Facebook Posts $26 Billion In Revenue, Shattering Wall Street Expectations As Income Nearly Doubles

Top line

Facebook, the world’s largest social media company, posted its strongest first-quarter earnings to date on Wednesday afternoon, shaking Wall Street expectations thanks to soaring advertising revenue despite increasing competition from Google and regulatory threats.

Mark Zuckerberg, CEO of Facebook, is valued at an estimated $ 112 billion.

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Key factors

Facebook, based in Menlo Park, Calif., Posted revenue of $ 26.1 billion in the first quarter, 48% more than the $ 17.7 billion in the first quarter of last year and nearly $ 3 billion more than analysts expected.

Net income also exceeded expectations, reaching $ 9.5 billion or $ 3.30 per share – well above the average analyst forecast of $ 2.33 per share and nearly double earnings of $ 4.9 billion Dollars in the first quarter of last year.

The monthly active users of Facebook increased by around 50 million, which means that in the last month of the quarter a record 2.85 billion people used the social network.

A number of analysts this week raised their Facebook price targets in anticipation of the better-than-expected earnings report. Credit Suisse’s Stephen Ju said Monday that improving ad trends should bode well for Facebook and Instagram bottom line.

Facebook stock futures rose 7% within minutes of the announcement. The stock closed 1.2% on Wednesday and rose around 14% over the course of the year – better than the 11% rise of the tech-heavy Nasdaq.

Big number

$ 341.50. According to Bloomberg data, high analysts believe Facebook shares can rise in the next year, giving the stock an upward trend of 11% from Wednesday’s closing price of $ 307.

What to look for

Facebook’s first quarter earnings call will be on Wednesday at 5:00 p.m. EDT.

Crucial quote

“We had a strong quarter as we’ve helped people stay connected and businesses grow,” said Mark Zuckerberg, founder and CEO of Facebook billionaire. “We will continue to invest aggressively in the coming years to deliver new and meaningful experiences, including in newer areas such as augmented and virtual reality, retail and the creator economy.”

Key background

Facebook was founded in 2004 by a group of Harvard College classmates, including Zuckerberg and colleague Dustin Moskovitz. Today, Facebook is the fifth largest US company by market cap, valued at a staggering $ 862 billion. More than 95% of the company’s sales come from advertising, with about 50% of sales in the US and Canada being saturated. While Bank of America estimates its stock could rise another 20% over the next three years, the biggest risks to watch out for include declines in user activity, privacy concerns, big technology regulations, and negative impacts on the world Promotional prices.

further reading

Facebook’s share set to grow as earnings are likely to outperform market estimates? (Forbes)

Why Mark Zuckerberg Wants Influencers To Get Rich (Forbes)

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