Facebook earnings beat but the company warns of impact from Apple privacy changes


Facebook stock was up in after-hours trading on Wednesday after the company reported its fourth-quarter earnings. The company warned the looming changes in Apple’s iOS 14 and a reversal in pandemic trends could hurt its advertising business.

Here are the numbers:

  • Earnings: $3.88 per share vs $3.22 per share forecast by Refinitiv
  • Revenue: $28.07 billion vs $26.44 billion forecast by Refinitiv
  • Daily active users (DAUs): 1.84 billion vs 1.83 billion forecast by FactSet
  • Monthly active users (MAUs): 2.8 billion vs 2.76 billion forecast by FactSet
  • Average revenue per user (ARPU): $10.14 vs $9.49 forecast by FactSet

Facebook CEO Mark Zuckerberg said that the company is now considering steps to reduce the amount of political content that users see in their News Feed. This announcement comes in the wake of the insurrection at the U.S. Capitol on Jan. 6.

“One of the top pieces of feedback that we’re hearing from our community right now is that people don’t want politics and fighting to take over their experience on our services,” Zuckerberg said.

Additionally, Zuckerberg announced that Facebook plans to permanently stop recommending civic and political groups to users around the world. This comes after the company temporarily decided to stop recommending these groups to U.S. users in October in the lead up to the 2020 U.S. elections. 

“This is a continuation of work we’ve been doing for a while to turn down the temperature and discourage divisive conversations,” Zuckerberg said.

The company said that it benefited in 2020 by a shift toward online commerce and products during the pandemic. Facebook warned that these trends may moderate or reverse and “could serve as a headwind to our advertising revenue growth.”

The company also warned Apple’s privacy changes in iOS 14, which could impact Facebook’s ability to target ads, could start to affect its business late in the first quarter.

Zuckerberg said Facebook increasingly views Apple as one of its biggest competitors.

“Apple may say they’re doing this to help people, but the moves clearly track their competitive interests,” Zuckerberg said. “This dynamic is important for people to understand because we and others are going to be up against this for the foreseeable future.”

In the U.S. and Canada, Facebook’s user base fell to 195 million daily active users from 196 million a quarter earlier. This is the second quarter in a row that the company lost users in the U.S. and Canada. 

Its user base in Europe increased to 308 million daily active users, its first growth in the region after three quarters at 305 million.

Facebook said it counts 3.30 billion monthly users across its family of apps, compared to 3.21 billion in the previous quarter. This metric is used to measure Facebook’s total user base across its main app, Instagram, Messenger and WhatsApp.

Facebook’s “Other” revenue came in at $885 million for the quarter, up 156% compared to last year. That accounted for more than 3% of Facebook’s revenue in the quarter. This includes sales of Oculus virtual reality headsets and the Portal video-chatting devices. Sales grew as people have been stuck at home looking for entertainment and ways to keep in touch with loved ones during the pandemic. 

Facebook Chief Financial officer David Wehner attributed the uptick in “Other” revenue to strong holiday sales of the Oculus Quest 2 virtual-reality headset.

The company announced a repurchase of up to an additional $25 billion of Facebook stock.

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