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Facebook beats Q3 earnings expectations but user growth remains tepid

01 November 2018

"Overall, given all the challenges Facebook has faced this year, this is a decent earnings report". In the first quarter, Facebook boasted 282 million users in Europe.

"Stories is a new format", she said.

Facebook stressed the breadth of its services, which include Facebook, WhatsApp, Instagram and Messenger.

With the myriad problems Facebook is facing, that passes for good news these days. Monthly active users (MAUs) were 2.27 billion as of September 30, 2018, an increase of 10 percent year-over-year.

Facebook had already warned last quarter that its revenue growth will slow down significantly for at least the rest of this year and that expenses will continue to balloon as it spends on security, hiring more content moderators around the world and on developing its products, be they messaging apps, video or virtual reality headsets.

Zuckerberg made $935 million from his regularly planned sales of Facebook stock since its peak stock day in July.

Facebook users are shifting fast to sharing more privately with messages or a "Stories" feature for creating short photo or video collections, instead of posting in their main feeds at the social network, according to Zuckerberg.

Facebook is also seeing a rapid rise in viewing videos, which also generate less ad money per minute than news feeds. Still, Facebook (and Wall Street) probably wish those figures were growing at a faster pace. "Facebook also managed to eke out a small usage gain in the USA and Canada".

The results suggest that advertisers continue to buy more Facebook ads. And they've embraced Instagram, which recently passed 1 billion users.

The earnings report comes a week before an even bigger test for the company: The U.S. midterm elections. Facebook's executives have touted their commitment to avoid the missteps of the 2016 election, when Russian Federation ran a misinformation campaign that disrupted United States politics. Facebook has been investing in safety and security, hiring thousands to monitor user complaints and investigate unusual activity, while improving its technology to take down fake accounts and pages.

Just weeks ago, Facebook activated a "war room" as a nerve centre to halt misinformation and manipulation of the largest social network by foreign actors trying to influence elections in the United States and elsewhere. The problem is harder to track on WhatsApp, which is encrypted so Facebook can't see the activity.

Facebook has been working to restore trust with users after a scandal in March over user data that an app developer shared with a political consultant - an incident that led to Zuckerberg testifying before Congress in April.

UBS maintains its position on the sidelines with a "neutral" rating on Facebook stock, referring to the social media giant as a "business in transition", as the investment firm looks to "industry/fundamental work to gain greater clarity on the topline and user/engagement transition at Facebook". That revenue growth marks the slowest growth rate in Facebook's history. Contributions of 200 words or more will be considered for publication.

Facebook beats Q3 earnings expectations but user growth remains tepid