Facebook, Inc. (NASDAQ: FB) reported its second quarter financial results after the market close on Wednesday. The tech giant topped analysts’ estimates in both earnings and revenue. Despite the beat, Facebook remained flat at the opening bell on Friday.
For the second quarter, Facebook reported earnings of USD 1.99 per share on revenue of USD 16.88 Billion. Refinitiv analysts expected earnings of USD 1.88 per share on revenue of USD 16.5 Billion.
Facebook stronger-than-expected quarter was driven by its steady growth in daily and monthly active users. At the end of the quarter, the Company reported 1.59 billion daily active users (DAU) and 2.41 billion monthly active users (MAU). Both daily and monthly users increased by 8% year-over-year. Daily and monthly active users numbers fell in-line with analysts’ estimates.
Average revenue per user (ARPU) was USD 7.05 for the quarter, surpassing FactSet analysts’ estimates of USD 6.87.
In total, Facebook said it now estimates more than 2.1 billion people now use Facebook, Instagram, Whatsapp, or Messenger every day on average. Moreover, Facebook believes that more than 2.7 billion people use at least one of its Family of services each month.
The growth in users led to higher advertising revenues, increasing Facebook’s total revenue by 28% year-over-year. Advertising accounts for basically the entirety of Facebook’s revenue. At the end of the quarter, the Company reported advertising revenues of USD 16.62 Billion.
On Wednesday, Facebook settled with the Federal Trade Commission regarding the 2018 Cambridge Analytica scandal. Facebook ended up paying a USD 5 Billion penalty after 87 million users informations were wrongly accessed.
Moreover, in June, Facebook was informed that the FTC had opened an antitrust investigation against the Company. Additionally, in July, the Department of Justice announced that it will begin an antitrust review of market-leading online platforms.
“We believe that there needs to be a regulatory framework in place,” said Facebook Chief Executive Officer Mark Zuckerberg on the call with analysts after the report. “My broader concern is that if that doesn’t get put in place, then frustration with the industry I think will continue to grow.”
Following the Cambridge Analytica scandal, Zuckerberg has made it a matter to protect users’ privacy on the social media platform. Facebook said in its earnings release that it plans to implement an expansion if its privacy program, including substantial management and board of directors oversight, stringent operational requirements and reporting obligations, and a process to certify its compliance with the privacy program to the FTC.