Facebook might be facing arguably the worst news cycle of its entire existence right now, but that didn’t stop it from raking in staggering profits. Again.
The company reported $US29 billion ($39 billion) in revenue in the third quarter, up from $US21.47 billion ($29 billion) the same quarter last year. The company also reported some pretty meaty user numbers — about 1.9 billion daily active users, and 2.9 billion folks using Facebook’s apps each month. Out of the over $US29 billion in revenue, Facebook squeezed out $US9.2 billion ($12 billion) in profit. (!!!!!)
Facebook’s stock price popped about 3 per cent in after-hours trading following its earnings announcement, Bloomberg reported.
“We made good progress this quarter and our community continues to grow,” Mark Zucerberg said in a statement ahead of the official earnings call with reporters. “I’m excited about our roadmap, especially around creators, commerce, and helping to build the metaverse.”
What Zuck’s decidedly not excited about are some of the news stories that have come out about his company over the past few days. A consortium of about 20 different news outlets were recently given access to a fresh trove of documents from Facebook whistleblower Frances Haugen detailing some of the company’s worst offences involving a failure to curb hate speech, misinformation, and much much more. Those stories began trickling out over the weekend, with a deluge of new reports arriving on Monday before earnings were announced.
Facebook also snuck in a hint about how its reports are going to be changing from next quarter on. Starting Q4 of this year, the company said, it’s going to be splitting up earnings reports into two distinct segments. The first is Facebook’s “Family of Apps” or “FoA,” which includes earnings from Facebook, Instagram, and WhatsApp. Segment number two is “Facebook Reality Labs” or “FRL,” which includes the company’s myriad hardware and virtual reality products. As part of Zuckerberg’s push into VR and the broader metaverse (whatever the hell that phrase actually means), the company announced that while it wouldn’t be ditching the Oculus title from its popular brand of VR headsets, it would be moving the product under the FRL label, a space it shares with the much less popular Portal tablets.
While the ongoing media shitstorm hasn’t yet made a dent in the company’s earnings, Apple’s ongoing privacy-centric updates to the iOS ecosystem is throwing things into disarray. “Our outlook reflects the significant uncertainty we face in the fourth quarter in light of continued headwinds from Apple’s iOS 14 changes, and macroeconomic and COVID-related factors,” Facebook said in its Q3 earnings summary.
Facebook, for its part, had seen this coming for more than a year, engaging in a full-on PR campaign against the hardware giant as soon as some of these impending changes were announced. And now that more users are opting out of app-based tracking than ever before with Apple’s help, it seems like Facebook’s worst fears have come to pass. Last month, one of the company’s chief advertising executives, Graham Mudd, told advertisers that the company was having a difficult time tracking a sizable percentage of iOS users through the Facebook ecosystem. This month, Mudd announced that the company would be completely overhauling the way it counts individual users across Facebook’s properties in order to account for some of these lost figures.
Of course, Facebook isn’t the only app feeling the brunt of Apple’s updates. When Snap missed its revenue goal by about $US3 million ($4 million) this quarter, the company told investors on an earnings call that Apple’s “do not track” toggles were to blame.
Jeremi Gorman, Snap’s chief business officer, said on the call that while the company “grappled with industry changes to the way advertising is targeted, optimised, and measured on iOS,” the best that it could, the revenue hit was “more significant” than the company expected. At the time, Snap’s grim warning about these impacts was estimated to wipe about $US142 million ($189 million) off the market value for Snap and fellow competitors, like Facebook and Google.