Facebook Earnings (FB) Q2 2021

Facebook CEO Mark Zuckerberg walks to lunch after a session at the Allen & Company Sun Valley conference on July 8, 2021 in Sun Valley, Idaho.

Kevin Dietsch | fake images

Shares of Facebook fell as much as 5% in extended trading on Wednesday after the social media company called for revenue growth to slow over the next few quarters, even as second-quarter results were ahead of estimates.

Here’s how the company did it:

  • Profits: $ 3.61 per share, adjusted, versus $ 3.03 per share as analysts expected, according to Refinitiv.
  • Income: $ 29.08 billion, versus $ 27.89 billion as analysts expected, according to Refinitiv.
  • Daily Active Users (DAU): 1.91 billion, compared to 1.91 billion as analysts expected, according to StreetAccount.
  • Monthly Active Users (MAU): 2.90 billion, compared to the 291 billion that analysts expected, according to StreetAccount.
  • Average revenue per user (ARPU): $ 10.12, compared to $ 9.66 as analysts expected, according to StreetAccount.

Facebook’s revenue grew 56% year-on-year in the second quarter, according to a statement. It’s the fastest growth since 2016, accelerating from the 48% growth in the previous quarter. The company noted a 47% increase in the average price per ad, along with a 6% increase in the number of ads it delivered.

Revenue from Facebook’s Other segment, including consumer hardware like Oculus virtual reality headsets, totaled $ 497 million, up 36% from StreetAccount’s consensus estimate of $ 685.5 million.

The company’s free cash flow of $ 8.51 billion fell short of StreetAccount’s consensus of $ 9.08 billion.

Regarding guidance for the second half of the year, Facebook said it expects “year-over-year total revenue growth rates to slow significantly sequentially as we go through periods of increasingly stronger growth.” That effectively hasn’t changed from Facebook’s guidance three months earlier. Analysts surveyed by Refinitiv expected $ 28.22 billion in revenue for the third quarter, which implies growth of 31%.

Facebook said in the second quarter it had 3.51 billion monthly users in its family of apps, up from 3.45 billion in the first quarter. This metric is used to measure the total user base of Facebook in its main application, Instagram, Messenger and WhatsApp.

In the US and Canada, where Facebook generates more average revenue per user than other regions, the company reported 195 million daily active users, the same as in the first quarter. In Europe, the count decreased sequentially to 307 million from 309 million in the first quarter.

During a conference call with analysts, CEO Mark Zuckerberg spoke about the company’s goal to help develop the metaverse, which he described as “a virtual environment where you can be present with people in digital spaces.”

The comments came two days after Facebook announced the formation of a team that would work on metaverse.

“In the next few years, I hope that people will go from seeing us primarily as a social media company to seeing us as a meta-reverse company,” Zuckerberg said. Advertising will likely be a significant part of the metaverse, and Facebook’s goal will not be to sell devices at a very high price, he said. Zuckerberg’s vision for the metaverse requires a sense of presence in a virtual world, which is why the company is investing heavily in its Oculus division to build the necessary hardware. Zuckerberg said he believes Facebook will also be able to make money from the metaverse through the sale of digital goods and experiences.

Facebook said in Wednesday’s statement that it still expects “an increase in ad targeting headwinds in 2021 due to regulatory and platform changes, particularly recent iOS updates.” Snap and Twitter have overcome the challenges of Apple’s iOS 14.5 update, which gives people more control over which apps they want to track them, without much hassle. Both companies cautioned that the long-term impacts of iOS 14.5 are yet to be seen, but so far, early returns have been promising.

David Wehner, Facebook’s chief financial officer, said the company expects a greater impact from iOS 14.5 in the third quarter than in the second quarter. The degree of participation is in line with Facebook’s expectations, Wehner said.

“We are not fully implemented with those changes, but the third quarter will have more or less the impact of those implemented in a significant way,” he said.

Facebook also had some clashes with Washington during the quarter. A federal court dismissed a Federal Trade Commission antitrust lawsuit 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 Wednesday it will fight the court’s decision.

However, Facebook came under scrutiny from the Biden administration earlier this month when the Biden administration scolded the social media company for not doing enough to combat misinformation about its services that discourages people from taking. Covid-19 vaccines. At one point, President Joe Biden said they are “killing people” regarding disinformation on Facebook.

On the other hand, Facebook’s vice president of people, Lori Goler, said that the company will require that employees be vaccinated before entering its offices in the United States.

As of Wednesday’s close, Facebook shares were up 37% from the beginning of the year. The S&P 500 Index has risen 17% over the same period.

CLOCK: Facebook Doesn’t Appear To Be Able To Disrupt Snap Among Younger Demographics: Analyst

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