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Facebook hit 2.91 billion monthly active users last quarter, up 6% from the year earlier, and reported mixed financial results and a revenue outlook for the current fourth quarter that was below expectations.
Revenue of $29 billion for the September quarter was up 35% from the year before but below Wall Street estimates. Earnings per share of $3.22 — up 19% — were a beat.
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“We made good progress this quarter and our community continues to grow,” said CEO Mark Zuckerberg. “I’m excited about our roadmap, especially around creators, commerce, and helping to build the metaverse.”
The company acknowledged a hit from Appl’s new iOS privacy feature that allows iPhone users to opt out of receiving targeted advertising. Specifically it requires app users to actively opt-in to being tracked across other apps and websites, which helps advertisers deliver more targeted adds. The change introduced last summer has thrown the digital ad market for a loop, with Snap the first out last week to report a bigger-than-expected hit in its quarterly results.
But investors may have expected worse. Shares, which closed up 1.26% today, popped another 3.3% in late trading.
DAUs were 1.93 billion on average, also an increase of 6% year-over-year.
It expects fourth-quarter revenue to be in a range of $31.5 billion to $34 billion — below forecasts.
“Our outlook reflects the significant uncertainty we face in the fourth quarter in light of continued headwinds from Apple’s iOS 14 changes, and macroeconomic and COVID-related factors. In addition, we expect non-ads revenue to be down year-over-year in the fourth quarter as we lap the strong launch of Quest 2 during last year’s holiday shopping season,” the company said.
Facebook has been rebranding itself through its focus on VR and AR as a so-called “Metaverse” company with stories out recently that it plans to change its corporate name to reflect that. No word on that or on the negative press of late that’s been roiling the company. Zuckerberg is holding a conference call with investors at 5 pm ET.
Facebook did say that starting next quarter we plan to break out Facebook Reality Labs, which houses augmented and virtual reality products and services, as a separate reporting segment. The other segment will be called Family of Apps, including Facebook, Instagram, Messenger, WhatsApp and other services.
Facebook expects its investment in Facebook Reality Labs to reduce overall operating profit in 2021 by approximately $10 billion. “We are committed to bringing this long-term vision to life and we expect to increase our investments for the next several years,” the company said.
The social media giant has been engulfed in a storm of bad press jumpstarted by a whistleblower and a series of recent WSJ exposes called The Facebook Files — followed by a thrashing in other leading publications for its dangerous impact on young people, public discourse, politics and more. The whistleblower, Frances Haugen, testified on Capitol Hill earlier this month and took questions from lawmakers in the U.K. today, describing company’s inability to self-monitor.
The nub of multiple reports is how FB’s own internal data showed harm. Haugen says its absolutely within the company’s ability to take steps to address problems it but has repeatedly put use engagement and profit over the public good.
The newest load of leaked documents described decisions swayed by political considerations and company higher ups ignoring calls from employees to clean things up. The company announced its earnings after market close. Shares are up 1.3% in late trading.