Russia and Iran attempting to interfere in the US, UK, Middle East and elsewhere, as well as groups in Brazil that have been active in their own country.”

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Saleha Riaz

Saleha joined Mobile World Live in October 2014 as a reporter and works across all e-newsletters - creating content, writing blogs and reports as well as conducting feature interviews...More

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