Facebook beat analysts’ estimates for quarterly revenue on Thursday and forecast similar growth ahead, as businesses tapped its digital ads tools despite an unprecedented boycott and the economic upheaval of the coronavirus pandemic.
Facebook shares jumped 7 per cent in extended trading after the world’s biggest social network posted revenue growth of 11 per cent, its slowest ever but still far above analysts’ expectations of 3 per cent, according to IBES data from Refinitiv.
Ad sales, which contribute nearly all of Facebook’s revenue, rose 10 per cent to $18.3 billion in the second quarter as people under lockdown spent more time online and businesses rapidly pivoted to e-commerce. Monthly active users rose to 2.7 billion, ahead of estimates of 2.6 billion.
The results were a boon for Facebook a day after its CEO, Mark Zuckerberg, took sharp jabs in a US congressional hearing. Zuckerberg was among four top tech CEOs who were grilled by lawmakers on alleged abuses of market power.
On a call with investors Thursday, Facebook executives sounded notes of defiance about both demands for aggressive regulation and the July advertising boycott, which sought to pressure Facebook to take more action against hate speech.
Zuckerberg said he was “troubled” by calls to “go after” targeted advertising online. “This would reduce opportunities for small businesses so much that it would probably be felt at a macroeconomic level. Is that really what policymakers want in the middle of a pandemic in recession?”
He also pushed back on the boycott’s aims, saying there was a gulf between “how the vast majority of people actually experience our services and the impression you get if you’re just reading much of the commentary about Facebook.”
The company appeared unscathed by the campaign, which drew the support of major advertisers including Unilever, Starbucks Corp and Coca-Cola Co.
Facebook said ad sales in the first three weeks of July grew 10 per cent year-over-year, in line with the rate for the second quarter, and projected that ad revenue growth in the third quarter would be consistent with that, likewise faster than Wall Street estimates.
About 1,100 companies joined the boycott. Although some were among Facebook’s biggest individual spenders, the bulk of Facebook’s ad revenue comes from small businesses.
Zuckerberg said observers “wrongly assume that our business is dependent on a few large advertisers.”