On Wednesday, Facebook reported its second-quarter results which surpassed the expectations of analysts.
The tech giant reported earnings of $3.61 per share beating analysts’ expectations of $3.03 per share, according to Refinitiv. Revenue for the quarter stood at $29.08 billion beating the $27.89 billion that analysts expected.
The figure for Daily active users (DAUs) was on par with analysts’ expectations of 1.91 billion, according to StreetAccount. Monthly active users (MAUs), on the other hand, fell short of analysts’ expectations. The company reported 2.90 billion Monthly Active Users (MAUs), analysts expectations stood at 2.91 billion, according to StreetAccount.
Revenue growth was up by 56 percent YoY, making it the company’s fastest growth since 2016. Revenue growth in the last quarter was 48 percent. Revenue from the ‘Others’ category which embodies revenue from consumer hardware such as Oculus virtual-reality headsets, totaled $497 million. The figure is up 36% from the previous quarter and failed to beat StreetAccount consensus of $685.5 million.
According to Facebook, across its family of apps – Instagram, Messenger, and WhatsApp, it had 3.51 billion Monthly Active Users (MAUs). The figure is up from 3.45 billion in the first quarter.
Facebook’s ad business is a point of interest for analysts and shareholders as Apple‘s recently released iOS 14.5 might be a hurdle to advertising for companies such as Facebook. The update allows iPhone and iPad users to limit companies from tracking their device’s activity, thereby making it difficult and even almost impossible for companies like Facebook to target users with personalized ads. The update, therefore, gives Apple users control over apps that want to track them.
Already, Snap and Twitter have navigated the challenges of Apple’s iOS 14.5 update. Snap saw huge growth in its ads wing irrespective of concerns around potential Apple iOS privacy changes and how it might be affected by it. According to what the company said, it was not affected by the privacy changes that came with Apple’s iOS 14.5, and the reason behind Snap not being affected by the changes, according to what Snap executive Jeremi Gorman said, was that iOS users were being slow to update their devices to iOS 14.5 and Snap was observing “higher opt-in rates than we are seeing reported generally across the industry, which we believe is due in part to the trust our community has in our products and our business.”
Like other big tech companies, Facebook has been faced with antitrust probes. In the second quarter, it had a brush with Washington. A federal court dismissed an antitrust complaint from the Federal Trade Commission against the company, along with a separate case brought by 48 state attorneys general. The FTC has until Aug. 19 to change its complaint, and the group of states said on Wednesday that it will fight the court’s decision. Earlier this month, Facebook came under the scrutiny of the Biden administration which accused it of not doing enough to combat misinformation on its platform that discourages people from taking Covid-19 vaccines.
The company’s shares fell 5 percent extended trading on Wednesday after it announced its results and as of Wednesday’s close, its shares were up 37% compared to the beginning of the year. The S&P 500 index has risen 17% over the same period.