Facebook's latest earnings report isn't reason for concern

[Shawn Knight]

The big picture: Facebook's share value is down more than seven percent on news that daily and monthly active user counts are down slightly in the US and Canada compared to last quarter. Really, it's much to do about nothing - a reflection of the pandemic, not a sign that people are quitting the social network.

Facebook during the third quarter of 2020 brought in $21.47 billion in revenue, topping Wall Street expectations of just $19.8 billion. This translated to earnings per share of $2.71, which was again higher than the $1.91 forecast from Refinitiv (via CNBC).

Perhaps more interesting than the financials are the user numbers.

Facebook said monthly active users (MAUs) reached 2.74 billion during the three-month period ending September 30, an increase of 12 percent compared to the same period a year earlier. Drilling down deeper, we find that daily active users (DAUs) were 1.82 billion on average during the quarter. That’s also up 12 percent year-over-year.

Zooming out to include Facebook’s entire family of platforms (Facebook, Messenger, Instagram and WhatsApp), monthly active people (MAP) was 3.21 billion at the end of the period, up 14 percent YoY. Daily active people (DAP), meanwhile, hit an average of 2.54 billion, a 15 percent increase compared to Q3 2019.

Worth mentioning is the fact that DAUs and MAUs in the US and Canada were down slightly from Q2, which Facebook said is related to the impact of the pandemic. The trend is expected to continue in the fourth quarter, with DAUs and MAUs being flat or slightly down compared to the third quarter.

Image credit: AlesiaKan, Jirapong Manustrong

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https://www.techspot.com/news/87384-facebook-latest-earnings-report-isnt-reason-concern.html

 

[Endymio]

" Really, it's much to do about nothing..."

Much ado, perhaps? And I disagree that this is merely a to-be expected reflection of the pandemic. One naturally assumes that lockdowns and working-from-home would translate into more screen time, not less. The fact that the opposite is occurring leads me to believe that, once the lockdowns end, people will be spending even less time on Facebook, not more.

 

[mbrowne5061]

1. Considering every internet service seemed to see their active users increase during Covid, facebook's decrease in North America cannot be realistically attributed to that, both without better sources.
2. "Is not reason for concern" is more from an investor perspective, not a 'normal human' one. Pretty much everyone should be advocating for the decline of these networks, or the very least, their extensive regulation (to the point where they're regulated like phone and cable companies). So I suppose you're right, just not in the way you intended - these lower user counts are cause for celebration, nor are they a cause for concern.