Facebook Reports 1.8 Billion Monthly Users, Beats Across The Board; Tumbles After Guiding Revenue Growth Rates Lower

Update: During the conference call, shareholders have become a little disappointed as Facebook admits revenue growth rate will decline in Q4 and 2017 will see capex grow substantially...

 

As we detailed earlier, what a difference a quarter makes: 3 months after Facebook soared when it smashed Q2 EPS and revenue, moments ago the world's biggest social network beat on the top and bottom line and the stock first dipped, then rebounded back to unchanged.

Here are the key results, all of which beat:

  • Q3 EPS of $1.09, beat est 97c (range 89c-$1.04)
  • Q3 revenue of $7.01BN, beat est of $6.92BN, up 56% Y/Y
  • Q3 Daily active users (DAUs) of 1.18 billion, higher than the est 1.16 billion and up 17% from 1.13 billion q/q
  • Q3 Monthly active users (MAUs) of 1.79 billion, higher than the est 1.76b and up 16% from 1.71 billion q/q
  • Q3 Mobile MAUs: 1.574 billion, up from 1.314 billion Y/Y
  • The ratio of DAU/MAU was 65.9%, vs 66.1% a quarter ago.

The only metric on which Facebook demonstrated some weakness was mobile ad revenue which grew at 84% in Q3, vs an estimate of 85%.

So while adjusted EPS of $1.09 was 12% above what analysts had predicted for Q3, it pales when compared with the previous three quarters, when EPS exceeded estimates by 18%, 23% and 17% respectively. Facebook's average earnings beat is 16%.

As BBG notes, one spot of worry for Facebook is the average revenue (ARPU) it makes from each user rose a bit less than the prior quarter. ARPU in the third quarter was $4.01 worldwide, up 35% year-over-year. The ARPU growth rate in the second quarter was 38%

Zuckerberg was laconic: "We had another good quarter," said Mark Zuckerberg, Facebook founder and CEO. "We're making progress putting video first across our apps and executing our 10 year technology roadmap."

Here is the quarter breakdown in charts:

DAU:

MAU:

Mobile MAUs:

 

Revenue

ARPU:

Income from operations

 

And Net Income:

 

And while the company's earnings were a comfortable beat, perhaps because the beat wasn't big enough, the stock initially dipped in the after hours, then moved back up to unchanged.