Facebook record breaking quarter with crushing revenue and active users

Facebook both ad revenues and subscribers came in ahead of expectations.

Revenues overall rose nearly 11%, to $18.69B; ad revenues rose 10% to $18.32B.

Operating income jumped 29% to $5.96B, with margin of 32%.

And amid a sharply lower effective tax rate (16% vs. 46%), net income nearly doubled, to $5.18B.

Daily active users were 1.79B (up 12%), topping expectations for 1.74B, and monthly active users also rose 12%, to 2.7B.

Family daily active people was 2.47B on average, up 15%. Family monthly active people was 3.14B, up 14%.

“We’re glad to be able to provide small businesses the tools they need to grow and be successful online during these challenging times,” said Mark Zuckerberg, Facebook founder and CEO. “And we’re proud that people can rely on our services to stay connected when they can’t always be together in person.”

Second Quarter 2020 Financial Highlights

Three Months Ended June 30,Year-over-Year %
In millions, except percentages and per share amounts20202019 (1)Change
Revenue:
Advertising$18,321$16,62410%
Other36626240%
Total revenue18,68716,88611%
Total costs and expenses12,72412,2604%
Income from operations$5,963$4,62629%
Operating margin32%27%
Provision for income taxes$953$2,216(57)%
Effective tax rate16%46%
Net income$5,178$2,61698%
Diluted earnings per share (EPS)$1.80$0.9198%

Second Quarter 2020 Operational and Other Financial Highlights

  • Facebook daily active users (DAUs) – DAUs were 1.79 billion on average for June 2020, an increase of 12% year-over-year.
  • Facebook monthly active users (MAUs) – MAUs were 2.70 billion as of June 30, 2020, an increase of 12% year-over-year.
  • Family daily active people (DAP) – DAP was 2.47 billion on average for June 2020, an increase of 15% year-over-year.
  • Family monthly active people (MAP) – MAP was 3.14 billion as of June 30, 2020, an increase of 14% year-over-year.
  • Capital expenditures – Capital expenditures, including principal payments on finance leases, were $3.36 billion for the second quarter of 2020.
  • Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $58.24 billion as of June 30, 2020. On July 7, 2020, we paid approximately $5.8 billion at the then–current exchange rate for our investment in Jio Platforms Limited.
  • Headcount – Headcount was 52,534 as of June 30, 2020, an increase of 32% year-over-year.

About Facebook

Founded in 2004, Facebook’s mission is to give people the power to build community and bring the world closer together. People use Facebook’s apps and technologies to connect with friends and family, find communities and grow businesses.

 The global number of Facebook users is expected to reach 4billion, in 2026.

CWEB Analysts see Facebook stock as a long and short term growth with huge rewards and potential upwards of $800 by 2021. 

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