Facebook misses on Q3 revenue expectations, blames Apple’s ATT changes
Facebook’s latest financial report is in, and it looks like the company is doing surprisingly well considering the storm of bad press it has been receiving over the past several weeks. In fact, shares were up in after-hours trading, which means investors aren’t exactly worried about the social giant’s medium and long-term future.
For the three months ending in September, Facebook recorded revenues of $29 billion, which is a 35 percent year-over-year increase. Net income reached $9.19 billion, with earnings of $3.22 per diluted share. For reference, analysts were expecting revenues of $29.58 billion and earnings of $3.19 per diluted share.
Advertising revenue for the quarter was $28.28 billion, which is 33 percent higher compared to the same period last year. Facebook lumps all other revenue streams such as those from consumer hardware and developer fees into the “Other” category, which brought in $734 million in Q3, almost three times more than the same period last year.
Facebook also saw its daily active users metric grow to 1.93 billion on average for the month of September, which is a six percent increase compared to the same month in 2020. If we look at the bigger picture, daily active users across all Facebook products including Instagram, Facebook, WhatsApp, and Messenger averaged 2.91 billion as of last month — an 11 percent increase compared to last year. Monthly active users totaled 3.58 billion, which is a 12 percent year-over-year increase.
The company says Apple’s App Tracking Transparency changes in iOS and iPadOS 14.5 and later versions have already impacted financial performance, and that this impact will persist in the coming quarter.
For its next financial report, the company will break down revenue and operating profit into two segments — Family of Apps and Facebook Reality Labs. Facebook plans to dedicate significant resources towards the latter segment, so it has warned investors to expect a $10 billion reduction in the overall operating profit for 2021.
During the earnings call, Facebook CEO Mark Zuckerberg took a moment to express his view on the latest wave of scrutiny and criticism that hit Facebook. He noted that “good-faith criticism helps us get better. But my view is that what we’re seeing is a coordinated effort to selectively use the leaked documents to paint a false picture of our company. The reality is that we have an open culture, where we encourage discussion and research about our work so we can make progress on many complex issues that are not specific to just us.”
Take that as you may, but it looks like investors aren’t worried in the slightest about the stains on Facebook’s public image. In the meantime, the company says it will refocus its efforts toward serving younger users and building a metaverse. We’ve heard the company is also looking to change its name to reflect this renewed strategy, and will be adding 10,000 “high-skilled” jobs in the EU over the next five years to help develop VR and AR experiences.