Facebook reported monthly active users (MAUs) up 7.3% at 2.9 billion for the quarter ended in June. The figure was in line with expectations but reflected slowing growth, knocking shares down 4% in late trading.
The social media giant said total revenue of $29.08 billion rose 56%. Net profit jumped 101% to $10.39 billion, or $3.61 a share. Both figures repped a Wall Street beat on the wings of higher digital ad revenue that has marked tech sector earnings this week and last — but it was less pronounced at Facebook than at others like Twitter, Snap, Google and even Spotify.
“We had a strong quarter as we continue to help businesses grow and people stay connected,” said CEO Mark Zuckerberg. “I’m excited to see our major initiatives around creators and community, commerce, and building the next computing platform coming together to start to bring the vision of the metaverse to life.”
Daily active users, or DAUs, were 1.91 billion on average for the quarter, an increase of 7% year-over-year.
Advertising revenue growth was driven by a 47% year-over-year increase in the average price per ad and a 6% increase in the number of ads delivered, the company said. Price increases will continue to be what moves ad sales during the rest of 2021. That alarmed some, indicating the company may be running out room to deliver ads to users.
The company warned that revenue will “decelerate significantly” on a sequential basis in the second half as the Covid-19 recovery continues. It also anticipates increased ad targeting headwinds in 2021 from regulatory and platform changes — notably the recent iOS updates, which we expect to have a greater impact in the third quarter compared to the second quarter. The new app tracking transparency initiative by Apple that went into effect in April forces users to opt-in to Facebook tracking outside of the app.
Facebook estimated total expenses in the range of $70-73 billion, unchanged from early estimates. It’s investing heavily in VR and AR and this week announced plans to create a product team to work on what it calls a “metaverse,” using virtual technology to create digital worlds that multiple people can inhabit at the same time.
Regulatory issues abound but the company did catch a break last month after federal court last dismissed two lawsuits. The FTC and a group of 45 states accused the social media giant of stifling competition and asked the court to force it to unwind the 2012 and 2014 acquisitions of Instagram and WhatsApp.
Judge James Boasberg of U.S. District Court for the District of Columbia ruled that the FTC’s anti-trust complaint against the social networking giant was legally insufficient, and the states’ case was too old.
Zuckerberg will host a call at 5 pm ET to talk about the numbers and outlook.