Facebook First Quarter Revenue Up Whopping 49 Percent Despite Recent Scandals

(AP Photo/Andrew Harnik)

In spite of Facebook’s election-related scandals, the unauthorized sharing of Facebook’s personal data by Cambridge Analytica, and Mark Zuckerberg’s evasive testimony before Congress, the company’s financial conditions remain strong and robust.

Based on its quarterly earnings, released last Wednesday, earnings per share were up 63 percent to $1.69 from a year earlier, 34 cents higher than the analysts’ forecasts. In addition, its daily and monthly active users worldwide reached 1.45 billion and 2.20 billion respectively, representing a 13 percent increase compared to a year earlier.

But, it’s still possible that these latest scandals may have some effect on growth over the next quarter. Daniel Ives, head technology research analyst for GBH Insights, noted that the next earnings result may better reflect how seriously the scandal has affected their business. Facebook’s daily active users in the U.S. and Canada reached 185 million in the latest quarter, restoring the 1 million fewer users in the fourth quarter due to changes Facebook made in the content it presents in its user feed.

Facebook’s first-quarter revenue of  $11.97 billion exceeded the market forecasts by about 5 percent and its revenues for this past quarter increased 49 percent over the same period last year. More advertising revenue than ever came from mobile devices, 91 percent compared to 85 percent last year. Zuckerberg noted in the conference call reporting these earnings,  “As you know, we have important issues to address. 2018 is a year of important investments. We are taking a broader view of our responsibilities. We also need to keep moving forward.” In addressing the recent election scandal, Facebook noted that it had removed more than 270 accounts and pages tied to the Russian-based disinformation company Internet Research Agency.

In related news, Cambridge Analytica filed for bankruptcy today, but according to the Wall Street Journalthe principals have already formed a new company, Emerdata, located at the same address and with the same employees, including the former CEO who had been fired from Cambridge Analytica.

Here is the summary of Facebook’s latest quarter

  • Daily active users (DAUs)– DAUs were 1.45 billion on average for March 2018 , an increase of 13% year-over-year.
  • Monthly active users (MAUs)– MAUs were 2.20 billion as of March 31, 2018, an increase of 13% year-over-year.
  • Mobile advertising revenue– Mobile advertising revenue represented approximately 91% of advertising revenue for the first quarter of 2018, up from approximately 85% of advertising revenue in the first quarter of 2017.
  • Capital expenditures– Capital expenditures for the first quarter of 2018 were $2.81 billion.
  • Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $43.96 billion at the end of the first quarter of 2018.
  • Headcount– Headcount was 27,742 as of March 31, 2018, an increase of 48% year-over-year.