Facebook's business and user growth remained strong amid the coronavirus pandemic as the social media giant reported its second-quarter financial results, which lifted its stock price in after-market trading.
On Thursday, the social media giant, led by CEO Mark Zuckerberg, said revenue was up 11 percent to $18.69 billion and it earned $1.80 a share, up 98 percent year-on-year, as it unveiled its latest quarterly financials after the market close.
Facebook was expected to report quarterly earnings of $1.39 a share and revenue of $17.4 billion, according to market data firm Refinitiv.
"We're glad to be able to provide small businesses the tools they need to grow and be successful online during these challenging times. And we're proud that people can rely on our services to stay connected when they can't always be together in person," Zuckerberg said in a statement.
Advertising revenue was up 10 percent to $18.32 billion, while revenue from payments and other fees was $366 million, up 40 percent from last year. The social network has faced an advertising recession in the broader economy as well as an advertiser backlash over how it moderates offensive content, including hate speech, on its platform.
Facebook COO Sheryl Sandberg on an analyst call said small and medium-sized businesses on which the social network relies on for advertising revenue were struggling during the pandemic. "But at the same time, businesses have to pivot online," she added as the migration to more personalized advertising to reach consumers is key to Facebook's future.
Investors will be measuring Facebook's active user metrics to judge its balance sheet health. The company reported 1.79 billion daily active users worldwide at the end the second quarter, up from 1.73 billion at the end of the first quarter. That marked another beat as financial data firm FactSet had predicted DAUs to fall slightly to 1.7 billion during the latest quarter.
Facebook said its user base in North America rose to 198 million DAUs in the latest quarter, compared to 195 million users at the end of the first quarter. The DAU base in Europe was unchanged quarter to quarter at 305 million.
Facebook also posted 699 million DAUs in the Asia-Pacific region for the second quarter, against 678 million in the first quarter. The monthly active users came in at 2.7 billion, a slight beat on an analyst forecast of 2.63 billion. The social network had 2.6 billion MAUs at the end of the first quarter.
While Facebook is a beneficiary of pandemic lockdown orders at its users sheltered in place during the second quarter, the company pointed to a return to more constant user growth as its worldwide markets begin to open up post-pandemic.
“More recently, we are seeing signs of normalization in user growth and engagement as shelter in-place measures have eased around the world, particularly in developed markets where Facebook’s penetration is higher,” Facebook said in the statement.
The latest second-quarter performance comes as Facebook has faced increased scrutiny from government regulators and politicians in Washington, D.C.
On Wednesday, Zuckerberg appeared before a House of Representatives antitrust subcommittee where he fielded questions about acquisitions over the years and fended off claims about the social media giant's predatory practices.
A day later on the analyst call, Zuckerberg defended his social network against claims that Facebook is dominated by divisive political debate or misinformation. And he said the pandemic would continue to keep a majority of Facebook employees working remotely.
"I expect the rest of the year to continue to be unpredictable... It's incredibly disappointing because it seems like the U.S. could have avoided this current surge in cases if our governments had handled this better," the Facebook boss told analysts.
His comments came in the run-up to the 2020 presidential election, where Facebook is a popular social media platform for candidates to reach potential voters. Zuckerberg pointed to efforts to reduce voter suppression by stepping up efforts to remove "false information" from the Facebook site.
Sandberg also addressed the major advertiser boycott of Facebook by insisting her social network agreed with its aims. "We completely agree that we don't want hate on our platform," she argued, as Facebook pointed to working with civil rights and industry groups to root out offending content.
Facebook stock was up 6 percent to $247.60 in after-market trading.
3:30 p.m. Updated with comments by Facebook execs made during an analyst call.