Facebook Financials Exceed Expectations

Facebook stock rose in after-hours trading after the company posted third-quarter earnings that exceeded analysts expectations.

According to CNBC,  Facebook reported revenue growth of 29% from a year earlier, marking the third straight quarter of sub-30% expansion. Competition in the online ad market has increased, in particular with Amazon becoming a bigger player, but Facebook is finding more avenues for ad growth at Instagram and through new formats like Stories.

“We had a good quarter and our community and business continue to grow,” said Facebook CEO Mark Zuckerberg in a statement. “We are focused on making progress on major social issues and building new experiences that improve people’s lives around the world.”

Facebook said it counts more than 2.8 billion monthly users across the its family of apps, up slightly from the previous quarter. Its user base in Europe increased to 288 million from 286 million daily active users in the prior quarter. In the U.S. and Canada, users rose to 189 million from 187 million a quarter earlier.

Facebook Chief Financial Officer Dave Wehner said the company expects its fourth quarter revenue growth rate to decelerate by a mid to high single digit percentage from its third quarter rate. Analysts expect fourth quarter sales growth of 24%, according to Refinitiv, which would represent a slowdown of 5 percentage points.

Mobile ad revenue now accounts for 94% of total ad sales, up from 92% a year earlier. The company said average revenue per user increased 19% to $7.26 from $6.09 a year ago.

Zuckerberg defended Facebook’s decision to continue running political ads, even those that include false information, telling analysts that defending free expression is an important role of Facebook. Zuckerberg’s comments came after Twitter CEO Jack Dorsey announced on Wednesday that his social network would ban political ads.

“Some people accuse us of allowing the speech because they think that all we care about is making money, and that’s wrong,” Zuckerberg said. He said political adds will account for less than 0.5% of revenue next year.