Social media giant Facebook reported revenue of $ 26.2 billion for the quarter ended March 31, beating Wall Street analysts’ expectations on Wednesday. The tech company’s profit increased nearly 50% from the same period last year when it posted sales of nearly $ 18 billion.
The number of daily active users rose in the first quarter by 8% to 1.88 billion visitors per day and was thus just below the forecast of 1.89 billion.
“We had a strong quarter as we’ve helped people stay connected and businesses grow,” said Mark Zuckerberg, Facebook founder and CEO. “We will continue to invest aggressively in the coming years to deliver new and meaningful experiences, including in newer areas such as augmented and virtual reality, retail and the creator economy.”
The company’s revenue growth was mainly driven by paid advertising, especially from small and medium-sized businesses. The average price per ad increased by 30% compared to the previous year.
“Despite several headwinds – including ongoing antitrust scrutiny, ongoing privacy concerns, and impending changes that could negatively impact advertising – Facebook delivered another blockbuster quarter,” said Jesse Cohen, analyst at Investing.com.
One of Facebook’s main efforts is to develop tools that will allow businesses and consumers to interact more seamlessly through the platform as the pandemic drives online commerce.
“For years we’ve invested in products and tools to support this change, and these investments have helped many companies reinvent themselves during a pandemic,” said Sheryl Sandberg, chief operating officer, during Wednesday’s earnings call with Wall Street- Analysts.
Last year, the company launched Facebook Shops that allow users to create online stores. There are currently more than 1 million active stores and more than 250 million monthly store visitors, according to the company.
Facebook’s e-commerce platform is still under development and will be a “multi-year journey,” Zuckerberg said on Wednesday.
It also aims to be the go-to tool for developers of all types looking to monetize their work. “Our goal is to support the full range of human expression and to be the best platform for millions of creators to make a living,” said Zuckerberg.
The company also said changes to Apple’s iOS platform will impact second quarter earnings.
Apple’s new iPhone software iOS 14.5,and other apps from tracking their activity. The update changes the Identifier for Advertisers (IDFA), a unique random number assigned to every iPhone that helps companies personalize advertising.
Facebook had previously objected to the changes, arguing that they would take a big bite out of small business sales.
“We remain concerned about the impact it will have on small businesses to use their advertising budgets effectively,” said Chief Financial Officer Dave Wehner. “In other words, we believe the effects on our own business will be manageable.”
Wehner added that the software update is expected to remain a “headwind” for the company for the rest of the year.