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Facebook Tops Forecasts - Revenue Rises 48%

April 29, 2021

Facebook reported financial results for the quarter ended March 31, 2021. The firm had respective EPS and revenue of $3.30 per share and $26.17 billion. Expectations were  $2.37 per share and  $23.67 billion.

Daily active users (DAUs) were 1.88 billion with 1.89 billion forecast. Monthly active users (MAUs) came in at 2.85 billion against. 2.86 billion which was expected. Average revenue per user (ARPU) landed at $9.27 with only $8.40 anticipated.

 

"We had a strong quarter as we helped people stay connected and businesses grow," said Mark Zuckerberg, Facebook founder and CEO. "We will continue to invest aggressively to deliver new and meaningful experiences for years to come, including in newer areas like augmented and virtual reality, commerce, and the creator economy."

Dave Wehner,  chief financial officer of Facebook added, "We are pleased with the strength of our advertising revenue growth in the first quarter of 2021, which was driven by a 30% year-over-year increase in the average price per ad and a 12% increase in the number of ads delivered. We expect that advertising revenue growth will continue to be primarily driven by price during the rest of 2021.

We expect second quarter 2021 year-over-year total revenue growth to remain stable or modestly accelerate relative to the growth rate in the first quarter of 2021 as we lap slower growth related to the pandemic during the second quarter of 2020. In the third and fourth quarters of 2021, we expect year-over-year total revenue growth rates to significantly decelerate sequentially as we lap periods of increasingly strong growth. We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recently-launched iOS 14.5 update, which we expect to begin having an impact in the second quarter. This is factored into our outlook.

There is also continuing uncertainty around the viability of transatlantic data transfers in light of recent European regulatory developments, and like companies across a wide range of industries, we are closely monitoring the potential impact on our European operations as these developments progress.

We expect 2021 total expenses to be in the range of $70-73 billion, updated from our prior outlook of $68-73 billion. The year-over-year growth in expenses is driven by investments in technical and product talent, infrastructure, and consumer hardware-related costs. We remain committed to investing for long-term growth and our expense outlook reflects the underlying strength of our business and the compelling investment opportunities we see across our products, including consumer hardware.

We expect 2021 capital expenditures to be in the range of $19-21 billion, down from our prior estimate of $21-23 billion. Our capital expenditures are driven primarily by our investments in data centers, servers, network infrastructure, and office facilities."

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