Facebook Inc.'s message to investors is clear: the business is healthy and growing.
In its first quarter earnings report, the social network said that revenues increased 49 percent, surpassing analysts' estimates, such as the advertising business loaded in advance. While Facebook is spending to solve big problems such as electoral manipulation and privacy, problems that have hit the company's image, "we are going to invest even more in building the experiences that unite people on Facebook, first of all , "CEO Mark Zuckerberg said in a conference call Wednesday.
Facebook shares rose 6.3 percent to $ 169.83 at 5:25 a.m. before the market in New York on Thursday. The stock has fallen 14 percent since the new reports on data privacy lapses appeared in March.
In the call, the executives used the word "proud" five times. "We are proud of the ad model we build," said operations director Sheryl Sandberg. By tracking user activity, the company's marketing business can serve relevant promotions and ensure that Facebook remains free for its users. And there are many more ways for Facebook's advertising business to expand even further, such as through the photo-sharing application Instagram.
After a month of turbulence and scrutiny from lawmakers, during which the company has had a contrite tone about data protection lapses, executives must reassure investors about the popularity of Facebook and the strength of its power advertising The numbers did most of the work. Quarterly sales increased to almost $ 12 billion, and the monthly growth of users also exceeded estimates. Facebook said that it now has 1.45 billion daily users, matching the estimates in this key commitment measure. Shares rose more than 5 percent in extended operations.
The results were "a relief," said Daniel Ives, an analyst at GBH Insights.
Facebook spent last month explaining, apologizing and modifying its rules after an application The developer transferred personal information of up to 87 million users to Cambridge Analytica, a political consulting firm, which may have failed to remove it. That crisis, which resulted in a campaign #deleteFacebook and a congressional investigation for Zuckerberg, hit towards the end of the quarter, so its implications have had little visible impact so far.
"Facebook continues to have a long track record of revenue ahead of that," said Mark Mahaney, analyst at RBC Capital Markets, in a note to investors. "Sellers continued to spend on the platform at record levels, and we believe that actions that lead to revenue speak louder than words."
The company's main social network added users in North America, reversing the decline that occurred for the first time in the fourth quarter. Active monthly users in the US UU And Canada increased to 241 million, while daily active users rose to 185 million in the first quarter.
Net revenues in the first quarter increased 63 percent to $ 4.99 million, or $ 1.69 per share, exceeding the $ 1.35 per share that analysts predicted. Capital expenditures reached $ 2,810 million in the quarter, while Facebook, based in Menlo Park, California, increases its spending on security, video content and new technologies. The company also said it increased its stock repurchase program by $ 9 billion.
Facebook still holds a dominant position in mobile advertising, along with Google from Alphabet Inc. That allowed the company to increase the price of the ads: Facebook said that mobile devices accounted for 91 percent of advertising revenue in the recent period, compared to 85 percent the previous year. The company also has many properties in which it is starting to make more money beyond the main social network, such as Instagram, which is expected to reach one billion users this year, and the popular chat applications WhatsApp and Messenger. .
Still, The company has been shaken internally by the data crisis, which has prompted Facebook to launch a review of all its products and evaluate how much information it should share with application developers, researchers and advertisers. Meanwhile, it is working to address new privacy rules in Europe, called the General Data Protection Regulation, which Facebook has said could reduce the number of monthly and daily users in that region.
Facebook argued that because GDPR in Europe affects the entire advertising industry, it is difficult to forecast the repercussions, even on users outside of Europe, where Facebook says it will implement the same protections.
"While we do not expect these changes to have a significant impact on advertising revenue, there is certainly potential for some impact," said CFO David Wehner.
The company can no longer be able to build products quickly and get them up and running without worrying about their possible negative impact. Zuckerberg has said that the company did not have a broad enough vision of its responsibility towards users. Facebook will have staff this year to review potentially harmful content more quickly and better understand potential security threats. And stopped when introducing some products, including a home speaker device while doing a deeper security check.
Facebook in January announced that it was modifying its news feed algorithm to emphasize the publications of friends and family, at the expense of viral news and videos. That could reduce the amount of time people spend on the site, the company said.
Wehner refused to give updated figures for that measure, saying that they were no longer as important.
"We are not really optimizing the business on time, but the kind of quality of conversations and connections," he said.