Facebook released its first quarter results earlier this week, on May 3rd. As expected by most, the social media giant company revealed a solid first semester, with the actual results being even better than anticipated. Still, the company also issued a warning as it decided to change its tactics in the ad segment.
Facebook’s First Quarter Revenue Rose to a $8.03 Billion Value
Facebook reported a $.03 billion revenue for the 2017 quarter ended on March 31st. This marks a 49 percent increase when compared to the same period last year. In 2016, the company presented a $5.38 billion revenue for the year’s Q1. The current value topped market expectation, which averaged around a $7.83 billion sum. This is also the eight, straight time that the company’s revenues beat expectation.
Overall, the company posted a profit of $1.04 per share or $3.06 billion in total. This marks a 76 percent increase when compared to 2016’s Q1 profit of $1.74 billion or about $0.52 per share. The earnings call value topped market estimates by about $0.87 a share.
Analysts are also estimated and were expecting a non-GAAP earnings reports. However, Facebook announced that it would no longer be releasing this income or earnings-per-share value.
Besides its earnings increase, the company also released its expenses growth. These rose by 40 percent when compared to the same period last year. Facebook’s costs now reach $4.71 billion.
“We had a strong first quarter and a great start to the year,” said Sheryl Sandberg. Facebook’s CEO released this statement during the company’s conference call with its investors.
Facebook’s user growth over the first quarter was also strong. When put year-to-year, this increased by 17 percent. Currently, the social media platform numbers 1.94 billion active monthly users. The daily number of active users marked a 19 percent rise as it now includes 1.28 billion people.
The user activity on Facebook-owned applications also continued to rise. Both Messenger and WhatsApp now have over 1.2 billion monthly active accounts. Instagram numbers over 700 million active users on a monthly basis.
Facebook Will Put A Stop To Its Ads Segment Increase
Still, despite the better than expected results, Facebook also released a warning. Issued during the conference call, this targeted the ads segment. The company stated that there’s a limited number of ads it can show before it starts driving users away.
As such, Facebook decided to stop increasing its marketing spots for its news feed. This decision will start being applied later in 2017. The company also presented its financial expectations stemming from this decision. Facebook is looking towards a “meaningful” lowering of its revenue growth as it will stop increasing its ads segment.
The first effects of this decision were felt immediately after the announcement. The company shares fell to $151.68 during Wednesday’s regular trading. Still, Facebook’s stock rose by around 32 percent this year.
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