Facebook reported its 2017 second quarter earnings today. Here’s what you need to know:
- Facebook reported GAAP earnings per share of $1.32 on revenue of $9.32 billion, up 45 percent year-over-year. Analysts expected earnings per share of $1.11 on revenue of $9.2 billion. (Note: Facebook no longer reports non-GAAP expenses, income, tax rate, and earnings per share)
- Facebook has now exceeded earnings expectations in 20 of its 21 reports since going public in 2012. It is also the seventh straight quarter of Facebook growing revenue by more than 45 percent year-over-year, though revenue growth overall is declining.
Facebook's Q2 Revenue:
2017: $9.3 billion
2016: $6.4 billion
2015: $4.0 billion
2014: $2.9 billion
2013: $1.8 billion
2012: $1.2 billion— Jon Erlichman (@JonErlichman) July 26, 2017
Just talked to Facebook CFO Dave Wehner, who modestly notes facebook's big first half. Continues to warn that ad growth will drop in 2017.
— ಠ_ಠ (@MikeIsaac) July 26, 2017
CFO Wehner is warning again that revenue growth is going to slow, and that new efforts like Messenger won't make up for it yet. $FB
— Sarah Frier (@sarahfrier) July 26, 2017
Fb revenue growth is in fact declining as it runs out of News Feed Space.
Q2 45%
Q1 49%
Q4 51% (2016)
Q3 56%
Q2 59%https://t.co/4LOYKwDngd— Josh Constine (@JoshConstine) July 26, 2017
A "slowdown" in revenue growth at Facebook means only 45% growth.
— Shira Ovide (@ShiraOvide) July 26, 2017
- Facebook now has 2 billion monthly users. That’s up 17 percent year-over-year. The company has 1.32 billion daily active users, also up 17 percent. Both numbers were in line with analyst expectations.
What's driving the results? It's "really based on increased engagement" Sheryl Sandberg tells me and @emilychangtv
— Sarah Frier (@sarahfrier) July 26, 2017
- Shares went down immediately after the markets closed, but came back up and are now up 1 percent in after-hours trading. Shares are up more than 35 percent in the last year.
- Facebook’s mobile business continues to grow. Mobile advertising revenue, which came in at $7.9 billion, now accounts for 87 percent of Facebook’s overall revenue, up from 84 percent a year ago. Total revenue from advertising came in at $9.16 billion, up 47 percent year-over-year.
- Employee growth: Facebook added 1,888 employees last quarter. Total headcount is up to 20,658, up 43 percent from this time last year.
- Zuck: “We had a good second quarter and first half of the year,” Facebook CEO Mark Zuckerberg said in a statement. “Our community is now two billion people and we’re focusing on bringing the world closer together.”
Update:
On the company’s earnings call, it revealed that there are now 1 billion daily active users on WhatsApp and 250 million daily users on the app’s Snapchat Stories clone.
Instagram Stories and WhatsApp Stories both now more than 250 million daily users, per Zuck $FB
— Alex Kantrowitz (@Kantrowitz) July 26, 2017
There were also many questions about Facebook’s plan to monetize Messenger.
“We will be slow and deliberate,” Facebook COO Sheryl Sandberg said. “We’re always looking at the long run. We do not manage this company quarter to quarter.”
FB taking a ton of questions about Messenger ads, which seem to be a key focus now. Investors like the idea. Stock climbing during the call. pic.twitter.com/zzU5fBToUs
— Kurt Wagner (@KurtWagner8) July 26, 2017
$FB CFO says Messenger, unlike Instagram, isn't a product that revolves around a feed, so there are more unknowns about how ads will play.
— Jessica Guynn (@jguynn) July 26, 2017
Zuckerberg says he thinks that video will be a bigger driver of the business than messaging, which is part of a longer term plan.
— Queenie Wong (@QWongSJ) July 26, 2017
Other takeaways from the call:
When you listen @sherylsandberg talk Facebook & Instagram ad targeting, hard to understand why $70 bn still spent on TV ads #goodluckTV $FB
— Rich Greenfield (@RichBTIG) July 26, 2017
CFO David Wehner says ppl may spend less time in the newsfeed as they watch more videos on Facebook.
— Janko Roettgers (@jank0) July 26, 2017