- Facebook beat Wall Street’s expectations for the third quarter and reported its best earnings ever.
- But CEO Mark Zuckerberg warned, “We’re investing so much in security that it will impact our profitability.”
- Facebook plans to add 10,000 more employees to aid its safety and security efforts by the end of 2018.
Facebook crushed its third-quarter earnings on Wednesday and warned investors that future profitability will be impacted by increased investments in security.
The social network grew its daily active users to 1.37 billion, a 50 million user increase from the previous quarter. Revenue for the quarter topped $10 billion for the first time in the company’s history.
But Facebook also warned that its meteoric profit growth will start to slow. In a statement to investors, CEO Mark Zuckerberg said the company is “investing so much in security” that it will impact future profitability. “Protecting our community is more important than maximizing our profits,” he said.
Facebook’s top lawyer, Colin Stretch, told US lawmakers this week that the company planned to add roughly 10,000 more employees by the end of 2018 to aid its efforts in eradicating fake news, misinformation, and state-sponsored efforts to sway public opinion.
Here are the key numbers from Facebook’s Q3 results:
- Revenue: $10.33 billion vs. $9.84 billion expected, up 47% from the year-ago period.
- EPS (GAAP): $1.59 vs. $1.28 expected, up 77% from the year-ago period.
- Monthly active users: 2.07 billion, up from 2.01 billion last quarter.
- Daily active users: 1.37 billion, up from 1.32 billion last quarter.
Despite mounting criticism from US lawmakers over Russia’s use of its platform to spread propaganda, the company’s stock has been trading at all-time highs ahead of Wednesday’s results. Shares of Facebook have risen more than 5% in the last week alone on the back of strong earnings from Google, Amazon, and Microsoft.
Investors are looking for Facebook’s ability to grow its ad revenue from sources besides the News Feed, which is nearing the limit of ads it can show. Instagram ads and Facebook’s efforts to monetize videos are considered to be the company’s strongest growth bets in the near term.
This story is developing. Check back for updates.