Facebook Results Beat in Q2; Flags Slower Growth Ahead

© Reuters.

By Yasin Ebrahim

Investing.com – Facebook (NASDAQ:) reported Wednesday second quarter that topped expectations, but said it expected growth to decline in the coming quarters following a strong pandemic-led bounce.

Facebook shares lost 3.38% in after-hours trade following the report.

Facebook announced earnings per share of $3.61 on revenue of $29.08 billion. Analysts polled by Investing.com anticipated EPS of $3.04 on revenue of $27.85 billion.

Advertising revenue rose 56% to $28.58 billion while other revenue jumped 36% to $497 million.

“Advertising revenue growth in the second quarter of 2021 was driven by a 47% year-over-year increase in the average price per ad and a 6% increase in the number of ads delivered,” the company said.

Daily active users (DAUs) rose 7% to 1.91 billion, while monthly active users (MAUs) rose 7% to 2.90 billion.

Looking ahead, the company said it expects year-on-year revenue growth to decline in Q3 and Q4.

“In the third and fourth quarters of 2021, we expect year-over-year total revenue growth rates to decelerate significantly on a sequential basis as we lap periods of increasingly strong growth. When viewing growth on a two-year basis to exclude the impacts from lapping the COVID-19 recovery, we expect year-over-two-year total revenue growth to decelerate modestly in the second half of 2021 compared to the second quarter growth rate,” the company said.

“We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recent iOS updates, which we expect to have a greater impact in the third quarter compared to the second quarter. This is factored into our outlook.”

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