Facebook Earnings – What Investors Need to Know
Facebook shares fell on Tuesday following the company’s second-quarter earnings report. While Wall Street analysts were generally pleased with the company’s performance, many analysts were skeptical about its growth prospects. However, Zuckerberg’s comments in the second-quarter call may be a sign of things to come. Here’s what investors need to know about the company’s future. Read on to learn more about its financial performance.
Facebook’s share price is rising. That’s good news for the company. It means that people are paying attention to the company’s quarterly earnings reports. The social networking giant has struggled to attract a younger audience, which is the key to growing its business. But the company’s growth has been fueled by advertising, which is the most important metric to measure the health of the site. So, what should investors pay attention to?
The company is experimenting with different revenue streams, including advertising, and has a new ad product called Facebook Reality Labs. The new division focuses on virtual and augmented reality, as well as hardware. The rest of Facebook’s revenue will come from the family of apps – its main app and other applications such as Instagram and Messenger. The company also expects to make $10 billion in operating profits in 2021.
Facebook’s growth is primarily driven by advertising revenue. The company’s revenue from ads increased by 156% year over year, which is the fastest growth since 2016. In the second quarter, the company generated $497 million in “Other” revenue, which includes products such as virtual reality headsets and Oculus. The company also said it will buy up to $25 billion in stock to fund its new ventures.
The company’s earnings are a sign that it is doing well. While Facebook shares have been in a decline for a few years now, the numbers still look good for the company. That’s good news for investors, as long as they’re aware of its business model and can afford to take the necessary steps to grow. Face it, Facebook shares are a lot cheaper today than they were in 2012. But while the news isn’t all bad, it’s always a good sign.
Facebook’s ad revenue was down by almost 10%. Despite the disappointing results, Facebook continues to grow. In the second quarter, the company has doubled its revenue since its 2012 IPO. Meanwhile, it now has more than 10 million advertisers. And it continues to grow at a record pace. Its growth is the result of a variety of factors, including the increasing size of the U.S. economy and changing demographics.
The second-quarter earnings report came after Facebook CEO Mark Zuckerberg testified before a House Antitrust Subcommittee. He was questioned about the company’s policies and its plans for the next quarter. But he defended the company’s policies and urged shareholders to consider the company’s performance. While the company’s revenue grew moderately, its free cash flow fell short of StreetAccount’s consensus estimate of $9.9 billion.
While Facebook’s overall revenue growth is slowing, its “Other” revenue grew by 156% compared to last year. The company’s Oculus virtual reality headsets and Portal video-chatting devices are proving to be a lucrative investment. While these products are largely limited in scope, Zuckerberg has touted them as evidence of the company’s growth. But he did miss on the average number of users, which has increased by about half since 2012.
Despite the negative news on the company’s second-quarter earnings, Facebook’s outlook remains positive. The company’s core business remains advertising, with average revenue per user exceeding $1.40 billion in the first quarter of 2018. Furthermore, Facebook is making big moves to diversify its business model. By focusing on its core business, the company’s revenue will be boosted by more advertising and marketing. With this, the company will have a stronger financial foundation than ever before.
The company’s “Other” revenue was $732 million for the quarter. This was up 146% from last year. Its “Other” revenue includes sales of its Oculus virtual reality headsets and Portal video-chatting devices. In addition to this, Facebook’s “Other” revenue is set to grow to $249 million in the fourth quarter. Those items may be the key to the company’s continued growth.
