Facebook’s stock dropped around 7% in after-market trading after announcing financial results that, while strong, highlighted slowing growth and mounting costs for the company.
On Wednesday, the social networking giant released Q4 2019 results, which came in above analysts‘ expectations for both revenue and profits. It netted d $21.08 billion in revenue in the last quarter, and also posted fractionally better-than-expected profits of $2.56 in earnings per share (GAAP).
Still, its share price slid downwards from recent all-time highs, as profit and revenue growth both showed decelleration, and expenditure at the firm continued to grow.
Wall Street had been broadly expecting a strong quarter from Facebook. The company has been beset by scandals for years, but that has done little to impede its blockbuster profits. Still, threats continue to loom on the horizon for the company, including the risk of antitrust action and ongoing scrutiny of its content moderation practices.
Here are the key numbers, as well as what Wall Street was expecting:
- Revenue: $21.08 billion, up 25% year-on-year ($20.89 billion predicted)
- Earnings Per Share (EPS) GAAP: $2.56, up 8% year-on-year ($2.53 predicted)
- Monthly Active Users: 2.5 billion, up 8% year-on-year (2.49 billion predicted)
- Daily Active Users: 1.66 billion, up 9% year-on-year (1.65 billion predicted)
Facebook’s net income growth is slowing markedly – up only 6% in Q4 2019 year-on-year, compared to 61% growth in Q4 2018. Revenue growth, too, was at 25%, down from previous years.
„Facebook stock has had a huge run and investors were hoping for even faster growth, especially in the US – bottom line more a function of the recent run up than fundamental issues with the print itself,“ Rich Greenfield, partner at LightShed Partners, said.
Facebook’s expenses also grew markedly in 2019, up 51% across the entire year to $46.7 billion, up from $30.9 billion the year prior. In the same space of time, revenues grew by 27%, to $70.7 billion. (Expense growth has been outpacing revenue growth for several years at Facebook, however.)
Before markets closed on Wednesday, Facebook’s stock had been hovering around $223 – above recent all-time closing high of $222.14 on January 17, 2020.
Business Insider is covering Facebook’s Q4 2019 results live. Refresh this page for updates.
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January 30, 2020 at 05:30AM
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