Facebook Q2 2020 earnings beat expectations as the firm recorded significant growth in revenue, earnings per share and monthly users, among other metrics.

Following the participation of Mark Zuckerberg in the antitrust hearing held by the House Judiciary Antitrust Subcommittee, Facebook Inc (NASDAQ: FB) has released its Q2 2020 earnings which shows a revenue growth by 11% despite the harsh economic impacts of the COVID-19 situation. Being among the latest firms to release their earnings, the Facebook revenue growth has confirmed that firms are now turning profits in the Q2 better than anticipated as most countries eased their lockdowns.

Fueling the revenue growth by the social media giant is the leverage the company had in providing online environments for businesses as the pandemic rages. Mark Zuckerberg said:

“We’re glad to be able to provide small businesses the tools they need to grow and be successful online during these challenging times, and we’re proud that people can rely on our services to stay connected when they can’t always be together in person.”

The pandemic brought an increased demand in social media services as reflective in Facebook’s advertising revenue for the quarter under review. While the revenue is the lowest the company has recorded since its 2012 IPO, it definitely surpassed Wall Street analyst’s expectations. The firm’s stocks are showing a slight uptick following the released earnings as FB shares closed at $234.50 on Thursday representing a 0.52% gain. The shares are even trending more bullish in today’s pre-market as the shares have added another 6.18% to hit $249, a dollar below its 52-week high of $250.15.

Glimpse Into the Reported Facebook Q2 Earnings

The firm’s revenue shows the Q2 figures in contrast to that of Q2 2019. Revenues emanating from adverts hit $1.83 billion as against $1.66 billion reported in Q2 2019. With other revenues amounting to $366 million, FB total revenue pegged at approximately $18.7 billion. This revenue beats Refinitiv’s forecast of $17.4 billion. Earnings per Share (EPS) stood at $1.80 as against $0.91 per share in Q2 2019 as well as $1.39 per share as projected by Refinitiv

The revenue was driven by a corresponding increase in the platform’s users. Facebook’s daily active users (DAUs) increased by 12% year-on-year amounting to 1.79 billion on average for June 2020. A similar increase of 12% is recorded in the Monthly Active Users (MAUs) which hit 2.70 billion as of June 30, 2020.

“Facebook DAUs and MAUs in the second quarter of 2020 reflect increased engagement as people around the world sheltered in place and used our products to connect with the people and organizations they care about. More recently, we are seeing signs of normalization in user growth and engagement as shelter-in-place measures have eased around the world, particularly in developed markets where Facebook’s penetration is higher. Looking forward, as shelter-in-place restrictions continue to ease, we expect the number of Facebook DAUs and MAUs to be flat or slightly down in most regions in the third quarter of 2020 compared to the second quarter of 2020.” the firm said in the statement.

Capital expenditures, including principal payments on finance leases, were $3.36 billion for the second quarter of 2020 while expecting the full-year 2020 capital expenditures to be approximately $16 billion at the high end of its 14-16% forecast.

Moving Forward

While the firm will try to restrategize following the allegations of monopoly by the house committee, its many divestment strides such as its stake in Jio Platforms will help it increase its income source from the traditional advertisement option.

The world is gradually embracing a new normal guarded by a digital marketplace, the continued dominance of Facebook in this space may also help in driving more growth in the coming quarters.

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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