Facebook reports 11 percent revenue growth as usage surges amid pandemic
Facebook on Thursday reported an 11 percent increase in revenue during the second quarter of 2020, even as the company weathers a deteriorating economy brought on by the coronavirus pandemic.
The company’s earning report said it netted roughly $18.7 billion in revenue between April and June, marking an 11 percent increase year-over-year.
While the revenue growth marked a slower pace than the first quarter of the year, the figure beat analysts’ expectations and sent shares of the company surging in after-hours trading.
Facebook also reported a profit of $5.2 billion in net income, a 98 percent year over year increase.
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The positive earnings came as the economy cratered, and as an advertising boycott demanding that Facebook take greater steps to combat hate speech took form.
But the last quarter also showcased a sustained surge in usage of Facebook and the apps it owns as the coronavirus outbreak caused nations around the world to implement lockdown orders.
Facebook’s daily active users were 1.8 billion on average in June, marking an increase of 12 percent year over year.
Facebook’s family of apps, which includes Instagram and WhatsApp, had an average of 3.1 billion users as of June, its highest ever.
“We’re glad to be able to provide small businesses the tools they need to grow and be successful online during these challenging times,” Facebook CEO Mark Zuckerberg said in a statement. “And we’re proud that people can rely on our services to stay connected when they can’t always be together in person.”
The earnings arrived just a day after Zuckerberg and the heads of Amazon, Apple and Google came under withering criticism from lawmakers on the House Judiciary’s antitrust subcommittee.
Zuckerberg faced repeated questioning over Facebook’s acquisitions of Instagram and WhatsApp and whether the purchases were in response to growing competition in the market.
Documents released by the panel showed that Facebook behaved in anti-competitive ways, Democrats on the panel claimed.
Facebook is also currently the subject of an ad boycott led by civil rights groups demanding the company take greater steps to moderate incendiary content on the platform. Hundreds of companies, including Starbucks, Patagonia and Coca-Cola, pulled advertising on the platform throughout July as part of the campaign.
The ad boycott campaign launched just a couple weeks before the end of the second quarter. Facebook said that its ad revenue growth in the first three weeks of July was in line with the period between April and June, noting that the campaign was one of several factors contributing to its yearly economic outlook. But the steady rate suggested the ad boycott was not making a financial dent.
Speaking on an earnings call with investors, Zuckerberg strongly pushed back on efforts to target Facebook’s advertising business, arguing it is “wrongly assumed our business is dependent on large” companies.
“The biggest part of our business is serving small businesses. That’s why I am troubled by the calls to go after internet advertising,” Zuckerberg said.
He also claimed that regulators taking aim at its targeted advertising model could ultimately harm small businesses.
“Is that really what policymakers want in the middle of a pandemic and recession?” he asked.
Facebook made roughly $70 billion in advertising revenue in 2019, which represented a 26 percent increase from the previous year. The company generates nearly all of its revenue through advertising, which has overall experienced a reduction due to the coronavirus outbreak.