If you pay any attention to tech news, you’ve probably seen relentless criticism of Facebook’s handling of COVID-19 disinformation recently, as well as a barrage of negative headlines related to a new book on the company called An ugly truth.
These headlines typically paint a portrait of a tech giant who is at odds with users, advertisers, lawmakers, and their peers in Silicon Valley. But as the world’s largest social network showed on Wednesday, the reality of her company’s performance couldn’t be more opposite.
Facebook said its revenue increased 56% in the second quarter to $ 29 billion, meaning it grew faster during the period than Apple or Microsoft. Even more impressively, its profit rose 101% to $ 10.4 billion. Daily users on Facebook, Instagram and WhatsApp increased 12% from the same period last year to 2.76 billion. Non-advertising revenue, namely sales of the Oculus Quest VR headset, grew at a more modest rate of 36%. And Apple’s new ad tracking prompt for iPhone apps didn’t significantly hurt ad revenue as some expected, although Facebook said the worst was yet to come.
In prepared remarks to investors, Facebook CFO David Wehner said he expected revenue growth to “slow down considerably” in the second half of this year, mainly due to a momentary increase in use last year during pandemic lockdowns. He also cited “regulatory and platform changes, including recent iOS updates” from Apple.
Facebook’s share price has climbed 39% since the start of this year, but the warning of slower growth ahead has scared investors, causing its stock to fall by about 3%.
The digital advertising industry is booming after the pandemic, as previous earnings reports from Snap and Google have shown. As the second largest player after Google, Facebook is expected to benefit from more online advertising dollars, even if its targeting capabilities are hampered by Apple in the short term.
A sign of Facebook’s growing strength is the price it charges advertisers for serving ads to users, as this system is run through an auction that raises prices alongside growing demand. Facebook’s average price per ad rose 47% from the same period last year in the second quarter, and CFO Wehner said the company expects higher ad rates to be higher. the main driver of revenue growth for the remainder of the year.