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Photo: Thomas Trutschel/Photothek via Getty Images
Facebook's stock was up more than 7% in after-hours trading on Wednesday after the tech giant reported that it beat Wall Street's expectations on revenue and earnings per share. Facebook grew its ad revenue by 17% year-over-year, despite the fact that the digital ad market is experiencing unprecedented headwinds due to the coronavirus.
Why it matters: The fact that Facebook was able to beat top and bottom line revenue expectations amid the coronavirus crisis speaks to how strong the company's value proposition continues to be during the pandemic.
Yes, but: The company did issue rare guidance that the current period of uncertainty may continue to impact its business performance moving forward.
- While Facebook said it has experienced increased engagement and expects it to continue, it added that it expects the spike in usage to come back down once stay-at-home orders are lifted.
- In a statement, the company said it experienced "a significant reduction in the demand for advertising, as well as a related decline in the pricing of our ads, over the last three weeks of the first quarter of 2020."
By the numbers:
- Earnings (EPS): $1.71 vs. $1.75 per share forecast by Refinitiv
- Revenue: $17.74 billion vs. $17.41 billion forecast by Refinitiv
- Daily active users (DAUs): 1.73 billion
- Monthly active users (MAUs): 2.6 billion
- Average revenue per user (ARPU): $6.95
The big picture: Facebook was the third major internet company to post strong Q1 earnings in the past week, suggesting that the biggest internet companies will continue their dominance over the advertising ecosystem as a result of the pandemic.
- Snapchat and Google both posted revenue gains despite headwinds to the digital ad market.
Go deeper: Facebook's Q4 2019 earnings