Facebook Q3 Revenue Rose 35% YoY, Despite Controversies
Facebook Inc (NASDAQ:FB) maintains a good relationship with investors despite the multiple scandals the company has faced in recent months. Revenue in the third quarter was up 35% from a...
Facebook Inc (NASDAQ:FB) maintains a good relationship with investors despite the multiple scandals the company has faced in recent months. Revenue in the third quarter was up 35% from a year prior, with the company expecting Q4 revenue of $34 billion.
Regarding net income, the company also had a higher growth margin than last year, as it reported a growth of 17%, compared to the same period in 2020, which translated into 9.2 billion dollars. However, even though its earnings remained positive, the number of active unique users was not promoted.
As reported by CNBC, “The company said it’s adding $50 billion to its stock buyback program, helping lift the shares about 2% in extended trading.”
According to the report, Facebook hit 196 million daily active users, compared to 195 million in the second quarter. In Europe, the increase reached 308 million compared to 307 million in the same period –lower than in previous quarters.
Another takeaway after the report’s disclosure is the company’s internal moves after the next quarter: Reality Labs –an upcoming business front– will see a $10 billion investment, and will focus on developing hardware, virtual reality, and augmented reality products as Facebook is betting hard on the technology with its metaverse.
The company also estimated that it will have lower profits next quarter, due to the new Apple Inc (NASDAQ:AAPL) policies, which have already affected some companies such as Snap.
The whistleblower’s recent revelations have put the relationship between Facebook and younger users in dire terms. The Facebook Papers –the series of internal documents released to the press– have brought to light how the number of adolescent users has decreased by 13% since 2019.
In addition, the expectation for users between 20 and 30 years also showed a decrease of 4%. This caused a general decline in daily users in the company's advertising market, since the younger the consumers, the less time on average they interact with the platform.
"The problem of aging is real" on Facebook, according to one of the company's internal reports cited by The Verge, where company researchers said that should fewer teenagers choose Facebook as they grow older, the company would face a more “severe” decrease in young users than already projected.
Facebook is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.