Facebook Inc. (NASDAQ: FB) announced its fourth quarter and full year financial results for fiscal year 2017. Facebook beat analysts’ estimates, but shares were sent down lower during Thursday’s afterhours after CEO Mark Zuckerberg had said time usage had dropped.
For the fourth quarter, Facebook reported revenue of $12.97 billion, increasing 47 percent year over year, and beating analysts’ estimates of $12.55. Facebook reported an EPS of $2.21, beating analysts’ estimates of $1.95.
Facebook reported $12.78 billion in advertising revenue, increasing 48 percent year over year. Mobile advertising revenue represented 89 percent of net advertising revenue.
Daily actives users were 1.4 billion on average by the end of the quarter, increasing 14 percent year over year. Monthly active users were 2.13 billion by the end of the quarter, increasing 14 year over year. Average user count fell in line with analysts’ estimates.
"2017 was a strong year for Facebook, but it was also a hard one," said Zuckerberg.
Although Facebook had reported upbeat fourth quarter and full year earnings, share fell after hours on Thursday after Zuckerberg had announced that time spent on Facebook fell roughly by 50 million hours everyday.
Facebook began to crack down on many advertising content on its platform especially after its Russian meddling scandal. Facebook’s crackdown on advertisement has led to decline in user usage.
The tech giant also announced on Monday its move to ban all virtual currency related advertisements on its platforms due to the risk of nature associated with its users.
Facebook shares recovered 3 percent on Thursday morning after Zuckerberg had reassured investors that the decline in usage will not affect profitability of the company.
“I want to be clear: The most important driver of our business has never been time spent by itself. It’s the quality of the conversations and connections,” Chief Executive Mark Zuckerberg said on the call.
Since the Russian ad scandal, Facebook has heavily increased its security workforce and even asked users to report any suspicious activity on the platform. The company is trying weed out “fake news” to make the social media site into a better environment.
“By focusing on meaningful connections, our community and business will be stronger over the long term." said Zuckerberg in the earnings call.
Although Facebook has begun to crackdown on its advertisements, Chief Operating Officer Sheryl Sandberg says the changes could create new monetization opportunities.