Facebook’s revenue climbs 18% in the first quarter

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Apr 30, 2020
  • Facebook beats analysts' estimate for revenue in Q1 but falls shy on the earnings front.
  • CEO Mark Zuckerberg says Facebook has £48.24 billion in cash and cash equivalents.
  • Facebook made an alliance in India last month with a £4.56 billion investment in Reliance Jio.

Facebook Inc. (NASDAQ: FB) released an upbeat financial report for the first quarter on Wednesday that sent its stock up roughly 10% in extended trading. Last month, Facebook said its ad revenue took a massive hit due to the Coronavirus pandemic. On Wednesday, however, the company injected optimism citing stability in ad revenue in April.

According to Refinitiv, experts had forecast Facebook to print £13.93 billion in revenue in Q1. Their estimate for earnings per share (EPS) was capped at £1.40 per share. In its financial report on Wednesday, Facebook topped the estimate for revenue posting £14.20 billion (18% annualized increase) in the recent quarter but fell short on earnings noting £1.37 per share.

Other noticeable figures in Facebook’s Q1 report

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Facebook said its total monthly users (on all of its apps) increased from 2.89 billion to 2.99 billion in the first quarter. The world’s largest social network posted 195 million DAU (daily active users) in the United States and Canada in Q1 versus 190 million in the previous quarter. In Europe, the company’s user base climbed from 294 million DAU in Q4 to 305 million in the recent quarter.

Facebook’s ARPU (average revenue per user) printed at £5.56 per share in the first quarter. “Other” revenue including Oculus and Portal printed at £238 million in Q1 that marks an 80% increase as compared to the same quarter last year.

On the livestreams front, CEO Mark Zuckerberg announced 800 million DAU on Facebook and Instagram combined.

Facebook also highlighted on Wednesday that its capital expenditures will now be reduced to £11.20 billion to £12.80 billion this year. Originally the company was set to spend £13.60 billion to £15.20 billion in 2020. The cost cut was attributed to the Coronavirus restrictions that weighed on Facebook’s construction efforts. Capital expenditures, as per Facebook, are likely to recover in 2021.

Facebook has £48.24 billion in cash and cash equivalents

Zuckerberg also expressed confidence in the company’s £48.24 billion cash and cash equivalents. The CEO, however, warns that the economic blow from COVID-19 is expected to last longer than originally anticipated.

In India, Facebook recently made a £4.56 billion investment in Reliance Jio.

At £172 per share, Facebook is currently around 2.5% up year to date in the stock market. Its performance last year was reported largely upbeat with an annual gain of roughly 50%. Facebook is currently valued at £443 billion and has a price to earnings ratio of 30.21.

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