Facebook beats expectations but witnesses slow user growth for Q4

By : |February 2, 2018 0

Facebook reported strong fourth-quarter earnings and revenue on Wednesday despite the fact that users spent tens of millions of hours less with the social network each day.

Facebook reached $12.97 billion in revenue with $2.21 adjusted GAAP earnings per share if you don’t count a massive tax it had to pay on overseas cash that translated into a $0.77 reduction in EPS. Without that tax, it beat Wall Street’s estimates of $12.55 billion in revenue and $1.95 EPS.

But that’s not the complete picture. Facebook now has 1.4 billion daily users, up 2.18 percent compared to growing 3.8 percent to 1.37 billion users in Q3. That’s quite a slow down, and the lowest quarter-over-quarter percentage daily user growth ever reported by the company. Facebook’s US daily active users declined from 185 million to 184 million on a quarter-to-quarter basis — the first time the company has seen such a decline.



The company said it had made changes, including a crackdown on viral videos, that reduced the amount of time users spent on its social network by 50 million hours a day in the quarter, or 5 percent. “2017 was a strong year for Facebook, but it was also a hard one,” founder and CEO Mark Zuckerberg said in a release, glossing over myriad controversies the company has dealt with around fake news, metrics mistakes, and foreign entities meddling in elections during the year. “In 2018, we’re focused on making sure Facebook isn’t just fun to use, but also good for people’s well-being and for society.”

Shares at first fell as much as 4.5 percent after hours, but recovered after executives said that advertising prices increased, balancing out audience declines, and that they expected operating expenses guidance wouldn’t change, remaining at growth of 45 percent to 60 percent.

Facebook has also pledged to double its 10,000-person safety and security staff by end of 2018. These changes would all come on top of ongoing projects for the company, like investments in data centers to support more video, and an effort to limit the number of ads, or “ad load,” on the platform.

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