Facebook Reports Slowing Growth

Facebook Inc.reported a growing base of users and increasing quarterly revenue on Wednesday, capping a year of reliable strength in its core advertising business even as expenses climbed.

The Wall Street Journal reports the social-media giant’s revenue rose 25% to $21.1 billion for the quarter, beating analyst expectations of $20.9 billion. Revenue for 2019 rose nearly 27%. Profit for the fourth quarter also narrowly topped expectations, rising 7% to $7.35 billion.

The Menlo Park, Calif., company said daily users of its core Facebook platform increased 9% from a year earlier to 1.66 billion, continuing a year and a half of outpacing expectations. Analysts polled by FactSet had expected the number of daily users to increase to nearly 1.65 billion.

The results extended strong performance that has become almost a given for the company even as its executives confront thorny social questions and mounting government scrutiny. European and American regulators launched competition-focused investigations last year as debates intensified over the company’s role in global politics and the spread of misinformation. With those matters still looming large, Facebook is now heading into the strife of the 2020 U.S. presidential election.

“It’s going to be an intense year with the election, some of our long-term technology bets are going to start coming to fruition,” Facebook Chief Executive Mark Zuckerberg said on a conference call Wednesday. “We have strong business momentum, and we have to get out there and show what we stand for.”

The company faces a number of challenges. Fourth-quarter revenue grew at the slowest pace in Facebook’s history as a listed company, according to data from FactSet. And added spending is eating into profit margins: Facebook’s operating margin was 42%, compared with 46% a year earlier, though quarter-over-quarter expenses shrunk as a share of revenue. Mr. Zuckerberg has warned previously that the company’s expenses would climb as it invests more in safety and security.

Facebook’s stock, which had been soaring, fell more than 7% in after-hours trading Wednesday. The shares had risen nearly 80% through Wednesday’s close, which was a record high since a sharp decline over the second half of 2018.