Facebook Easily Tops Forecasts
July 31, 2020
Facebook reported financial results for the quarter ended June 30, 2020.
The firm's earnings came in at $1.80
with only $1.39 expected. As to revenue, Facebook reported $18.7 billion
with Wall Street only looking for $17.4 billion.
On the Daily active users (DAUs)
front, the tech giant had 1.79 billion with investors looking for 1.7
billion. Similarly, Facebook's Monthly active users (MAUs) were 2.7
billion which was better than the 2.6 billion forecast. Lastly, Average
revenue per user (ARPU) was $7.05 which was higher than $6.76 forecast.
"We're glad to be able to provide small businesses the tools they need
to grow and be successful online during these challenging times," said
Mark Zuckerberg, Facebook founder and CEO. "And we're proud that people
can rely on our services to stay connected when they can't always be
together in person."
Quarter 2020 Operational and Other Financial Highlights
- Facebook daily
active users (DAUs) – DAUs were 1.79 billion on average for June
2020, an increase of 12% year-over-year.
- Facebook monthly
active users (MAUs) – MAUs were 2.70 billion as of June 30,
2020, an increase of 12% year-over-year.
- Family daily
active people (DAP) – DAP was 2.47 billion on average for June
2020, an increase of 15% year-over-year.
- Family monthly
active people (MAP) – MAP was 3.14 billion as of June 30, 2020,
an increase of 14% year-over-year.
expenditures – Capital expenditures, including principal
payments on finance leases, were $3.36 billion for the second
quarter of 2020.
- Cash and cash
equivalents and marketable securities – Cash and cash
equivalents and marketable securities were $58.24 billion as of
June 30, 2020. On July 7, 2020, we paid approximately $5.8
billion at the then–current exchange rate for our investment in
Jio Platforms Limited.
- Headcount –
Headcount was 52,534 as of June 30, 2020, an increase of 32%
Impact of COVID-19 on
Our business has been
impacted by the COVID-19 pandemic and, like all companies, we are
facing a period of unprecedented uncertainty in our business
outlook. We expect our business performance will be impacted by
issues beyond our control, including the duration and efficacy of
shelter-in-place orders, the effectiveness of economic stimuli
around the world, and the fluctuations of currencies relative to the
- Engagement -
Facebook DAUs and MAUs in the second quarter of 2020
reflect increased engagement as people around the world
sheltered in place and used our products to connect with the
people and organizations they care about. More recently, we are
seeing signs of normalization in user growth and engagement as
shelter-in-place measures have eased around the world,
particularly in developed markets where Facebook's penetration
is higher. Looking forward, as shelter-in-place restrictions
continue to ease, we expect the number of Facebook DAUs and MAUs
to be flat or slightly down in most regions in the third quarter
of 2020 compared to the second quarter of 2020.
- Revenue - In the
first three weeks of July, our year-over-year ad revenue growth
rate was approximately in-line with our second quarter 2020
year-over-year ad revenue growth rate of 10%. We expect our full
quarter year-over-year ad revenue growth rate for the third
quarter of 2020 will be roughly similar to this July
performance. There are several factors contributing to this
continued macroeconomic uncertainty, including the pace of
recovery and the prospects for additional economic stimulus;
- Second, our
expectation that some of the recent surge in community
engagement will normalize as regions reopen;
- Third, the
impact from certain advertisers pausing spend on our
platforms related to the current boycott, which is reflected
in our July trends; and
headwinds related to ad targeting and measurement, including
the impact of regulation, such as the California Consumer
Privacy Act, as well as headwinds from expected changes to
mobile operating platforms, which we anticipate will be
increasingly significant as the year progresses.
- Total expenses -
We expect total expenses in 2020 to be in the range of $52-55
billion, narrowed slightly from the prior range of $52-56
expenditures - We expect full-year 2020 capital expenditures to
be approximately $16 billion, at the high end of our prior
$14-16 billion range, as we have resumed data center
construction efforts earlier than expected. However, a great
deal of uncertainty remains in our outlook, and our full year
capital expenditures will depend on how the pandemic impacts our
ability to construct data centers and refresh equipment.
- Tax rates
- We expect our full-year 2020 tax rate to be in the mid-teens,
although we may see fluctuations in our quarterly rate depending
on our financial results.