Facebook revenue jumps 33% to $13.73 billion in Q3 2018, but growth continues to slow
After reporting lower-than-expected growth last quarter, Facebook once again slightly missed Wall Street expectations on monthly active users, daily active users, and revenue in its Q3 2018 earnings report.
Facebook reported 2.27 billion monthly active users and 1.49 billion daily active users this quarter, below an expected 2.29 billion and 1.51 billion.
Last quarter, those numbers were 2.23 billion and 1.47 billion, respectively. That also translates to a 1.63 percent growth rate quarter-over-quarter in DAUs — one of the company’s slowest ever quarter-over-quarter growth rates.
Revenue for Q3 was $13.73 billion, up 33 percent from Q3 2017. Refinitiv predicted revenue would come in at $13.78 billion after surveying Wall Street analysts.
Net income swelled to $5.14 billion, up 9 percent year-over-year.
“Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day,” CEO Mark Zuckerberg said in a press release. “We’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well.”
Facebook cautioned during its Q2 earnings call that it expected revenue growth to slow in the second half of the year. CFO Dave Wehner cited increased investments in security, giving users more choices around data privacy, as well as the increased promotion of Stories, where ads cost less than Facebook’s traditional bread and butter, News Feed.
Facebook also reported this quarter that 2.6 billion people use one of its “Family of Apps” each month (Facebook, Instagram, Messenger, and WhatsApp). Last quarter, that number was 2.5 billion. For the first time, Facebook gave a DAU number for its Family of Apps category, which comes in at more than 2 billion.
It’s also worth noting that for the second straight quarter, Facebook lost 1 million MAUs in Europe, now down to 375 million. This comes after the implementation of GDPR, which Facebook warned might affect its user numbers in Europe.
In a conference call with analysts, Zuckerberg tried to reassure Wall Street that Facebook was well-positioned to adapt to forthcoming trends, thanks to increased user interest in Stories, sharing via private messages, and increased video consumption.
Zuckerberg admitted that Facebook Stories got off to a slower-than-expected start compared to WhatsApp or Instagram Stories. According to the last publicly released statistics, Facebook Stories had 300 million DAUs, compared to 400 million DAUs on Instagram. He also said that IGTV and Facebook Watch are still “well behind YouTube, which is our primary competitor in this space, but they’re growing quickly.”
Wehner said the company expected its revenue growth rate to decelerate in the fourth quarter, due to a few factors, most notably that more of the company’s growth is coming from product services and geographies that don’t monetize as quickly as Facebook’s products historically have.
Source: VentureBeat
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