Quarterly report: Facebook exceeds on earnings, under-delivers on engagement

Facebook meets quarterly earnings expectations, but sees a 5% drop in engagement due to its long-term user retention strategy.

Yesterday was a big ol’ day for earnings calls: Apple reported record revenue (buoyed by $1k iPhone X sales), Microsoft beat expectations thanks to the cloud, and Alibaba fell short of analysts’ expectations despite hefty growth.

Quarterly report: Facebook exceeds on earnings, under-delivers on engagement

But the most interesting news of the day came from Facebook.

The social media behemoth managed to top revenue expectations in Q4, while simultaneously reporting a 5% drop in the amount of overall time users spend on the platform (that’s 50m hours per day).

Financial game: strong

At $12.97B, Facebook’s Q4 revenue was up 47% year-over-year (they were at $8.8B in Q4 ‘16). This handily outpaced Wall Street’s $12.55B projection, and led to a 5% stock spike in after-hours trading.

This also marks the company’s 11th consecutive quarter beating revenue expectations, largely thanks to gains in mobile, which made up 89% of all ad sales.

User stats: meh

On the flip side, recent changes to Facebook’s news feed seem to have caused a dip in the amount of time users are spending on the platform — to the tune of 50m hours per day. That’s about 2 minutes per day, per user.

In an investor call, Zuck brushed this off as a short-term loss in the quest for  more “meaningful interactions” in the long term.

According to Forbes, Facebook’s year-over-year user growth, at 14%, is the “slowest rate of daily active user growth on record.” And in the US and Canada, total daily users fell by nearly 700k.

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