Facebook closed the book on its scandal-plagued year on Wednesday, with strong fourth-quarter financial results that beat analyst expectations for earnings and revenue.
The results highlighted how divorced Facebook’s business success is from its public reputation, which suffered another blow on Wednesday when Apple punished the app maker for violating its rules with a program that paid users as young as 13 to install an app that surveilled them.
The company posted a record profit of $6.88bn for the final three months of 2018, compared with $4.27bn the year before, with revenue rising 30% to $16.64bn.
Key usage metrics – daily active users and monthly active users – both saw 9% year-over-year growth. Facebook now estimates that it has 2bn daily active users of at least one of its entire “family” of apps – Facebook, Instagram, Messenger and WhatsApp.
The positive results for revenue and user growth sent shares soaring 8% in after-hours trading.
Crucially, usage metrics grew across all geographic regions, including slight growth in Europe and North America. In July, Facebook’s stock price plummeted after the second-quarter earnings showed stagnating user growth in North America and a slight decline in Europe.
On a conference call with investors, executives Mark Zuckerberg and Sheryl Sandberg sketched a path for the company to move forward from the constant damage control mode of 2018. Both executives attempted to frame the company’s extensive problems – such as the misuse of private data, rampant misinformation, and foreign influence operations – as “social issues” endemic to the internet as a whole, and not particular to Facebook.
Zuckerberg asserted that Facebook had “fundamentally changed how we run this company” and greatly improved its systems to reduce future problems. As such, he suggested that in 2019, the company would be able to refocus on product development to “deliver more experiences that meaningfully improve people’s lives” with new innovations in messaging, payments, groups, video and hardware.
Among the product changes is a planned integration of messaging platforms for WhatsApp, Instagram and Messenger, which was first reported by the New York Times last week. Zuckerberg confirmed that the company was considering this change, which he said was still a “long-term project” and would see more of Facebook’s products using end-to-end encryption.
“Facebook might have delivered its weakest quarterly revenue growth since listing in 2012, but these numbers are actually some of the most reassuring in its short history,” said George Salmon, an equity analyst at Hargreaves Lansdown.
“The way that I feel starting 2019 is that we have clear roadmaps looking at what we need to do,” Zuckerberg said. “I do feel like we’ve started to turn a corner and have a clear plan for what we need to do now.”
