Facebook’s revenue gained 33 percent in the third quarter, in spite of stagnation in the number of users in the US and Europe that indicates the toll taken by the social media giant’s recent privacy controversies.
Revenues were $13.73 billion (roughly Rs. 1 lakh crores), about $40 million shy of analyst expectations. Profit increased 9 percent to $5.14 billion. Facebook’s stock yo-yoed slightly in after-market trading on Tuesday. It has fallen more than 30% since July.
“Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day,” said chief executive Mark Zuckerberg, referencing Facebook-owned Instagram, WhatsApp, and Messenger apps in a press release. “We’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well.”
The company’s audience continued to stall in the US and in Europe. The company had 185 million daily users in the US and Canada, the same number as the two previous quarters. The company lost another million daily users in Europe, after losing three million in the previous quarter due to new privacy regulations that went into effect in the region.
The social network continued to see broad gains the rest of the world, upping the number of people who log in daily to 1.49 billion. The company does not break down user growth numbers for its other services including WhatsApp, Instagram, or Messenger.
A string of privacy controversies and new regulations are weighing on Facebook’s once-invincible finances. User growth has slowed after the Cambridge Analytica privacy scandal and a major data leak this year, in addition to faltering confidence in the company’s ability to handle misinformation. In late July, executives told investors to expect declining growth and revenues, in addition to rising costs associated with adapting to new European privacy rules and security investments. The projections sent shock waves through the market, causing Facebook value to fall by more than $100 billion, the largest single-day drop in Wall Street history.
Other tech stocks, including Amazon and Google, also saw declines this quarter – a worrisome sign that the high-flying technology industry may be coming down to earth, said Daniel Ives, Managing Director at Wedbush Securities.